Deepest concerns over EU withdrawal of EBA scheme

March 28,2019

Reader’s Letter

https://www.phnompenhpost.com

European Commissioner for Trade Cecilia Malmstrom launched the initial process to begin EBA withdrawal on October 4 last year. AFP

Dear Editor,

Both in my capacities as entrepreneur and as representative of the European business community in Cambodia I reiterate my attachment to European values and engagement to support Cambodia improve its human rights records.

In this regard, jointly with human rights advocates and European Chamber of Commerce (EuroCham)​ members, I want to voice once more my deepest concerns in respect to the process to withdraw preferences offered to Cambodia under the Everything But Arms (EBA) scheme.

Trade preference is granted to the country as a whole not to individual operators, and suspension should be employed the same way.

The use of trade as leverage to restore human rights raises an ethical question as to whether a negative impact on businesses, workers and their families who are not responsible for the situation leading to the adoption of sanctions is a legitimate means to pursue foreign policy objectives.

Many entrepreneurs like myself, locals and foreigners, have contributed to the progress of human rights by further enhancing economic growth and socio-economic development for people here in Cambodia.

Together we share growing concerns over hard-won gains that could be imperilled, and the condition of the Cambodian people worsened by depriving poor people of jobs and endangering their livelihoods.

A withdrawal of EBA could produce results that run counter to other rights, like the protection of vulnerable groups of people and the promotion of basic human rights embedded in the UN Charter and human rights treaties.

In terms of identities and perceptions, a withdrawal of EBA unnecessarily increases the confusion as to the notion of “human rights” in Asia where there is a need for universal values to be entrenched.

Deepening human suffering comes from the manner in which actors pursue their objectives.

A disregard for impoverished communities is understandably perceived as a worrying feature.

Economic sanctions challenge the basic sense of right and wrong and create ambiguity about human rights.

As seen in the local newspapers, a Cambodian analyst stated: “Those who are happy to see sanctions should be ashamed. They can be protagonists of human rights, they are in fact the enemy of humanity.”

Seen as harmful and unjust by affecting ordinary citizens, and driving innocents into poverty, I join openly the ones that demand a refrain from using such measures for human rights, unless the EU can provide sufficient, consistent and coherent guarantees for the protection of the political, economic, social and cultural rights of affected communities.

Shouldn’t economic sanctions be proportional and only used in the most extreme cases?

Researchers have estimated the probability of success of such measures by analysing data from past cases.

In general terms, all international sanctions combined, scholars demonstrate a low probability of success in reaching their goals: five, 22 or 30 per cent.

A high probability of failure: between 65-95 per cent of the time.

Looking at the nature of sanctions, as of today, withdrawals of the US GSP scheme and EBA have not recorded a single case of compliance.

When reinstatements have occurred, they have not been driven by the target’s compliance.The probability of success is reduced to zero.

Looking at the goal of sanctions, in this case the restoration of a democratic environment, sanctions designed for this purpose are significantly associated with higher levels of democracy.

They rarely manage to instantly create liberal democracies, but more commonly some form of electoral authoritarianism, increasing prospects for future democratisation.

However, authors warn “these findings should not be taken as evidence to justify all types of sanctions in all contexts […] There are several examples of highly unsuccessful democratic sanctions in the past”.

In general terms, international sanctions have a counterproductive effect on democracy.

There may be an increase of repression in an effort to stabilise the regime and they can create incentives for the leadership to restrict political liberties and consolidate power.

In addition, target elites might respond by changing their priorities to military spending in order to enhance their coercive capacity.

I urge the EU to carry out an impact assessment of any trade measures to be taken in response to human rights violations and balance any negative impact on the local population and affected workers against its possible effectiveness in Cambodia.

As human rights are the stated primary objective of the process of withdrawal of EBA, coherence and synergy within the EU institutions to negotiate with stakeholders in Cambodia should take place effectively.

There is a need to shift away from a focus on trade to a focus on benefits and achievements in human rights.

I regret that the decision and process are led by the Directorate General for Trade – an increased role of the directorate generals specialising in human rights and development would be more appropriate.

They should play the lead role to address the human rights situation and their expertise can ensure these issues remain the main concern.

