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PM: Closure of factories, lay-offs not linked to EBA

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Garment workers at a factory in Phnom Penh. Hong Menea

PM: Closure of factories, lay-offs not linked to EBA

Prime Minister Hun Sen on Tuesday reiterated that any factory closure or mass lay-offs in the upcoming months would not be a consequence of losing the EU’s Everything But Arms (EBA) scheme.

Speaking during a groundbreaking ceremony for stretches of national roads 2 and 22, Hun Sen said a few factories may shut down in the next few weeks due to shortages in the supply of fabric.

The prime minister stressed that closures and lay-offs in the near future should not be linked to the EU’s decision to withdraw EBA.

“In the next few weeks, Chinese companies may be unable to export fabric to Cambodia. This means some factories here will have to close. Please don’t blame these closures on economic sanctions imposed by the European Commission.

“We don’t have fabric. This means workers are in trouble. They might be asked to stay home,” Hun Sen said.

He said it would be illogical to attribute factory closures to the EBA issue since the cancellation of the scheme becomes effective eight months after the decision is announced.

“The effects of an EBA withdrawal won’t be felt for at least eight months, so don’t panic. Some people panic when they hear the word ‘EBA’, but they don’t even know what EBA is.

“I haven’t released any statement asking the EU not to cancel the agreement. The decision is in their hands. Please, go ahead. Do it,” he said.

He vowed not to give in to pressure from the EU. “Cambodia must have peace, independence and sovereignty. The law must be applied always. Cambodia has experienced countless wars and tragedies, but we are still here.

“Citizens! I call on you to stand up to protect the independence, sovereignty and peace of your country. Don’t tolerate any interference,” Hun Sen said.

The EU will decide on the EBA issue on Wednesday. The European Commission could decide to totally or partially revoke the agreement or to leave it intact.

Hun Sen continued his speech by saying he believes the Chinese economy will recover swiftly from the coronavirus outbreak.

He said China spearheaded the recovery of the world economy after the 1997 financial crisis. Subsequent financial crises were caused by the EU and the US, but China and India managed to sustain strong economic growth, he said.

In a press release issued on Tuesday, the Garment Manufacturers Association in Cambodia said more than 60 per cent of the raw materials used in the local garment and footwear sectors come from China.

Due to the coronavirus outbreak, fabric factories there have had to close, disrupting supply to Cambodia.

“Due to the temporary closure of factories in China, some Cambodian factories may run out of raw materials by the end of March. These factories will have no choice but to suspend operations for up to two months,” it said.

Cambodian Labour Confederation president Ath Thorn said while he acknowledged that the coronavirus outbreak partly contributed to the shutdown, he said an EBA withdrawal is the main culprit. He said the government should have done more to avoid it.

"The government [should have] made amendments to improve the NGO law, addressed workers’ concerns and given them the freedom to protest. It should have encouraged political discourse to enable a fair competition," he said.

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