EU withdraws Cambodia trade benefits over human rights

BRUSSELS (Reuters) - The European Union will suspend a part of the trade preferences Cambodia enjoys because of systematic violations of human rights, the European Commission said on Wednesday.

Cambodia will lose about 20% of the preferential rights it enjoys under the Everything But Arms (EBA) scheme that the EU offers to 48 of the world’s poorest countries. The percentage is equivalent to 1 billion euros ($1.1 billion) of Cambodia’s exports to the EU.

The Commission will replace zero duties with standard tariffs for certain garments and footwear, all travel goods and sugar. The standard tariff for clothing is 12%.

The Commission said it would still support Cambodia’s diversification of its exports so emerging industries and high value-added garments and certain footwear would continue to enjoy duty-free, quota-free access to the European Union.

The changes will take place on August 12, unless EU governments or the European Parliament block them.

The EU executive said in a report on Tuesday that Cambodian Prime Minister Hun Sen’s government had cracked down on opposition, civil society groups and the media over the past three years.

“The European Union will not stand and watch as democracy is eroded, human rights curtailed, and free debate silenced,” EU foreign policy chief Josep Borrell said in a statement. “For the trade preferences to be reinstated, the Cambodian authorities need to take the necessary measures.”

Global clothing and shoe brands, including Adidas ADSGn.DE, Puma PUMG.DE and Levi Strauss LEVI.N, have urged Cambodia to reform, but Hun Sen said on Tuesday that the country would not "bow down" to foreign demands.

Cambodia was the second-highest beneficiary of EBA in 2018, behind Bangladesh. Its total exports to the EU reached 5.4 billion euros ($5.9 billion) in 2018, double their level in 2013.

Reporting by Philip Blenkinsop; Editing by Angus MacSwan