I believe the EU’s expertise in human rights, and whose approach is to deliver results on the ground by integrating lessons learned, can contribute to attaining the objective of democratisation.

In the present situation, the process to review Cambodia’s duty-free access needs to be transparent and based on European values.

In line with the Trade Commissioner’s vision of trade as a force for good in the world, I recall any action to promote human rights cannot be justified if it has a negative impact on human rights.

The EU needs to consider as a priority the rights and well-being of ordinary citizens, with particular attention paid to the most vulnerable populations.

They should not be sacrificed.

As the final decision will depend upon the judgement of the EU and in the absence of an impartial and independent body to monitor the progress of dialogue between the EU and the Cambodian government, I urge the EU to define realistic expected results, monitor progress toward the achievement of expected results, integrate lessons learned and report on performance in all transparency. In addition, the EU should not leave itself open to accusations of double standards.

When the EU threatened Cambodia on its failure to meet human rights provisions, the bloc was in a process to conclude the “most ambitious agreement ever made with a developing country” – Vietnam.

According to the 2018 Democracy Index, Cambodia ranks 125th and Vietnam 139th. According to the 2018 press freedom index, Cambodia ranks 142nd and Vietnam 175th.

The use of double standards when it comes to democracy and human rights is counterproductive for the EU, for the credibility of its external action and, most importantly, for the very principles it promotes.

If suspension is not consistently applied, as a result the activation of the withdrawal procedure in Cambodia will be seen as subject to political and economic considerations.

The EU’s EBA offers unilateral trade preferences to Cambodia but the EU’s FTA with Vietnam removes or reduces customs tariffs in bilateral trade.

It is obvious that EU economic interests are part of the decision to refrain from imposing economic sanctions.

In the past, the EU has also been criticised for being at the forefront of the practice of linking commercial objectives with political interests through the use of conditionality clauses.

A misunderstanding of the motives of decision-making on conditionality clauses with regards to human rights would undermine the government’s awareness that Cambodia’s steps to improve rights will lead to a positive outcome.

Transparency is mandatory and I contest the use of selective conditionality and the application of double standards.

Questions of human rights need to be dealt with objectively, regardless of any economic or political gain.

In terms of democracy and political rights, in some cases, incentives can be more effective and preferable to sanctions.

As a long-timer actor of the private sector, I acknowledge the negative influence of trade on labour conditions and environmental preservation.

In this regard, a withdrawal of EBA is likely to translate into a deterioration of labour conditions and may unfairly penalise workers, including those employed in European businesses in Cambodia.

Instead, to prevent and remedy against negative impacts of trade on human and labour rights, the EU should conduct a human rights impact assessment before granting trade preferences to a candidate country and during its implementation.

These assessments should be undertaken by independent experts, in consultation with civil society, including with representatives of communities affected by trade preferences.

Arnaud Darc,CEO of Thalias Hospitality Group, Phnom Penh

Send letters to: newsroom@phnompenhpost.com or PO Box 146, Phnom Penh, Cambodia. The Post reserves the right to edit letters to a shorter length.The views expressed above are solely the author’s and do not reflect any positions taken by The Phnom Penh Post.

https://www.phnompenhpost.com/opinion/deepest-concerns-over-eu-withdrawal-eba-scheme?fbclid=IwAR22bhyQeuZYATAd2B08tDj7RKlVu674frzR4raZ_m-ZWevkVlgSdI4NW40

Farewell to the worst prime minister bar none – until the next one

March 28, 2019

Polly Toynbee

 

Theresa May will quit after an ‘orderly handover’ but when the EU withdrawal deal is done, we may actually come to miss her

 

‘The mystery is how this woman without qualities, with all her incapacities, infelicities and ineptitudes, ever came to hold the highest office.’ Photograph: Alastair Grant/AP

Theresa May will leave office in an “orderly handover” whenever an EU withdrawal deal is done. No one is weeping. The oddity is: we may yet come to miss her, though she has been the worst prime minister of our political lifetimes – bar none. Yet there was one great good purpose in her premiership: by occupying the space, however vacuously, she kept out the barbarian hordes of Brexiteers barging one another out of the way to seize her throne.

