Trade sanctions as a political weapon

The European Union, in both subtle and not so subtle ways, has started imposing sanctions on Cambodia. These, and US lawmakers’ further pressure with trade restrictions on Cambodia is predictable.

FILE PHOTO: European Union flags are seen outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir

The European Union, in both subtle and not so subtle ways, has started imposing sanctions on Cambodia. These, and US lawmakers’ further pressure with trade restrictions on Cambodia is predictable.

For the latest Cambodian Business news, visit Khmer Times Business

The measures, being pushed forward by the EU and US, disguised as trade measures, are in effect subtle ways of dictating terms to Cambodia as to what it should do politically.

They seem not to realise that these sanctions, like the removal of rice safeguards, impending withdrawal of the EBA, and calls by US congressmen to review the preferential trade treatment under the General System of Preferences that Cambodia receives from the US, negatively affect not only the EU and US themselves but also on US allies and specifically the relationship between them.

According to, economic sanctions are a tool in international relations used in an attempt to force one country to comply with another’s wish. The US is by far the largest implementer of economic sanctions in the world and now the EU has taken on the leading role, insofar as Cambodia is concerned.

While some see sanctions as a low cost method for accomplishing foreign policy goals, the toll on a developing nation’s economy, its people, its socio-economic goals and aspirations, and the end result it has on Cambodia’s people, are never a consideration. says sanctions are ostensibly an economic issue, although ramifications are often humanitarian as well. The idea is to punish countries for reprehensible behaviour by restricting trade with them, thus forcing them to change their policy but economic sanctions may often have a greater effect on a country’s general population than on its leaders.

“While the aim of sanctions is to apply pressure on a country’s leadership to bring about a desired result, the problem exists that such pressures could, and often backfire. If sanctions limit the number of supplies coming into a country, that country’s government can better control the distribution of goods,” it says.

According to the Heritage Foundation’s “User’s Guide to Economic Sanctions” (O’Quinn, June 1997), these measures can include limiting exports and imports to and from the target country, restricting investments in the target country, prohibiting private financial transactions between a sender country’s citizens and the target country’s citizens or government, and restricting the ability of a sender country’s government programmes … to assist trade and investment with the target country.

Unilateral sanctions are increasingly ineffective in a more globalised economy. When the US for example, decides it will not trade with a country, there are many more nations ready to step in and take its place.

However, in the case of EU, total trade between the two partners equalled €5.86 billion. Herein lies the problem. The EU, unlike the US, comprises 28 member states, and as such, sanctions by the EU will hit Cambodia more severely. So diversifying its exports to other nations (to make up for the “loss”) as they might not have such tariffs, is a tall order for Cambodia.

Close to one million workers rely on textile exports from Cambodia, a large portion of which are destined for EU markets.

Industry representatives have raised concerns that the move could make Cambodia less competitive and drive business away.

Close to three million farmers depend on rice exports and the EU has imposed safeguards, which limits rice exports to the EU, on the complaints of just two countries – Italy and Spain, who themselves do not grow a single grain of Jasmine rice but yet pushed the EU to impose safeguards to tax Cambodia’s rice exports to the EU.

If their intention is to punish Cambodia for supposed human rights and democracy violations, it should listen to the majority of the population and not just a single person.

Related articles

The looming Fed’s loose monetary policy
Wei Hongxu

The US administration’s new tariff threats against Mexico and India show that the US has a tendency to expand its range of trade frictions with other countries. This has undoubtedly created further impact on the global capital market.