Harping on the EU’s ‘unfair’ withdrawal of trade preferences will do nothing to address the serious challenges facing the country.
Mirror, mirror on the wall, who’s the fairest of them all?
First, it was the queen who was the fairest of them all. Then, it was Snow White. The result was that Snow White became the object of the queen’s hatred.
What lesson can we draw from this famous fairy-tale for Cambodia after the loss of approximately 20 percent of its tariff-free exports to the European market, which it enjoyed under the EU’s Everything But Arms (EBA) trade scheme?
Answers to the question may vary, but one lesson Cambodia post-EBA can learn is to move beyond the narrative along the lines of the EU’s “double standards.” This narrative has not helped to save the EBA status. In fact, it could be counterproductive, potentially damaging Cambodia-EU relations in the long term. Moreover, accusing the EU of holding double standards in its treatment of Cambodia is not politically viable. After all, Cambodia has already lost a portion of the benefits it enjoyed under the EBA program. The country should do something to avoid losing more.
It is therefore time for post-EBA Cambodia to move beyond the narrative that the EU is wrong, unfair or hypocritical. Cambodia itself is not doing well in terms of human rights, as evidenced by a number of arrests in recent months. Many of those arrests have been seen as arbitrary, aiming to silence critical voices.
It is high time for Cambodia to constructively engage the EU to avoid losing more benefits the bloc has to offer, particularly under the EBA trade scheme. Name-calling or dubbing the EU’s EBA withdrawal as “extreme injustice” will only prove ineffective and divisive. The EU has stated that it partially withdrew the EBA trade scheme from Cambodia due to “serious and systematic concerns related to human rights” in the Kingdom.
These concerns are linked with recent political developments in Cambodia that has brought to the fore the government’s crackdown on critics and the opposition, notably its dissolution of the only viable opposition party, the Cambodia National Rescue Party (CNRP), in November 2017. These developments in domestic politics have led the EU and other partners of Cambodia to perceive that democracy in this Southeast Asian country has gone backward. Cambodia may perceive otherwise, but as the saying goes, it takes two to tango. The EU did not begin the EBA withdrawal process for no reason. Its so-called double standards may be seen as a response to the Cambodian government’s new “standard” of democracy.
Blaming the EU for partially withdrawing the EBA from Cambodia at a time when Cambodia’s economy is facing severe challenges from the COVID-19 pandemic seems reasonable. Yet, it is important to understand that Brussels began the formal procedure to partially withdraw EBA from Phnom Penh in October 2018, about 14 months before the emergence of the coronavirus. Cambodia has had a lot of time to reverse its democratic drift, but has instead spent much of the time fighting back rather than engaging in constructive dialogue and meaningful negotiations. Unfortunately, confrontationappears to have been the name of the game both before and after the EBA was partially withdrawn.
It is worth noting that when the EBA withdrawal decision took effect on August 12, the EU noted that if the country made a “substantial improvement” in human rights and labor rights, “fully free access to the EU market for products from Cambodia” would be restored. Thus, the solution to the EBA issue seems to lie in the hands of the Cambodian government, whose actions initiated the EU’s decision to withdraw its EBA preferences in the first place. The key to solving this issue relies on the Cambodian government’s willingness, commitment and prioritization.
One can ask the following questions: Is the Cambodian government willing to compromise to regain the full EBA status? Is Cambodia willing to lose further EBA benefits to protect its independence and sovereignty – as the government claims? Is the Cambodian government committed to improving the human rights situation in the country? Is it committed to promoting democracy and the rule of law? What is the government’s main priority concerning the EBA preferences?
If the Cambodian government is unwilling to compromise with the EU to promote political and human rights in the country, further loss of the EBA status could well be the outcome. This scenario, should it happen, would be no surprise. Sweden has already decided to phase out its development aid for the Cambodian government and redirect it to assist democracy advocates, human rights defenders and civil society organizations. This decision will come into force in July 2021.
The EU may well calculate that a complete withdrawal of EBA from Cambodia would push Phnom Penh closer to Beijing. The geopolitical consequence of Cambodia’s further embrace of China appears to be far-reaching given rumors and speculations that Cambodia and China have signed a secret deal to allow the latter access to the Ream Naval Base close to Sihanoukville.
The real problem for Cambodia now is that its export-driven economy has been severely undermined by the combined effect of the COVID-19 pandemic and the EBA withdrawal. The World Bank has predicted that the Cambodian economy will this year experience its worst performance since 1994, contracting between 1 and 2.9 percent. The Asian Development Bank’s projection is worse: a contraction of 5.5 percent. The dual impactof the pandemic and the EBA withdrawal has been particularly felt in the country’s dominant garment manufacturing sector, where around 250 factories had suspended operations as of mid-2020.
Moving forward, Cambodia must focus on the diversification of its export markets, revitalization of the underdeveloped agricultural industry and improvement of services and infrastructure in the tourism sector, among many other challenges.
While a lot has been done in terms of free trade negotiations, and while the government’s focus on the long-neglected agriculture sector seems to be growing amid the COVID-19 pandemic, greater attention needs to be paid to the facilitation of new local and foreign investment. Cambodia must also prioritize education and research by aggressively investing in the education sector to increase its relevance and competitiveness in the context of the Fourth Industrial Revolution.
These are ongoing challenges that Cambodia must address in order catch up with neighboring countries, improve its regional competitiveness and achieve sustainable development. But first things first: Cambodia and its officials must finally move beyond the EU “double standard” narrative.
By : Kimkong Heng – THE DIPLOMAT