Now she has surrendered that one useful role, leaving the country to the untender mercies of those competing in Europhobia for the votes of some 120,000 dwindling Tory party members. To use her deathless phrase, nothing will be changed by her departure. Parliament will be as gridlocked as ever, the combat deadlier with an avowed Brextremist at the helm.

Looking back, in comparison with who comes after her, she may yet come to be seen as having attempted a muddled middle way, fighting off no-deal delusionists, forging a plausible enough plan to gain agreement from the EU27.

Judge her legacy by her own “mission” announced on the steps of Downing Street in July 2016. Did she mean the heartwarming words she spoke that day? As each of her list of pledges has failed and failed again, she seemed to make no attempt to “fight against burning injustices”. More people are poor, especially children, and they are poorer than before as universal credit rolls over them – but there are twice as many billionaires. Ethnic minorities are no better treated by the criminal justice system, working class white boys no more likely to reach university and escalating numbers of her “just about managing” are using food banks. Taxes continue to be cut more for the better off and corporations, despite her pledge not to “entrench the advantages of the fortunate few”.

As for Europe, read her words now and weep: “As we leave the EU we will forge a new, bold, positive role for ourselves in the world.” Instead, polls show the overwhelming view of voters is that we have suffered a “national humiliation”.

In that speech she spoke of the union as that “precious, precious bond”, but she leaves the UK closer to breaking apart than it has ever been, by ignoring the Scottish and Northern Irish remain vote, just as she ignored remainers everywhere. Recklessly, she chose an illusory Conservative party unity – and lost even that, leaving her party irreparably split. That may turn out to be an accidental bonus she bequeaths to the nation.

To use her deathless phrase, nothing will be changed by her departure

The mystery is how this woman without qualities, with all her incapacities, infelicities and ineptitudes, ever came to hold the highest office. Or why she wanted it. No one made her do it, greatness was not thrust upon her; indeed, it’s said she planned for it all her life. So feel no pity that she chose to take on the impossible Brexit task with a vipers’ nest of a parliament and a party at war with itself. Her unsuitability was well known. Every encounter with others is an excruciating display of gaucheness. No small talk, no big talk, no ideas, no charm, no warmth, but famous for making everyone she meets painfully ill-at-ease. Her polite and courteous EU counterparts were dumbfounded by her inability at the essentials of diplomacy. She never had it in her to be the healer the country desperately needed. Instead she chose to appease the ERG, and sacrifice the 48% – now grown to be the majority.

Her every leopard skin-shod move was a misstep. At first, the vicar’s daughter had the benefit of the doubt: surely she was at least sincere, honest, a truth-teller? But as she foolishly laid down contradictory red lines, breaking them was inevitable. For far longer than was credible, she swore blind that Britain would leave the EU on 29 March. No border down the Irish Sea – well, yes, in the backstop. No role for the European court of justice – but it will remain as necessary adjudicator of agreements. No free vote, but oh yes there is. So who knows, maybe there will no resignation after all or not until after a long extension?

When she goes we face yet another disgraceful handover of near absolute power without consent of the electorate. As in the case of both May herself and Gordon Brown, that is a political error. This time a field as big as the Grand National will compete, but not for approval of the public, only for the backing of a very small, very peculiar selectorate. Never again. At least let every contender pledge to hold a general election to win public consent. It’s a grim thought that we may look back on May’s misbegotten premiership as better than what came after.

• Polly Toynbee is a Guardian columnist

https://www.theguardian.com/commentisfree/2019/mar/27/prime-minister-theresa-may-eu-withdrawal?utm_source=Fareed%27s+Global+Briefing&utm_campaign=b1023c3324-EMAIL_CAMPAIGN_2019_03_27_10_58&utm_medium=email&utm_term=0_6f2e93382a-b1023c3324-98213289

Building a resilient Cambodian Economy

March 10, 2019

https://capitalcambodia.com/building-an-economically-resilient-cambodia/?fbclid=IwAR1-Oa4fUT_Z-LHMUPUvarQA1-asp4396Cd4V9OZFmSRL-y4tavaDgZ8ing

Within the context of looming economic pressures by the EU, analysts have drawn quick conclusions that Cambodia’s economy is going to collapse. This piece provides an alternative view explaining why Cambodia will not face economic crisis driven by external pressures and sanctions.

