Following a report by the EU that did not specifically mention or condemned the political situation in Cambodia, local garment manufacturers say the country is no longer at risk of losing its preferential treatment status with the EU. Some believe the recent report provides sufficient evidence that the EU will not cancel its Everything-but-arms (EBA) with Cambodia, correspondingly, the Garment Manufacturers Association in Cambodia (GMAC) is urging investors to increase their stakes in the local garment and footwear industry.
The European Commission submitted a report to the European Parliament and the European Council on the generalised scheme of preferences for 2016-2017. The report made no mention of a possible withdrawal from the EBA with Cambodia over the dissolution of the main political opposition party, the Cambodian National Rescue Party (CNRP), in November last year.
The reported said, “The EU is engaging with Cambodia to address human rights issues related to land disputes arising from sugarcane concessions and labour rights issues, in particular freedom of association. The EU needs to see real and sustained improvements, if further steps are to be avoided.” It urged the government to “establish an independent and transparent mechanism in order to deal with claims for compensation.” Kaing Monika, deputy secretary general for GMAC, is happy with the EU report, “Reading the report’s section on Cambodia, we feel very relieved,” he said. “It doesn’t mention the political situation or a possible cancellation of the EBA.” Monika says this was important because the EBA contributes significantly to Cambodia’s competitiveness in the international arena. Based on the report, we continue to call on investors to remain confident in our garment industry,” he said.
Som Aun, President, National Union Alliance Chambers of Cambodia, shared the same view, “The report was very positive for our garment and footwear industry. The EU did not mention anything about a withdrawal from EBA. This should help keep investors’ confident in our industry.” Under the EBA initiative, all Cambodian products – except arms and ammunition – are allowed duty-free and quota-free into the EU market. In 2014, the EU became the largest purchaser of Cambodian garments, surpassing the US. The EU absorbs roughly 50 per cent of all Cambodian garment exports, notes GMAC.