Logo of Phnom Penh Post newspaper Phnom Penh Post - Exporters seek delay of EBA withdrawal

Exporters seek delay of EBA withdrawal

Content image - Phnom Penh Post
Revoking the EBA scheme will dramtically impact the nation’s garment industry and cost Cambodia around $1.1 billion. Photo supplied

Exporters seek delay of EBA withdrawal

The Garment Manufacturers Association in Cambodia (GMAC) is coordinating with the European Branded Clothing Alliance (EBCA) to request a postponement of the EU’s partial withdrawal of its Everything But Arms (EBA) scheme in light of the Covid-19 pandemic.

In a letter to European Commission president Ursula von der Leyen on March 30, the EBCA said the coronavirus outbreak has disrupted production and demand as government-imposed lockdowns paralyse global trade and economies.

It said the pandemic has posed unprecedented challenges in a world where goods, services and capitals are traded through global value chains which contribute to development, job creation and economic growth as a whole in and outside the EU.

“The disruption caused by Covid-19 risks many jobs in and outside the EU. In the EU, sales in our sector has already dropped by approximately 90 per cent and about 90 per cent of employees are currently supported financially by their employers in addition to state support, in order not to lose their jobs. Such a sharp decline in sales has an inevitable impact on orders.

“To enhance certainty and allow us to keep on supporting our employees in the EU, as well as the workers in the manufacturing countries, we would like to ask the EU and EU member states to support our industry, also in the long-term since the road to recovery will be lengthy.

“We ask the EU to temporarily reduce VAT and customs duty rates on imports in the EU on clothing and apparel, in order to provide relief along the entire supply chain, including in the manufacturing countries,” it said, adding that the EU should introduce automatic 90-day deferral of duty payment across its member states.

It also asked the EU to postpone the partial withdrawal of Cambodia’s EBA status in light of the “exceptional circumstances and already severely impacted global industry”.

On February 12, the European Commission partially withdrew the EBA scheme from the Kingdom, citing a serious and systematic violation of principles in the four core human and labour rights.

The withdrawal would affect about one-fifth of Cambodia’s exports including garments, footwear and travel goods. The move is expected to cost the Kingdom around $1.1 billion in revenue.

The withdrawal will take effect on August 12, unless objected by the EU Parliament.

GMAC secretary-general Ken Loo told The Post on Thursday that the association had been working with the EBCA to request the EBA withdrawal postponement amid the Covid-19 pandemic.

“We hope the EU will consider and agree to the request. For now, we are trying to settle the immediate issue of Covid-19 and how to survive in the next few months.

“We also respectfully solicit the EU for a possible extension of the effective date for implementation. If approved, this would be very helpful for some factories that produce non-seasonal items.

“Due to the coronavirus, many customers are rephasing the April- June shipments to August onwards, which would be affected by the duty issue. Postponing the withdrawal will definitely help in this situation,” he said.

Cambodia’s total exports to the EU reached €5.4 billion ($5.87 billion) in 2018, €5.2 billion of which entered the EU market under the EBA scheme.

MOST VIEWED

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Gov’t to boost Siem Reap tourism

    The Ministry of Tourism released the results of an inter-ministerial committee meeting concerning Siem Reap province’s Tourism Development Master Plan for 2020-2035 on Wednesday, revealing the government’s plan to improve the overall tourist landscape there. The meeting was attended by Minister of Tourism

  • Government set to make up for cancelled April holiday

    The government is set to make up for a five-day Khmer New Year holiday late this month or early next month. The holiday was earlier cancelled due to the onset of Covid-19. The announcement is expected on Friday as the government is studying a range

  • Crumbling prices, rent ruffle condo segment

    The prolonged decline in international arrivals to Cambodia intensified by renewed Covid-19 fears has driven down condominium sales prices and rental rates in Phnom Penh, a research report said. CBRE Cambodia, the local affiliate of US commercial real estate services and investment firm CBRE Group

  • Over $3M in traffic fines collected in two months

    Traffic police officers collected over $3 million in fines throughout the Kingdom during the past two months when officers strictly enforced the law in accordance with a May sub-decree, officials said. As incentives, law enforcement officers received between 200,000 and two million riel ($50 to $500) each. The figures

  • More than 10,000 workers suspended

    More than 10,000 workers at 18 factories in Svay Rieng province have been suspended because of Covid-19, said provincial deputy governor Ros Pharith. Home to 11 special economic zones, Pharith said Svay Rieng has not been spared as the pandemic takes a toll on the global economy. “There

  • Nod given for school exams

    The Ministry of Education, Youth and Sport announced that State-run higher educational institutions can hold examinations to end the academic year, while private schools can organise grade 9 and grade 12 examinations at their premises for two days. However, private institutions have to take measures to prevent

  • Kingdom’s exports to US mushroom 25.94% in first five months to $2.4B

    Though Cambodia’s exports to other countries have been stalled amid the evolving Covid-19 environment, the Kingdom’s shipments to the US were worth 25.94 per cent more in the first five months of this year than they were in the year-ago period. Bilateral trade between

  • Oz lauds Kingdom’s passage of money laundering laws

    In a press release published by the Australian embassy in Phnom Penh on Monday, the country applauded Cambodia’s stance on transnational crimes as well as its promulgation of an anti-money laundering law and a law on combating proliferation financing. The praise came after King

  • Lotus face masks designed to cover globe

    A French designer in Cambodia has produced ecological face masks from lotus fibre to supply local and international markets with an eye on preserving ancestral techniques and supporting Cambodian women in rural communities. During a trip to Asia, Awen Delaval, an eco-friendly fashion designer, was