Cambodia has opted for an open economy since the early 1990s based on the belief that reforms and openings are necessary for economic development. Being a least developed economy, it was granted preferential tariff schemes, and could afford to export to Europe and the US.

The decision of the EU to launch procedures to temporarily suspend trade preferences would compel the Cambodian government to speed up its reforms and diversification strategy. It can be viewed as a “positive” factor.

Improving business and investment environment, increasing productivity, and reducing barriers and cost associated with trade would need urgent attention and intervention from the state. Cambodia’s economic structure has been gradually moving from labour-intensive industries to a knowledgebased economy.

The service sector now accounts for about 50 percent of GDP. The annual growth rate of the sector has been more than seven percent from 2014 to 2018. Economic pressures from the EU will force Cambodia to accelerate its economic restructuring towards a service-driven growth.

The advantages and strengths of Cambodia rely on its dynamic and entrepreneurial young workforce. As education reforms and skill development programmes are on the right track, Cambodia will be able to produce a new generation of young, skilled workers for the coming years.

Regional integration is one of the key pillars of its foreign economic diplomacy. As Cambodia’s economic lifeline is increasingly connected with ASEAN and Asia, its future will largely be defined by the Asian economic powerhouses. ASEAN will be the fourth largest economy in the world by 2030.

The economic pressures from the EU will not overly affect investors’ confidence as Cambodia will be able to adjust itself to changes. Foreign investors should be confident of the future economic trend and dynamics of Cambodia.

The first drop of oil to be extracted from Cambodia’s offshore oil field territory is scheduled  for late 2019. The news follows the latest update from KrisEnergy that it has now closed invitations to contractors for the tender for the engineering, procurement, construction, installation and commissioning services for the Apsara Oil Field Project.

 

Light manufacturing, high-tech, and service industries are key areas that foreign investors should invest as the government in cooperation with development partners are pouring in more resources in building hard and soft infrastructure to support the industrialisation and modernisation of the service sector.

The eventual possibility of the EU revoking the EBA has been on Cambodia’s mind for some time now. This led to the formulation and adoption of the Industrial Development Policy (IDP) in 2015. The opening paragraph of the IDP states: “The launching of this policy connotes the necessity and the urgency to embark on a `new growth strategy’ that responds to the structural transformation of domestic economy, and the changing regional and global economic architecture.

The adoption of this policy is motivated by the following considerations:

First, the favourable geopolitical spillovers in terms of linking Cambodian economy and its industry to the region especially within the ASEAN Economic Community and regional economic liberalisation frameworks;

Second, the potential role of industrial sector in promoting growth and creating new jobs in the context of an open economy, a demographic dividend and major structural changes that are conducive for industrial growth;

Third, the critical role of industrial sector as a policy tool to enhance the performance of core economic sectors such as agriculture and services that will boost economic growth;

And fourth, the importance of the industrial sector as a focus for initiating both structural reforms and governance reforms of key national economic institutions with the aim at boosting economic productivity in long-term and avoiding falling into the “middle-income trap”.

However, Cambodia’s industrial sector remains weak and narrow as reflected by its simple structure of manufacturing and low level of sophistication that mainly focusses on garments and food processing while most manufacturing activities are still family-based and do not have the capacity to compete in the international market.

The industries feature a lack of diversity, an informal and missing middle structure, a weak entrepreneurship, an urban-centered industry, low value addition, and low-level technology application. Micro-enterprises represent 97 percent of the sector but generate a mere 30 percent of jobs, and contribute only 12 percent to the overall turnover. But with the eventual EBA revocation, Cambodia ought not be held hostage by the EU or any other trading partner.

The EBA has been “weaponised” by the EU to compel it to make considerable concessions not directly linked to trade but to domestic politics, at a time when EU members themselves are questioning their membership with the trade bloc. Is the EU subservient to the US, and doing its bidding? It appears so, given the quick response of the US Embassy that supported EU’s action, reiterating similar demands on Cambodia.

In this aspect, the speech by Hungarian Foreign Minister Peter Szijjarto earlier this month in the presence of US Secretary of State Michael R. Pompeo deserves a mention. It is a chilling reminder of what Cambodia has faced year after year since 1993.

