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AVI COMMENTARY ISSUE: 2020, No. 29

Is the EU Losing Credibility through Its Double-Standard Trade Policy in Southeast Asia?

ISSUE 2020
No 29
Release 07 September 2020
By CHEUNBORAN Chanborey, PhD*

Over the last two decades, the partnership between Cambodia and the European Union (EU) has significantly contributed to the Kingdomโ€™s socio-economic development and her integration into the international community through foreign direct investment, strong people- to-people ties, the promotion of democracy and human rights, and above all trade relations.

The preferetial trade arrangement that the EU has extended to Cambodia under the โ€˜Everything but Armsโ€™ (EBA) scheme since 2001 has been vital to the enhancement of the well-being of the Cambodian people and to poverty reduction in the country, which droped markedly from 53.2% in 1994 to 13.5% in 2014 and just below 10% in 2018.

However, the EUโ€™s resolution to partiallly withdraw the EBA from Cambodia on 12th August 2020 has negatively affected the Kingdomโ€™s export-driven economy, which has already been hitting hard by COVID-19. In this context, there have been mixed reactions to the decision. To a small segment of Cambodian people, especially the opposition and human rights groups, the EUโ€™s move is just and necessary to restore democracy, human rights and freedoms in Cambodia.

However, to the majority of Cambodian people, especially those within the foreign policy community, the decision is immoral, unjust and hypocritical. It is immoral because Cambodiaโ€™s economy has already been badly devastated by COVID-19. In other words, the move is considered โ€˜one, two punchesโ€™ against Cambodia. According to the World Bank, Cambodia will register its slowest growth since 1994 โ€“ contracting between 1% and 2.9% this year. And based on Cambodia Microfinance Association (CMA)โ€™s estimation, over 137,000 people have requested for loan relief due to the impacts from the COVID-19 pandemic. More sadly, the EUโ€™s decision will primarily affect the garment sector that employs 800,000 workers, 81% of whom are women who support 2 million more people mostly in the countryside. As of May 2020, 256 factories had been closed due to the disruptions of the global supply chains. As a result, more than 130,000 workers suddenly became unemployed and were likely to fall back into poverty.

It is unjust for the Cambodian policymakers who believe that the EU has turned a blind eye to the Cambodian governmentโ€™s commitments to fulfilling the 15 conventions under the frameworks of the United Nations and the Interantioal Labour Organisation and to meeting the EUโ€™s demands for the expansion of political and civil society space, the promtion of labour rights, and the addressing of land issues. By and large, democratistion is not a linear process in which one may see two-step forward, one-step backward, and sometimes one-step sideway. Cambodiaโ€™s democratic development is no exception. To have an objective judgment, any assessment of the democratisation and political process in Cambodia must be made both in absolute and relative terms.

In absolute terms, one needs to observe in a resonable long period of time. Cambodia is undoubtedly in a much better shape compared with the situation 10 or 20 years ago vis-ร -vis her political and freedom space. Interestingly, the space has been expanded by digital platforms, especially Facebook. Cambodian leaders, including Prime Minister Hun Sen, are active subscribers to such platfoms, which have allowed Cambodia people to directly channel their concerns and needs to their leaders. In relative terms, Cambodia has, againts all odds, scored relatively high compared with other countries in Southeast Asia when it comes to the promotion of democracy and the protection of human rights.

Therefore, the EUโ€™s EBA punishment of Cambodia in the name of human rights and democracy is hypocritical and vividly unveiled the EUโ€™s double standards. While many countries receiving the EUโ€™s trade preferential treatment have not fully complied with the conditions it imposed, the EU demands for the perfect implementation of the same conditions from Cambodia. The EUโ€™s using of democracy issues to justify its partial withdrawal of the EBA from Cambodia while it continues to provide similar preferential trade treatments to other countries with relatively much poorer human right record is neither fair nor consistent. As a matter of anology, a good student in a Democracy Class is punished while the bad ones are rewarded.

It becomes increasingly clear that the Cambodian government has decided to let go the partial EBA withdrawal, as an old saying goes, โ€œThere is no use crying over spilled milk.โ€ To have a productive relationship, Cambodia and the EU should move on to embrace and promote their shared global agenda, including the enhancement of multilateralism; rules-based international order; women empowerment and women in peace and security agenda; climate change and green growth; and sustainable development.

In the face of the unprecedented challenges caused by COVID-19 resulting in public health and socio-economic fallout, the international community urgently need more cooperation and mutual support. In this respect, the EUโ€™s pledge to provide โ‚ฌ443 million in financial aid to support the economic recovery and job creation in Cambodia is an encouraging development. Having said that, trade remains indispensable for Cambodiaโ€™s development and poverty reduction. Therefore, Cambodia and the EU should think beyond the EBA towards a possibility of forming a Cambodia-EU Comprehensive Economic Partnership.

The views expressed are the authorโ€™s own and do not reflect the views of the Asian Vision Institute.