Foreign Buyers of Cambodian Goods See Risk in Looming Trade Sanctions

Foreign importers of Cambodian textiles and footwear voiced concern in a letter this week that threatened European and U.S. sanctions over human rights violations may disrupt trade preferences supporting the country’s economy.

Writing in a May 2 letter addressed to Cambodian Prime Minister Hun Sen, the companies—including among others Nike, Gap Inc., and Levi Strauss—urged government action to address international criticisms of its rights record.

“We are concerned that the labor and human rights situation in Cambodia is posing a risk to trade preferences for Cambodia,” the letter’s signers said, pointing to what they called a “declining respect for labor standards, including freedom of association, and other issues” in the Southeast Asian country.

Many of the letter’s signatories had previously raised these concerns “through multiple channels with your government,” the letter’s signers said, noting that a letter sent on Nov. 1, 2018 containing recommendations for action had so far received no response.

“We look forward to hearing back from you and working with you to ensure a bright future for Cambodia’s workers and the Cambodian economy overall,” the letter said.

RFA was unable to reach government spokesman Phay Siphan and Ministry of Labor spokesman Hen Suor for comment on Friday, but a Cambodian trade union leader said the government should not ignore the letter’s requests.

“If buyers stop buying products from us, we won’t be able to export them,” Rong Chhun—president of the Cambodian Confederation of Unions—told RFA on May 3.

“We will lose hundreds of thousands of jobs, and Cambodia will be finished,” he said.

‘Appropriate solutions’

Also speaking to RFA, Ath Thon—president of the Coalition of Cambodian Apparel Workers’ Democratic Union—urged Cambodia’s government to seek “appropriate solutions” to resolve the buyers’ demands, saying that foreign companies concerned over Cambodia’s rights record will not stop now until their demands are met.

In February, the European Union (EU) announced the launch of a six-month monitoring period to determine whether Cambodian exports should continue to enjoy tax-free entry into the European market under the Everything But Arms (EBA) scheme.

The EU trade measure and a similar measure proposed by the U.S. Congress were motivated by the September 2017 arrest of opposition Cambodia National Rescue Party (CNRP) president Kem Sokha, as well as by a wider crackdown on media and civil society.

Kem Sokha’s arrest, and a decision by the Supreme Court to dissolve the CNRP two months later, paved the way for Prime Minister Hun Sen’s ruling Cambodia People’s Party (CPP) to win all 125 seats in parliament in a July 2018 general election that was widely seen as unfree and unfair.

Criticism, risks ignored

Hun Sen has ignored international criticism of his rights record and shrugged off the risks of losing markets in Europe or North America.

He came back from a summit in Beijing last week touting Chinese Premier Li Keqiang’s indication of a  “clear willingness to help” Cambodia in part through additional investment in the country.

Hun Sen also noted that ruling Chinese Communist Party senior official Wang Huning had assured him during a meeting on Saturday that China had conducted studies on the impact of an EBA suspension, but determined “it will not cause any serious impact,” and that Beijing “will find other measures by which to help Cambodia.”

Both the World Bank and the Asian Development Bank, however, said in recent reports that suspension of the EBA was a key external risk that could negatively impact Cambodia’s economic prospects this year and slow export growth.


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