Cambodia’s Prime Minister Hun Sen affirmed that Cambodia will not fight to retrieve the 20 percent of EBA trade scheme from EU, as the Kingdom already takes measures against the partial withdrawal of preferential trade system.
The premier spoke in the press conference and a meeting with Supreme Council for Consultations on 24 February 2020 held at the Peace Palace.
“Cambodia is mentally ready on the loss of 20 percent [of EBA],” he said, adding that “Cambodia cannot trade her laws and sovereignty for a 20 percent trade scheme.”
According to the premier, if the factory closes due to the lack of raw materials ិ impacted by Covid-19, workers will be paid 60 percent of their minimum wage, in which 40 percent paid by factory owner and the other 20 percent funded by government subsidies.
The government will waive taxes from enterprises for six months to one year to cope with coronavirus and EBA.
Director of the Center for Policy Study Chan Sophal said that the impact of partial withdrawal of the European Union’s “Everything But Arms” (EBA) preferential tariff affects 20 percent of Cambodia’s total exports to the EU.
“The decision of the European Commission on 12 February 2020 requires Cambodia to pay 20 percent on all exports to the EU, which costs her approximately USD 100 million per annum. This is only 0.35 percent of the Kingdom’s total GDP. Thus it does not severely affect the Kingdom’s economy,” Sophal wrote on his Facebook in mid February.
Sophal, also the expert on economy, also sees the positive side of the partial withdrawal.
“I think it is a good opportunity for Cambodia (government, private, and garment workers) to start being independent and living without the need for special arrangement,” Sophal said.
On 12 February 2020, the European Commission issued a decision to partially suspended the EBA tax preferences from Cambodia for certain products in the garment, footwear, traveling products and cane sugar.