Cambodia’s top human rights body said Wednesday that the country does not want to lose preferential trade status in the European Union but is unable to comply with the bloc’s requirements on rights reforms to retain those privileges, citing its status as a sovereign nation.

The EU in mid-February announced plans to suspend tariff-free access to its market under the “Everything But Arms” (EBA) scheme for around one-fifth of Cambodia’s exports, citing rollbacks on human rights—a decision that would reinstate taxes on garments and footwear beginning Aug. 12, unless it is overturned by the bloc’s governments or its parliament.

The suspension, which Prime Minister Hun Sen has shrugged off and called an attack on Cambodia’s sovereignty, will result in a loss of around U.S. $1.1 billion of the country’s annual U.S. $5.8 billion in exports to the bloc, some 75 percent of which are made up of clothing and textiles.

On Wednesday, Cambodian Human Rights Committee Deputy President and Ministry of Justice spokesman Chhin Malin told RFA’s Khmer Service that Cambodia does not want to lose EBA status and that the government is “negotiating” with the bloc to ensure it maintains full EBA status.

However, he said that Cambodia cannot fully comply with EU’s requirements, especially those related to human rights and political issues.

“Cambodia will continue to cooperate with the EU Commission to resolve the EBA issue,” he said.

“Cambodia will continue to maintain its position of implementing the law and maintain its sovereignty and will not exchange them for aid.”

Chhin Malin said that “different people have different assessments” on human rights issues in Cambodia based on their political preferences, suggesting that his government would not bow to demands over how the country should be run.

He did not provide any details on negotiations or how Cambodia might expect to sway the EU on its decision to withdraw EBA status without instituting reforms.

While the coronavirus outbreak has thrown production for Cambodia’s key garment industry into disarray, factories and workers have endured a significant economic hit amid a decline in orders from buyers in the EU anticipating a return to tariffs on some Cambodian imports when trade status is withdrawn.

Government to blame

Ath Thon, president of the Cambodian Labour Confederation, told RFA that if the government of Cambodia had positively responded the EU Commission’s recommendations during an earlier assessment period, they would not be in danger of losing trade preferences on 20 percent of its exports.

He acknowledged that Cambodia had improved some issues—such as the rights of workers, the indigenous population, and land ownership—but crucial requirements, including the status of political rights, remain unchanged.

“As a union, we want the government to resolve all of the issues recommended by the EU,” he said.

Among the reforms the EU has called for is the reinstatement of the opposition Cambodia National Rescue Party (CNRP), which the Supreme Court banned in November 2017 for its role in an alleged plot to topple the government.

The move to ban the CNRP was part of a wider crackdown by Hun Sen on the political opposition, NGOs, and the independent media that paved the way for his ruling Cambodian People’s Party (CPP) to win all 125 seats in parliament in the country’s July 2018 general election.

Am Sam Ath of the Cambodia-based human rights group Licadho told RFA that there had been little improvement of human rights or political rights since the EU announced its decision in February.

He expressed concern that if the situation in Cambodia continues to deteriorate, the country will lose EBA status on all of its exports to the EU.

“The EU has [announced plans to] partially withdraw the EBA because of the CNRP dissolution and persecution,” he said.

“Currently, we have observed that arrests have resumed. I am concerned that the EU will remove full EBA status if the government does not restore democracy and respect for human rights.”

Since the beginning of the year, nearly 20 CNRP opposition officials or activists have been arrested and thrown in prison—most without arrest warrants.

During the same period, 17 former and active CNRP officials and supporters have been the victims of assault by unidentified men, and police have yet to make any arrests in the cases.

Call for postponement

Chhin Malin’s comments came after the Garment Manufacturers Association in Cambodia (GMAC) issued an open letter to the EU Commission and other European stakeholders last week calling for a one-year postponement to the EBA withdrawal, citing the economic impact of the coronavirus pandemic that has infected 126 people in Cambodia since March, according to official statistics.

GMAC said that some 250 companies making apparel, footwear, and travel goods have been forced to suspend operations because of the outbreak, while others are operating at reduced capacity, leading to layoffs for around 130,000 workers—most of whom are women.

While there was a significant drop off in orders in the first quarter of 2020, the manufacturer’s association said that it expects a decline in sales for the three industries to fall by 50 to 60 percent, year over year, in the second quarter, putting “hundreds of thousands” at risk of job loss and “millions” under the threat of a return to poverty.

Furthermore, it warned, a return of tariffs would encourage buyers to turn their business to other producers in the region that still benefit from the EBA scheme, while undermining improvements in labor rights and working conditions Cambodia has achieved in partnership with stakeholders such as the International Labour Organization.

China trade deal

Cambodia could find some relief from any burden that comes with withdrawal of EBA status if it inks a free trade agreement with China, which the Chinese Embassy in Phnom Penh said in a Tuesday statement posted on its Facebook page had reached a third round of negotiations.

“The trade deal agreement to be signed between Cambodia and China will be implemented according to a consensus of the two countries’ leaders and will promote the joint destiny of Phnom Penh and Beijing,” the statement said, without providing further details.

No date has been set for the finalization and signing of the agreement, which is expected to come “later this year.”

Cambodia’s Ministry of Commerce also issued a statement Tuesday detailing a teleconference between Minister Pan Sorasak and Yang Zhengwei, deputy director-general of the Department of International Trade and Economic Affairs under China’s commerce ministry.

“Negotiations focused on opening markets for products, services, investment, and economic cooperation, while boosting imports from Cambodia and attracting more investment,” the statement said, adding that the agreement is expected to boost trade between the two countries well beyond the average growth rate of 20 percent over the past three years.

Commerce ministry spokesman Seang Thai confirmed that no schedule has been set to sign the deal, adding that the two sides are “negotiating to reduce taxes for certain products.”

News of the negotiations came on the same day that Cambodia’s Ministry of Agriculture announced it had signed an agreement with China to export mangoes, which Hun Sen said in a statement posted to his Facebook account is “a good sign for farmers and investors concerned over reduced demand and low prices.”

Agricultural expert Yang Saing Koma told RFA that Cambodia’s government should be wary of signing any deals with China, particularly ones that he warned could negatively impact small and medium Cambodian enterprises and the agricultural sector.

“I welcome free trade, but we must be prudent,” he said, recommending that Cambodia ensure any such deal be “balanced.”

“We must also maintain local capacity to compete in the free market.”

Trade between Cambodia and China has steadily increased from U.S. $5.16 billion in 2016 to just over U.S. $6 billion in 2017 and U.S. $7.4 billion in 2018, according to government figures. The two countries aim to reach U.S. $10 billion in bilateral trade annually by 2023.

Reported by RFA’s Khmer Service. Translated by Samean Yun. Written in English by Joshua Lipes.