Cambodia’s Democracy and EU Trade Privileges: Taking a Long-Term View

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Cambodia’s Democracy and EU Trade Privileges: Taking a Long-Term View

Withdrawing Cambodia’s EBA privileges might not do more harm than good.

Cambodia’s Democracy and EU Trade Privileges: Taking a Long-Term View
Credit: Russian Presidential Press and Information Service

EU-Cambodia relations continued their downward spiral following the official announcement that the European Union (EU) would begin the process of suspending the Everything but Arms (EBA) trade scheme with Cambodia, highlighting the deterioration of democracy, respect for human rights, and the rule of law in Cambodia. Despite improvements by the Cambodian government over the past few months in response to the EU’s concerns, the EU’s strong-handed approach in reprimanding Cambodia is unlikely to improve the current political situation.

The EBA trade scheme allows Cambodia to export products other than weapons to the EU duty-free and quota-free. In 2017, Cambodia exported roughly $5.8 billion worth of goods to the EU, accounting for around 40 percent of Cambodia’s exports. Over 99 percent of Cambodian exports to the EU, Cambodia’s largest export market, were eligible for EBA preferential duties, which included textiles, footwear, and agricultural products, such as rice. Since joining the trading scheme in 2001, the textile industry in Cambodia has experienced tremendous growth, and today employs around 700,000 workers.

Prior to the 2018 election, the EU expressed concerns over the deterioration of Cambodia’s democracy following the dissolution of the main opposition, the Cambodian National Rescue Party (CNRP), by the Supreme Court and the arrest of its leader Kem Sokha on charges of treason. That concern led to the EU withdrawing financial assistance for the election. Although 19 other political parties ran against the incumbent Cambodian People’s Party (CPP) in the July 2019 general election, the CPP won all 125 parliamentary seats, extending Prime Minister Hun Sen’s mandate for another term. By September, the European Parliament had adopted a 13-point resolution “recall[ing] that in accordance with EBA requirements, trade preferences should be suspended if Cambodia is in violation of its human rights obligations.”

In response to the EU’s decision, the Cambodian government blasted the move as an “extreme injustice,” highlighting that the CPP had strengthened political and civil society spaces, promoted labor rights, and addressed land issues and economic land concessions over the last eight months.

There have been improvements within Cambodia’s political landscape. Following the election, the Cambodian government established the Consultation Forum, a 30-member group that would provide advice on and draft policies as well as monitor the implementation of laws at the national and subnational levels. Moreover, more than 19 political activists have received a royal pardon and were released, including land right activist Tep Vanny, political activist Meach Sovannara, political commentator Kim Sok, and Radio Free Asia reporters Uon Chhin and Yoeung Sothearin. As for the CNRP’s Kem Sokha, he was released on bail after spending a year in prison on charges of treason.

By January 2019, an amendment made to Article 45 of the Law on Political Parties paved the way for the 118 CNRP politicians to have their political rights returned more than a year after their party was dissolved. Since the amendment, former CNRP opposition member Kong Korm has had his political rights rehabilitated in a royal decree by the King Norodom Sihamoni. Recently, in response to requests by 19 civil society organizations, a draft Law on Access to Information will be tabled to Cambodian lawmakers in an effort for the Cambodian government to become more transparent and accountable. To add to the number of political parties, founder and president Ith Sarum launched the “People Purpose Party.”

Democracy faces many challenges throughout the world. Some even argue that democracy has been in a global recession for most of the last decade. Since the promulgation of Cambodia’s constitution in 1993, which proclaims Cambodia as a liberal, multiparty democracy, the international community has aided Cambodia in defining, promoting, and monitoring its democratic norms. However, concerns over Cambodia’s democratic health raise an essential question in the efficacy of international democracy-building efforts: how can the international community continue to support Cambodia given these recent democratic setbacks?

Although the EU intends to safeguard Cambodia’s democracy with its own models, it’s crucial to allow Cambodia to develop its democratic norms and values organically – from the people and by the people. If the EBA is designed to encourage impoverished countries to adopt democratic and social reforms attuned with European standards, this is highly problematic; local context matters. Further, the move to withdraw EBA privileges jeopardizes any possible future long-term efforts by the EU to build local capacities for safeguarding Cambodia’s democracy. Will the Cambodian government want to work with the EU given the negative consequences an EBA withdrawal could have on its people?

The EU Commissioner for Trade Cecilia Malmstrom emphasized the “move is neither a final decision nor the end of the process;” but noted “the clock is officially ticking” and the EU needs to “see real action soon.” Given the improvements made by the Cambodian government thus far, it may be helpful to understand what the EU deems as “real action.” In particular, is it the overall improvement of Cambodia’s political environment, or specifically, the release of CNRP president Kem Sokha, the political clemency of self-exiled interim president Sam Rainsy, the reinstatement of the dissolved CNRP, or a new election? Although dialogue will continue between the EU and the Cambodian government, the uncertainty surrounding the EU’s expectations can lead to economic and social instability within the country given that the decision to withdraw the privileges could be decided upon in a year.

Within the next six months, Cambodia will undergo “intensive monitoring and engagement” with the EU. It is still unclear as to how this will unfold with Cambodian authorities –will there be more bilateral meetings between senior Cambodian and EU officials, or will engagement also extend to industry, civil society, and ordinary Cambodians, especially women in the garment industry, who will also be affected by the EU’s decision? An open, inclusive, and transparent engagement monitoring and engagement process will be fundamental to determining whether a withdrawal of tariff preferences will be beneficial or harmful to Cambodia’s democracy in the long term.

The question remains as to whether this is the best path forward in addressing concerns about Cambodia’s democratic health. Like many other post-colonial countries that have gone through years of civil wars, the development of Cambodia’s democratic norms takes time. The EU should acknowledge that and support Cambodia in the long-term.

Darren Touch is a Master of Public Policy and Global Affairs candidate at the University of British Columbia, and an active commentator on Southeast Asian affairs. He is a Schwarzman Scholar recipient (2019-2020).