Cambodia and the EU on November 16 pledged to enhance trade and investment in an effort to spur post-Covid-19 economic recovery in light of the bloc’s recent partial withdrawal of trade privileges.
The vow was made at a meeting held via video link between Cambodian Ministry of Commerce secretary of state Sok Sopheak and Petros Sourmelis, the Head of Trade and Economic Section chez EU Delegation to Thailand.
The meeting focused on preparations for the Sub-Committee Meeting on Trade and Investment that is scheduled for November 27, also via video link, as part of the 11th Meeting of the Cambodia-EU Joint Committee.
Sopheak said the two sides exchanged views on measures to pull the Cambodian economy out of the Covid-19 rut, a number of proposed amendments to the Kingdom’s laws concerning trade and investment, as well as its status on bilateral and multilateral free trade agreement negotiations.
Also discussed were the implications of the EU-Vietnam Free Trade Agreement (EVFTA) on Cambodia, developments on the World Trade Organisation’s agenda and other issues to be further addressed at the sub-committee meeting, he said.
He added that his side brought up the issue of declining orders from the EU and dwindling domestic consumption in the bloc due to Covid-19 lockdown restrictions.
On August 12, the European Commission (EC) officially withdrew 20 per cent of the Everything But Arms (EBA) scheme from Cambodia. The suspension affects one-fifth or €1 billion ($1.19 billion) of the Kingdom’s annual exports to the EU’s 27-nation bloc.
And the EVFTA entered into force on August 1, which “will ultimately scrap duties on 99 per cent of all goods traded between the two sides”, according to the EC.
But Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika has called out the EVFTA as a blatant display of the EU’s bias against the Kingdom.
He previously told The Post: “Why did the EU, inconsistent with its claimed core value, decide to provide trade benefits to Vietnam, while considering possible action to punish the Cambodian people, especially the vulnerable poor female workers in the garment, footwear and travel goods sectors?
“We may have the right to ask this question or we may not, but it’s quite clear that for the EU, economic and political interests are more important than anything else.”
“As a victim of a long cold war, internal civil war and genocide, Cambodia’s main priority is peace, political stability and economic development, while trying to uphold democratic and human rights principles.
“A lot of Cambodians have been lifted out of poverty with the right to economic opportunities, jobs, stable incomes, social security benefits, education, women empowerment, et cetera.
“The country is on the right track to become an upper-middle income country by 2030 and achieve high-income status by 2050, provided political stability is maintained and bureaucratic reform is constant,” he said.
Accounting for 45 per cent of Cambodian exports, the EU was the Kingdom’s largest trading partner in 2018, the EC said.
Exports to the EU single market came to €4.9 billion in 2018, nearly double the €2.5 billion logged in 2013, it said.
Most of the exports (95.7 per cent) entered the EU market under EBA tariff preferences, it added. Overall, Cambodia was the second largest user of EBA preferences, behind Bangladesh.