EBA Removal Won’t Affect Development Projects: EU

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The potential cancellation of the Everything-but-arms (EBA) scheme will not have an impact on development projects in Cambodia funded by the European Union, according to George Edgar, the EU Ambassador to Cambodia.

More than 700,000 Cambodians are employed in garment factories. KT/Mai Vireak

During a visit to the sites of various development projects in Svay Rieng and Prey Veng provinces last week, Mr Edgar told reporters that revoking the preferential treatment status that the EBA confers will not alter ongoing EU-funded development projects in the country.

“These are really two separate sets of issues. The things we’ve been visiting over the last couple of days relate to the EU cooperation programmes with Cambodia, which come under the specific budget subject to an agreement with the Royal Government,” he said.

“We believe what we have been doing through these programmes is supporting the long-term development of Cambodia which is something that everyone wants to see,” he said.

EU Trade Commissioner Cecilia Malmstrom informed Cambodia in an Oct 5 statement that the EU has begun the process of withdrawing its EBA status, which could take up to six months and is being done due to perceived democratic and human rights setbacks in the Kingdom.

Mr Edgar stressed that the EBA scheme deals exclusively with trade and export activities, which are conditional on the protection of human and labour rights.

“The EBA arrangement relates specifically to trade and exports from Cambodia and other countries that have the EBA arrangement with the European Union,” he said.

“The scheme is subject to conditions that relates to a number of human rights and labour rights.

“The issue that is under discussion at the moment is whether Cambodia is in line with those conditions and, if it is not, what can be done to ensure is in line with those conditions,” he said.

He added that, “At the moment, the programmes we are involved in continue and I don’t see any reasons at present why they should not continue further.”

Phay Siphan, spokesman for the government, said that the ambassador’s remarks signal that cooperation between the two sides remain strong.

“The ambassador’s statement means that cooperation continues and the mutual benefits between Cambodia and the EU are respected. The wicked politicians use the EBA as a tool to threaten us, but we know that it does not affect development cooperation,” he said.

“Even if the EU increases tariffs, they will just increase them a little because we are still a least developed economy … So I still see the cooperation between us and the EU strong, even though tariffs on our exports might increase in the future,” he said.

Mr Siphan highlighted the role of the EBA scheme in reducing poverty in Cambodia.

“We are still discussing how to extend cooperation because our economic growth is dependent on the EU’ contribution. We don’t want to see the destruction of all the mutual benefits that we have built together over the last decade,” he said.

The EBA has contributed to significant job creation and growth in the textile sector, which makes up 75 percent of Cambodian exports to the EU.

Accounting for 46 percent of garment exports, the European bloc is the top buyer of Cambodian garments, followed by the United States (24 percent), Japan (16 percent) and Canada (9 percent).

The EBA removal would incur a cost of $676 million in taxes based on last year’s export revenue, according to government figures.

Soeung Saroeun, executive director of the Cooperation Committee for Cambodia, concurred with Mr Edgar in that the cancellation of the EBA scheme would not affect development projects. He said, however, that halting the scheme will hurt farmers and garment workers.

“Basically, EBA is not supposed to affect the development projects that the EU is sponsoring because it is only about trade. However, it may affect garment workers and farmers,” he said.

This article was originally published in the Khmer Times.