Cambodia's garment industry is confronted with some major challenges. The most pressing concern is a new rule that workers are entitled to seniority bonuses twice a year. Workers support the plan but fear that employers will somehow find a way to pay them less than entitlement.
Workers have questions about the size of the bonus and how much they will receive if they have worked at a factory for six or seven years. Workers, who form a massive voting bloc, were promised more protection and higher incomes during last year’s elections.
Another threat lies with the possible suspension of Cambodia from the Everything But Arms (EBA) trade scheme between the European Union and the world's least developed nations. The EBA allows Cambodia to export its products tariff-free to EU countries.
Cambodia would suffer badly if suspended from the EBA. Garment factories in the country which supply to major brands such as H&M, Adidas, Nike, C&E and Puma employ more than 7,00,000 Cambodians. The EU is by far the country's most important export market. A loss of trade preferences could mean that fashion brands turn away from Cambodian factories. Although the suspension won't start before 2020, workers already fear the impact.
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