Cambodia’s PM Hun Sen Unveils ‘Strategy’ to Offset Loss of EU Trade Scheme

cambodia-workers-lunch-break-feb-2019.jpg Cambodian workers sit down for lunch during break time in front of a factory in Phnom Penh, Feb. 12, 2019.

Cambodia’s Prime Minister Hun Sen on Friday unveiled his strategy to offset the loss of a preferential trade agreement that the European Union is likely to withdraw in response to his government’s failure to reverse rollbacks on democracy, saying he is “done taking orders” from other countries.

Speaking during a three-hour forum hosted in the capital Phnom Penh, Hun Sen told civil servants, members of the private sector, and other stakeholders—including diplomats and the EU ambassador to Cambodia, George Edgar—that his government “won’t bow down” to anyone in return for aid or other handouts, and “has had enough” of other nations trying to dictate Cambodia’s internal affairs.

Hun Sen listed several reforms that he said followed the late King Norodom Sihanouk’s policy of independence and sovereign integrity, including reducing “unofficial payments” in his government, decreasing transportation fees, and cutting the number of national holidays from 30 to 23 days.

He also called for a reduction in “certain fees” for using Cambodia’s two major ports, and said that the public will now only be able to take one day off of work for King Norodom Sihamoni’s birthday, instead of the traditional three.

“We will generate revenue of up to U.S. $400 million [following these reforms], so if the EU wants us to pay taxes, we will pay the taxes—don’t worry,” he said.

The EU decided in February to launch 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 one proposed by the U.S. Congress, was motivated by the September 2017 arrest of opposition Cambodia National Rescue Party (CNRP) president Kem Sokha, as well as 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 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.

Hun Sen said Friday that Cambodia is “fed up” with demands from foreigners about how to run the country.

“Cambodia is done taking orders—foreigners tell us to do things and if we decline, they threaten to impose taxes,” he said.

“Cambodia can no longer endure this suffering and continue to bow down. Cambodia will continue to do business—they will pay us taxes and we will pay them taxes.”

He also directed the Ministry of Commerce to lodge a complaint with the World Trade Organization (WTO) against the EU, citing “unjust trade practices” for imposing a tax on Cambodian rice for three years beginning in January, after an EU investigation found that “a significant increase” in imports of the grain from the Southeast Asian nation had “caused economic damage” to European producers.

Fewer holidays

The prime minister praised workers and government employees for “understanding” the need to reduce the number of national holidays in Cambodia.

“Workers get too many holidays and it affects economic growth,” he said, without providing details.

Hun Sen had announced his decision to reduce national holidays earlier this week as a reform aimed at improving the economy, saying at the time that it had nothing to do with whether the EU ends the country’s benefits under the EBA scheme.

His announcement immediately drew concerns from those who warned the move would negatively impact the income, health and morale of the country’s workers.

Others complained that the government was acting on behalf of the interests of factory owners, rather than the country’s labor force, and said companies are already making a significant profit in Cambodia, regardless of the number of holidays in the country.

On Friday, analyst Ly Sreysros told RFA’s Khmer Service that Cambodia’s government doesn’t care about the EBA scheme because officials aren’t the ones who will be impacted by an end to the preferential trade agreement with the EU, which ranked in 2017 as Cambodia’s second-largest trade partner, importing goods worth 5 billion euros (U.S. $5.8 billion) from the country.

She stressed that average Cambodians will be the ones who bear the brunt of losing the EBA, and urged Hun Sen to delink the EU’s demands to issues of sovereignty.

“The EU is requesting the government restore democracy and respect human rights,” she said.

“I think such a request is fair and doesn’t affect our national integrity.”

Reported by RFA’s Khmer Service. Translated by Samean Yun. Written in English by Joshua Lipes.


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