Turning point for Cambodia-EU ties

Capital Cambodia Staff

Will a new EU Parliament show greater maturity in dealing with Cambodia?

Will a new EU Parliament show greater maturity in dealing with Cambodia?

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Elections in May could result in the possibility of new Members of the European Parliament sitting by mid-2019. While there is hope this may trigger changes in the European Commission – which has threatened to remove the Everything but Arms deal from Cambodia – the rise of the far-right in Europe could be another damaging element.

Phnom Penh is hoping for a less stringent EU Trade Commissioner to take office after the May elections but there is also the risk of an influx of far-right MEP’s in the Parliament. The Commissioners are nominated by the Parliament after each election but there is no guarantee these Commissioners will be more lenient compared to the current sitting ones.

Europe is facing major challenges with the rise of far-right political forces that are testing the EU’s resilience against such political upheavals. They are expected to garner 20 percent to 30 percent of votes in the EU Parliamentary elections.

In Germany, the far-right Alternative for Germany – third largest party in the Bundestag – eyes success in the EU parliamentary elections next year. With German Chancellor Angela Merkel bowing out – after failing to push her pro-refugee policies – there are fears the far right might gain further traction.

Italy’s League, Austria’s Freedom party, and France’s National Rally are the other rising far-right movements in Europe, not to forget the United Kingdom Independence Party (UKIP) that campaigned for Brexit. They believe in a new, revamped EU. Those winning a larger share of seats might result in more pressure on the European Commission. No one knows how they will handle rights issues outside the European Union which remains a grey area. They offer no guarantees but if they were to ignore rights issues and political turmoil in other countries, it does not mean they will not act by deploying sanctions on foreign nations.

A change in leadership expected at the European Commission will mean the end of the term for Commissioner Cecilia Malmström. She is seen as a stumbling block in the Cambodia-EU talks despite a softening in the EU’s stance lately. The EU indicated its doors were opened for dialogue but that will come at a high price.

Malmström threatened to strip Cambodia of its preferential terms of trade, a move apparently linked to the political events that rocked Cambodia in 2018. The rise of the Cambodian People’s Party as the only party holding all the seats in the Parliament, the closing-down of the Cambodia Daily (called a newsletter by pro-government critics), and an exodus of political figures from the country as well as the dissolution of the main opposition political organisation – the Cambodia National Rescue Party has clearly influenced the EU. The suspension of the EBA, technically speaking, is not an economic sanction, and is a sign the EU’s door is still open for dialogue.

But Brussels has not been nice to Cambodia. Not only did it trigger the special clauses that will allow for the repeal of the EBA, it also attacked Cambodia’s rice export to the EU. On the other hand, observers believe the removal of trade preferences creates a negative perception for the country. Other countries that have trade deals with a country facing EBA removal might find it easier to impose sanctions and cut-off trade ties. This, in turn, might influence the EU to become more inclined to impose sanctions similar to those it imposed on neighbouring Myanmar.

Has Cambodia graduated?

Cambodia is struggling to get the EU to reverse its decision to cancel the decades-old EBA, which was initiated as a voluntary move by the Europeans to benefit least developed countries. This is an interesting situation for Cambodia and an embarrassing one for the EU, which is not targeting countries with worst rights records and a dire absence of political freedom compared to Phnom Penh. The question is whether Cambodia has, in fact, graduated from LDC status? To be given trade and investment preferential treatment, an LDC country must pass several criteria, beginning with poverty alleviation. To be an LDC nation, the country must have GNI per capita that is less than US$1,025. GNI per capita of over $1,230 is needed to graduate from it. Cambodia has a higher GNI. The country must also have human resource weakness and display obvious economic vulnerability. Cambodia is less vulnerable than its peers in the region. It is even a champion of economic growth and has dealt with poverty in particular with flying c
olours. Cambodia is also more advanced than Laos, Myanmar and East Timor (the three other South-east Asian nations under the LDC group). If this indicates Cambodia has indeed graduated from the LDC, it is possible the preferential status was also nearing its end and the EBA removal would be a natural course.

If this is the case, the question is whether Cambodia is potentially ready to negotiate Free Trade Agreements (FTAs) with groupings like the EU?

But whether the EU will be ready to look at Cambodia with a different eye is the other salient question! CapCam


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