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‘Dire consequences’ from sanctions, warns AmCham

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Workers works in the garment factory. Pha Lina

‘Dire consequences’ from sanctions, warns AmCham

American businesspeople in Cambodia have warned that any sanction against the Kingdom would have “dire consequences” that could push Cambodia even further into the arms of China.

In a letter to US senators and representatives dated Monday, the American Chamber of Commerce Cambodia (AmCham) said any sanction that hits the Kingdom’s garment industry “would harm most of those at the bottom of the socioeconomic pyramid”.

It urged that any sanction targeting specific individuals “must be well informed and carefully considered”.

Government spokesman Phay Siphan on Tuesday called AmCham’s letter “respectful” and knowledgeable of the real situation in Cambodia.

The US House of Representatives passed the “Cambodia Democracy Act of 2018” on July 25 – legislation that could pave the way for sanctions against the Kingdom.

Adding further concerns for Cambodia’s crucial garment industry, the European Parliament last week passed a 13-point resolution on Cambodia, which includes a call for the treason charges against former Cambodia National Rescue Party (CNRP) leader Kem Sokha to be dropped.

The resolution also carries an implicit threat that the EU could withdraw Cambodia from its Everything But Arms (EBA) trade deals, which allow tariff-free imports into the 28-nation bloc.

“In recent years, Cambodia has seen significantly increased levels of investment from China, which is now the largest investor in the Kingdom.

“While the investments benefit some Cambodians, it has been observed that many of the skilled labour and management jobs within these organisations are held primarily by Chinese workers.

“This, coupled with a perception that the corporate culture within these organisations is difficult to tolerate, means that the average Cambodian would choose to work in an American business,” the letter reads.

“As a community, this leaves America, Americans and American businesses in a strong position, provided we continue to engage.

“Withdrawing would solidify Chinese influence at a time when they are working to secure long-term sovereign support in the region. We simply cannot afford to lose our voice in Cambodia and business is precisely one of the areas where we have had and can continue to have a sustainable impact,” it continues.

“Any broad sweeping sanctions or actions targeting individuals [and] executed without adequate consultation, will have dire consequences for the relationship between our people and American businesses.

“It is precisely in this time when Cambodia struggles to find her

way in a complex regional context when American businesses can lead by example, through engagement, not punishment.’

Commenting further on the AmCham letter, Siphan said: “Since the beginning, US politicians always take their information or reports from opposition groups, but now US people, who are taxpayers, have expressed their opinion, revealing they are not happy and concerned about action that could cause negative impacts on Americans who do business in Cambodia and who clearly understand the situation in Cambodia. This is a respectful move.”

He pointed out that Cambodia did not only depend on the US market but also traded with other nations. “The US congressmen should reconsider their foreign policy, which has always been a failure regarding Cambodia.

“Cambodia is not a lone nation. We are full members of many international organisation, such as the World Trade Organisation, and we have trade connections with other nations. We trade multilaterally and bilaterally,” he said.

Political analyst Hang Vitou, agreed that any US sanction would push Cambodia even closer to China.

“I think if the US places sanctions, this would have a serious negative impact. China would move closer to Cambodia [and Sino-Cambodian ties would become] stronger and stronger.

“The US must consider such action clearly as It would impact both countries. It would have negative consequences for Cambodia while US influence in the Kingdom would weaken dramatically,” he said.

The Cambodia Democracy Act of 2018 allows for the imposition of sanctions against Prime Minister Hun Sen and senior Cambodian People’s Party members for allegedly “undermining democracy”.

This was after former opposition leader Kem Sokha was charged with treason and his party (CNRP) was dissolved by the Supreme Court last year.

The bill was submitted to the House in May by six US Representatives – Ted S Yoho, Alan Lowenthal, Edward Randall Royce, Eliot Lance Engel, Bradley James Sherman and Steve Chabot.

After the legislation was passed, Royce suggested Washington start by targeting Hun Sen, Minister of Interior Sar Kheng, Minister of Defence Tea Banh and Minister for Economy Aun Pornmoniroth.

Others targeted were the Secretary of State of the Ministry of Justice Koeut Rith, Minister of Public Works Sun Chanthol, and Minister of Foreign Affairs Prak Sokhonn, and the president of the Anti-Corruption Unit Om Yentieng.

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