“We Hungarians, the Hungarian government, has based our foreign policy on mutual respect, and we think that the world is not going to be a better place if some countries spend their time intervening in the internal politics of other countries or lecturing them. Therefore, based on principles, we have extended our veto in the EU whenever it came to criticism concerning the decisions – political decisions of the US.

For that, we have undergone and have taken on conflicts and risks but we’re not going to consent to it in the future, and that either the EU or other international organisation would criticise the sovereign political decisions of the US. At the same time, we also carry out a foreign policy that is based on openness and sincerity. So we say the same thing behind the scenes as we say here. It is easy therefore for us to discuss issues like relations to Russia or the gaining of ground by China in other places or also our relationship with Russia.

“As I also told the Secretary whenever we talk about the economy gaining ground of China, then Hungary is responsible for 1.2 percent of the EU-China trade, and I also say there is a hypocrisy concerning the cooperation with Russia as there is a lot of criticism on the surface, and below it, there is a lot of trade between Europe and Russia in billions of euros”.

Coming back to the EU and Cambodia, why has the EU ignored the gains made by the factories here, many of whom are subjected to stringent inspections and rules, and the generous benefits extended to the workers? Why are there double standards or to paraphrase Szijjarto’s words – a hypocrisy concerning the internal issues of Cambodia as there is a lot of criticism on the surface.

Yet, the EU does business with Cambodia’s neighbours whose workers’ rights are worse? Is it because it hedges on China in terms of its economy and development since Cambodia needs huge investments to boost infrastructure, and hedges less on the West, who in any case, do not invest in such projects on a scale that could replace China? Or is it because Cambodia is seen as a small economy to matter in the grand geopolitical chess game of Western superpowers who use Cambodia’s plight to enforce their own political will on Cambodia and Cambodians?

In time, it would be in the interest of the West – the US and EU, as well as China, Korea, Japan Australia, and Russia to give equal emphasis on Cambodia’s economics and politics, and not just focus on its neighbours who seem bigger but have worse-off human rights and political record. In this scenario, it may not be wrong to say that Cambodia should just abandon the EBA and no longer fight a lost cause.

It should strengthen its economy and trade while cutting corruption and bureaucracy to make the products and economy more resilient, and investor-friendly to all nations, making it a competitive economy. CapCam

https://capitalcambodia.com/building-an-economically-resilient-cambodia/?fbclid=IwAR1-Oa4fUT_Z-LHMUPUvarQA1-asp4396Cd4V9OZFmSRL-y4tavaDgZ8ing

 

Brexit Is Hell

March 7,2019

Mar 4, 2019

by Harold James

Over time, public conceptions of hell have migrated from the realm of religious belief to that of literature and political aphorism. And nowhere is the idea of eternal damnation as punishment for one’s own choices more appropriate than in the case of the United Kingdom as it hurdles toward the Brexit abyss.

 

PRINCETON – European Council President Donald Tusk recently sparked controversy by saying there is a “special place in hell” for those who advocated Brexit “without a plan.” To angry Brexiteers, the statement epitomizes the unfeeling, moralistic attitude of the European Union technocracy in Brussels. British Prime Minister Theresa May duly issued a statement rebuking Tusk for his remark.

But May’s response scarcely matters. She has already extended her deadline for holding a “meaningful vote” on an EU-exit deal, effectively confirming that she will remain bereft of a plan until the final moments. At this rate, the delays and extensions of Brexit deadlines might well continue indefinitely.

Tusk’s great offense was to offer a banal and universal truth. Whether you are in London, Washington, DC, or anywhere else, it is never advisable to enter into a negotiation without clear objectives and a sense of how the other side will respond. Hence, throughout history, statesmen such as Otto von Bismarck have regarded diplomacy as a chess game. As Bismarck well knew, it is not enough just to move pieces around; one must also anticipate what will come next.

As for the theological language in Tusk’s indictment, one could argue that it is perfectly appropriate for politicians in a largely secularized Europe to speak of hell. After all, even many Christian clergy have moved beyond belief in an afterlife of perpetual damnation. And the Anglican Church abandoned the idea of purgatory back in the sixteenth century, with the Reformation.

In Christopher Marlowe’s classic play Doctor Faustus (1592), the title character asks Mephistopheles what a demon is doing in his study instead of in hell. “Why, this is hell,” replies Mephistopheles, “nor am I out of it.” Equally all-encompassing was the atheist Jean-Paul Sartre’s own conception: “Hell is other people.”

