EBA Suspension, A ‘Disastrous Wake-Up Call’ For Cambodia

The government of Cambodia and the international community have reacted strongly towards the European Union’s warning on Monday that they are now beginning the process of suspending Cambodia’s EBA privileges, according to an Al-Jazeera report.

The EBA trade agreement, short for “Everything But Arms”, is an arrangement that the E.U. has with multiple countries to confer lower tariff rates on that country’s exports to the E.U. The agreement contains stipulations on human rights, as well as democratic thresholds of which the participatory nation must meet, in order to maintain these trade privileges. E.U. officials and international observers point to the Cambodian government’s 2017 dissolution of the main opposition party, the CNRP, as a failure to meet the agreement’s standards. While the E.U. has stated that it has not yet revoked Cambodia’s trade privileges, they emphasized that the 18-month process of suspending the nation’s access to the EBA has begun and is to continue, unless the government’s democratic record improves.

The E.U.’s announcement of EBA suspension is part of a trend of Europe attempting to curtail the ruling CPP’s assault on the country’s democratic system. In early October, 2018, the E.U. had warned that Cambodia risked losing its privileged exporter status if it did not make “clear and demonstrable improvements” to its record on democracy and human rights.

Cambodian politics exist in the shadow of the genocidal Khmer Rouge regime which had been in power from 1975 to 1979, along with the ensuing Cambodian-Vietnamese war, and the CPP government derives much of its legitimacy from the economic development and peace that it has fostered in the decades since. Though the recent crackdown on the CNRP by independent media and human rights advocates was a particularly severe transgression of democratic norms, it is unfortunately in line with the CPP’s record over the past few decades. Prime Minister Hun Sen has been in power since 1985, under whom Human Rights Watch reports that judicial independence and political freedom are severely restricted and political opponents are repressed through “violence [and] politically motivated prosecutions.”

Cambodian officials have reportedly attempted to downplay the impact of an EBA suspension on the export-oriented Cambodian economy, but many observers warn that it would have a devastating effect, as Europe is Cambodia’s largest export market at $5.8 billion in exported goods in 2017.

The Cambodian government’s ruling party, the CPP, has sought to accuse the E.U. of interfering in its sovereignty. Al-Jazeera reported that Phay Siphan, a government spokesman, commented that the country was being treated “unfairly.” Prime Minister Hun Sen, likewise criticized the E.U. last month, declaring, “If you want the opposition dead, just cut [EBA],” a statement which many interpreted as a threat to kill the opposition leaders if Cambodian EBA privileges are revoked.

Sophal Ear, an Occidental College professor and an expert on the issue, explained that the loss of EBA privileges would be “… utterly catastrophic, but maybe that’s exactly what Phnom Penh needs: a wake-up call,” citing the Prime Minister’s threat as evidence of the government’s attacks on the democratic system. VOA Cambodia also reported that Cambodian union leaders have responded, calling on the government to take the potential economic impact that EBA loss would have on Cambodian workers seriously.

There have been a wide range of reactions to this announcement from the E.U. One protest, as explained by David Hull in The Diplomat, has come from the CPP, which accused the E.U. of overstepping and interfering in Cambodian sovereignty. This argument may be exaggerated, as all trade deals have terms with policy implications, and the reduced tariff barriers that Cambodia receives under the EBA are compensated for by E.U. taxpayers. Therefore, the E.U. reserves the right to set the terms under which it allows Cambodia this privileged economic status. Human rights and democratic standards, theoretically, is a net positive, keeping Cambodian civil society free, with an economy boosted by preferential export status in Europe.

However, the suspension of EBA, like many economic sanctions, would hit the most economically vulnerable Cambodians the hardest, and, thus, European and Cambodian officials should do all they can to avoid the suspension being imposed. The Cambodian government’s ordered disbanding of the opposition party, the CNRP, as well as the imprisonment of its leader, are a detriment to the rights of the Cambodian people to political freedom and participation, and it is laudable that the E.U. is attempting to curtail this degradation of democracy. Nevertheless, the destabilization and economic hardship that would be brought upon Cambodian workers by an EBA suspension may likely be an unproductive strategy that will do little to promote democracy, instead degrading the economic security of Cambodian workers.

The human rights abuses and political restrictions in Cambodia should not be unacceptable, and the E.U. seems justified in exerting pressure on the Cambodian government to push it to meet the human rights and democratic standards of the EBA trade deal. However, it is imperative that E.U. and Cambodian officials work to address these issues — particularly the elimination of the opposition party in the 18 months remaining before Cambodia’s EBA status is officially suspended. The potentially devastating economic impact on Cambodian workers of the loss of EBA status will hopefully motivate Cambodian lawmakers to take this threat seriously and encourage E.U. officials to find an alternative route to the ending of Cambodia’s export privileges.