Trade

EU trade action on Cambodia looms after unsuccessful talks

Cambodia is moving closer to losing its preferential trade terms of trade with the European Union after the blocs foreign policy chief Federica Mogherini said on Friday that talks with Cambodian leader Hun Sen failed to assuage the EUs rights concerns.

Speaking at the close of the Asia-Europe Summit in Brussels, Mogherini said she had met with Hun Sen on Thursday evening and had raised Europes worries about the rapid deterioration of human rights in the Southeast Asian nation, including a steady erosion of the main opposition party.

“There is a lot of concern in Europe and not only in Europe about the dissolution in November last year of the main opposition party and in general terms the narrowed democratic space,” she said. “We discussed this, I cannot say that we found solutions to any of these issues but the European Union approach is always that of engaging and having a dialogue especially when problems arise.”

European Commissioner for Trade Cecilia Malmström is threatening to withdraw Cambodias duty-free trading perks, established by the Everything But Arms (EBA) program, unless Phnom Penh makes improvements on human rights. Increased tariffs on exporting to Europe would deal a big blow to key Cambodian industries such as textiles and rice. Some 40 percent of Cambodian exports head to Europe.

Mogherini also said that negotiating teams from the EU and Cambodia would launch talks in the coming days “to go through a long list of issues that we have raised together with our decision of suspending the trade preferences.”

“I am always hopeful that positive change could come,” she said.

Outside the European Council building on Friday, hundreds of Cambodians living in Belgium demonstrated on the street shouting “Hun Sen dictator” and “EU help Cambodia.”

An EU diplomat, speaking on the condition of anonymity, said some member countries had told the EU they would only support a partial stripping of Cambodias preferential access to the EU market under Everything But Arms. One idea put forward by France is to cancel tariff-free market access for sugar only.

The European Union has been under pressure from human rights groups to remove Cambodias EBA preferences for a decade, ever since the trade status helped Hun Sens long-time associate Ly Yong Phat become a sugar baron, kicking thousands of farmers off their land and then hiring their children as low-paid underage laborers on sugarcane plantations.

Last week, Cambodia released a statement calling the EUs trade threat “an extreme injustice” and accused Brussels of a “lack of transparency” in reaching its “prejudicial decision” on the countrys rights record.

The Commission is also in the process of sending an emergency mission to Myanmar to investigate human rights violations against the Rohingya Muslim minority, the results of which could also result in Myanmar losing its EBA access to the EU market.

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