What hell implies in a modern political context is open to debate, at least until we have a twenty-first-century Dante to offer a comprehensive eschatology and a new map to the Inferno. In view of former US Secretary of State Madeleine Albright’ defense of Hillary Clinton’s flawed 2016 presidential bid, for example, hell is the final destination for “women who don’t help each other.” Presumably, Albright did not mean that the 42% of women voters who backed Trump have a fiery future in store for them.

Meanwhile, some Italian journalists have alleged, erroneously, that even Pope Francis has dispensed with the notion of hell. In reality, he has put hell at the center of his vision of humanity. Francis reminds us that hell originally derived from a rebellious angel’s arrogance, or superbia. A vice deeply embedded in the human psyche, arrogance is the act of telling God, “You take care of yourself because I’ll take care of myself,” Francis explained in 2015. Accordingly, “They don’t send you to hell, you go there because you choose to be there.”

Brexit represents precisely this course. If hell is thinking that you do not need others, and that you need only look out for yourself, then the Brexiteers are already there. Those who believe only in themselves see no need to negotiate, because they assume the other side will simply bend to their will.

But in international relations, the assumption that one can regulate everything by oneself creates a hell that others have to live in, too. Hell, in this sense, is what happens when people succumb to the lure of self-determination and “sovereignty,” creating a self-perpetuating cycle of strained relationships and mutually destructive unilateralism. This version of hell tends to last quite a long time indeed, because each side has its own selective memory and wants to punish the other.

While the assertion of sovereignty seems to conjure endless new possibilities, as it clearly has for the Brexiteers, it actually constrains one’s choices. Those who renounce treaties, for example, invite others to do the same, whereupon it becomes all the more difficult to forge any kind of agreement at all. And those who have convinced themselves that they can choose freely among endless unrealized opportunities tend to live in constant regret of what might have been. This is the trap laid by hubris.

Thus, like Tantalus forever grasping at the fruit that is just beyond his reach, the United Kingdom wants to pursue trade deals that its membership in the EU otherwise precludes. Left unsaid is what that would mean in practice. The UK could aim to maximize prosperity by pushing deregulation as far as possible. Yet to trade profitably with other countries or the EU, it would still have to meet their regulatory standards regarding safety, quality, and so forth. Moreover, outside the EU’s regulatory framework, Britain’s newfound freedom would also imply new responsibilities to introduce regulations protecting UK residents.

The real question, then, is whether escape is even possible. If May wanted to be bold, she could issue the following statement: “Brexit is a terrible mistake. The decision was reached after a campaign of lies and malign foreign influence, and it is obvious that its costs will far exceed its benefits. As such, my government has decided not to pursue it any further. Instead, we will commit to working with the EU to address British concerns and prepare for an unpredictable future.”

Such a statement is of course impossible, because May has already paid the ferryman through her previous choices. What awaits her and the UK is more punishment. First, the dismal reality on the ground will be exposed, and it will stand in shocking contrast to what might have been. Then, someone will have to be held responsible. But assigning blame is a punishment in itself. In Dante’s telling, the adulteress Francesca da Rimini spends the rest of eternity incessantly pinning the blame for her actions on everyone and everything but herself.

Brexit augurs a similar national fate. The debates in Westminster and Whitehall show no sign of ever ending, and it is becoming increasingly obvious why: Brexit is eternal damnation.

Harold James

 

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

 

 

To Lose or Not to Lose: Cambodia’s Dilemma over its EBA Status

February 27, 2019

By Kimkong Heng

 

http://www.ippreview.com

https://dinmerican.wordpress.com/2019/02/27/to-lose-or-not-to-lose-cambodias-dilemma-over-its-eba-status/

William Shakespeare’s famous quote, “to be or not to be, that is the question”, can now be applied to what is happening in Cambodia, but with a twist. As the country is now negotiating with the European Union (EU) regarding the latter’s wish to strip off its Everything But Arms (EBA) trade preferences from the former, we can see the relevance of Shakespeare’s well known line and we can say “to lose or not to lose, that is a Cambodian dilemma”.

