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Adidas raises EBA concerns

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An EU delegation holds a meeting with Interior Minister Sar Kheng last week. Hong Menea

Adidas raises EBA concerns

Sportswear giant Adidas has said that the EU should balance the human rights provisions in its trade policies and the impacts of the possible withdrawal of its Everything But Arms (EBA) scheme.

The Adidas call came as the European Commission, after the two-day visit to Cambodia of an EU delegation, said it hoped to see “sustained and concrete progress” regarding the areas of concern.

A report The Post received on Friday said that while Adidas agreed with the EU’s aims of addressing perceived concerns regarding human rights and civil rights violations in Cambodia, it asked that any decision to suspend the agreement “should thoroughly consider the economic, social and human rights impacts of such a withdrawal”.

Adidas said it was one of the largest buyers of apparel and footwear from Cambodia, with 24 per cent of its products manufactured in the Kingdom. Its suppliers employed more than 70,000 workers, of whom 90 per cent were women.

It said it welcomed the process to review the situation on grounds and the engagement with authorities and stakeholders to improve the human and civil rights situation.

“In case of a decision to suspend trade benefits, the European Commission should consider targeting specific sectors that are closely linked to the human and civil rights abuses. The garment and footwear sectors, with their significant footprint, should be excluded,” it said.

Adidas said the EU was faced with a difficult choice between upholding human rights norms and conventions, and balancing this against the economic incentives offered by such a scheme, which supported job creation and poverty alleviation in the Kingdom.

It said any proposed withdrawal of EBA benefits could put at risk Cambodia’s “pro-poor growth model” – the stimulating of economic growth for the benefit of the poor – curbing efforts to alleviate poverty and, in doing so, constrain the fulfilment of human rights for one of the most vulnerable sectors of society.

Should EBA be finally removed, the tariff application would be 12 per cent for apparel and eight per cent (leather uppers) to 17 per cent (synthetic uppers) for footwear, it said.

“This cannot be absorbed by Adidas and its retailers … it automatically leads to a reallocation of further investments in sourcing,” it warned.

Adidas said a withdrawal of the EBA benefits would put Cambodia at a significant competitive disadvantage to other least-developed and developing countries who continued to enjoy them.

It said while the new minimum wage in Cambodia exceeds that of other developing countries such as Vietnam, Cambodia was already losing its competitive advantage over other nations.

The European Commission officially launched the 12-month EBA withdrawal process last month. Last week, an EU delegation paid a visit to Cambodia as part of the review and monitoring process which calls for continued dialogue and engagement with the government.

The delegation issued a statement on Friday saying its visit was the first opportunity for dialogue during the monitoring and evaluation period.

“The European Commission and the EEAS [EU’s diplomatic European External Action Service] hope to see sustained and concrete progress in all areas of concern under EBA engagement, and look to Cambodia to urgently take the action needed in order to keep benefiting from EBA,” it said.

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