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Cambodia: Garment Manufacturers Association warns of consequences of EU’s EBA decision

By Simone Preuss

18 Feb 2020

Business

The EU Commission decided on Wednesday to partially withdraw Cambodia's preferential access to the European market under the "Everything but Arms" (EBA) programme because of continued and serious human rights violations. This means that instead of preferential tariffs, the usual EU tariffs on certain clothing and footwear will apply from 12th August 2020 - an increase of 12 and 16 percent, respectively. The Cambodian Garment Manufacturers Association (GMAC) is “dissatisfied” with the EU's decision, as it could potentially jeopardise the jobs of 90,000 garment workers, most of them women.

Since the trade margins for garments are already stretched to the limit, especially in the international market, only a few international clients will be prepared to continue without the trade agreement and to absorb an increase in costs of 12 or 16 percent. The GMAC represents the interests of the clothing and travel industries, which account for 75 percent of Cambodia's total exports of trade goods and about 90 percent of exports to the EU, and therefore sees the industry’s future in a bleak light.

Cambodia’s garment sector employs more than 750,000 people

The sector currently employs more than 750,000 people, the majority of them women, whom the EBA programme has helped out of poverty. By working in the garment industry, they contribute to their household income and offer their children a better future. If they lose their jobs, it will be difficult to find an adequate new one in Cambodia. The GMAC therefore calls on the EU to reconsider its decision.

“We urge the European Commission and members of the European Parliament to reconsider their decision by taking into account the values and goals that the program was based on when it was put in place nearly 20 years ago: development assistance, poverty reduction and the dignity of employment. The EBA programme has been a clear success in Cambodia in meeting these objectives. The partial withdrawal announced on February 12th will lead to nothing more than job losses and affect the workers livelihoods, especially women,” states the GMAC in a press release on Tuesday.

It also points to the fact that the association, as part of the reciprocal commitment to the EBA programme, established “a culture of transparency and accountability in labour compliance and working conditions”. Thus, the GMAC was the first association in the world to welcome a UN monitoring programme by the International Labour Organization (ILO) to inspect factories for compliance with national and international labour requirements, later known as the “Cambodia model”. “No sector in any other country that benefits from preferential access to the EU market has a better record of cooperation with the ILO,” emphasises the GMAC.

GMAC urges EU to restore full EBA benefits

In addition, the GMAC has also supported the effective operation of Cambodia's Arbitration Council as well as other innovations in industrial relations which have supported the development of a strong trade union movement in our sectors. “The GMAC respects and supports the EU's engagement to improve its human rights policies. Unfortunately, summarily pulling the rug from under the feet of hundreds of thousands of Cambodians is not the way to proceed,” it adds.

The association therefore demands quick action by the EU to restore full EBA benefits for the sake of “sustainable development and for the hundreds of thousands of Cambodians who have risen from poverty to gain employment, advance their rights and support their families.”

Otherwise, the GMAC expects the EU's decision to cause “confusion” with respect to Cambodia’s trade status and the loss of tens of thousands of jobs when buyers decide to source from countries with lower tariffs and far weaker legacies of trade union rights. “The decision will increase poverty in our country and make it more difficult to improve wages and benefits for other workers,” warns the association.

Photo: Think-Tank Mekong Future Initiative (MFI)

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