After the EU threatened to remove its preferential trade deal in response to Phnom Penh’s perceived lack of commitment to improve its democracy and human rights situation, the country now faces a dilemma. On one side, Cambodia has to satisfy the demands of the EU, which may eventually result in the reinstatement of the opposition Cambodia National Rescue Party (CNRP), dissolved by the Cambodian Supreme Court in 2017. This is a dilemma on the part of the incumbent Cambodian government because, as the results of the 2013 national election and 2017 local elections showed, the CNRP could be a threat to the domination of the ruling Cambodian People’s Party (CPP) of Prime Minister Hun Sen. Dissolving the opposition before the election is clearly a win-win strategy that the CPP employed to secure victory. Reinstating it is certainly not part of the government’s agenda.

On the other side of the dilemma, Cambodia is facing a potential loss of its EBA status after the EU began a procedure to withdraw its trade preferences from the Kingdom in October 2018. Under the EBA scheme, Cambodia being one of the world’s least developed countries is granted with duty-free access to the European market. In 2017 Cambodia’s exports to the EU were valued at 5 billion euros (US$5.8 billion), making Europe the largest export market of Cambodia. The garment and footwear industries, which account for 40 percent of Cambodia’s GDP and employ about 800,000 Cambodian workers, rely to a great extent on tariff-free exports to Europe. Losing the EBA preferences would adversely impact the whole industry which is vital to Cambodia’s economy and has been considered as a sector too big to fail.

Thus, Cambodia is apparently in a dilemma over how to tackle the EBA issue. To continue benefiting from the EU trade preferences, the CPP-led government has to consider bringing back the dissolved opposition, a move Hun Sen and his ruling elites have tried to avoid. However, if Hun Sen’s government refuses to give in to the EU’s human rights demands, it will risk losing the EBA status, the consequences of which may be severe for Cambodia’s economic growth. As it stands, it is no longer a win-win scenario for the Cambodian government. It is a dilemma between sustaining robust economic growth and maintaining political dominance, both of which are critical to the incumbent government’s legitimacy.

Cambodia’s responses to the EU’s potential economic sanctions have been contradictory, perhaps reflecting this dilemma. As David Hutt aptly noted, the Cambodian government’s response to the EBA issue “has oscillated between victimhood and vainglory, between saying Cambodia’s economy won’t be too badly affected by the EBA’s withdrawal and saying that if the EU goes ahead with its threat, it will destroy of livelihoods of millions of Cambodians, mostly the poor”.

The inconsistency in the government’s response may explain the dilemma confronting Hun Sen and the CPP elites. Clearly the Cambodian government understands the potential negative effects that the loss of the EBA scheme may have on the lucrative garment sector that has contributed to Cambodia’s economic growth and directly benefited almost a million garment workers, not to mention the cumulative impact on their extended family. The promulgation by the government that losing the EBA preferences won’t affect Cambodia is far from convincing. How can losing tariff-free export ability not affect the economy that benefits from tariff-free exports? It is not so difficult to comprehend.

After the EU announcement regarding the EBA withdrawal, there have been strong reactions by the Cambodian government and a series of analyses in the media about the EU’s double standards in its treatment of Cambodia. The Cambodian government has called the EU’s EBA threat an extreme injustice and a prejudicial decision. Hun Sen has warned of the death of the opposition and has been reported saying that the EU’s withdrawal of its trade preferences may become the West’s third mistake in dealing with Cambodia.

While Cambodia is facing a dilemma and may easily look to China for support, the EU should probably understand the potential repercussions of its decision.

However, lingering uncertainty regarding the eventual outcome of the EBA withdrawal, coupled with the EU’s recent announcement to implement protectionist tariffs on Cambodia’s rice exports, has worried investors and business leaders in Cambodia. In late January 2019, 40 signatory leaders of industry associations who represent the Cambodian economic community released a joint statement to the EU Trade Commissioner to express their deep concerns with respect to the potential imposition of tariffs and withdrawal of the EBA scheme. The statement appealed to the European Commission and the European member states to continue to support Cambodia by “refraining from taking any action that will harm the interests and livelihoods of the country’s [Cambodia] people”. The EU has not officially responded to the appeal but seems to proceed with its formal procedure to withdraw the EBA benefits from Cambodia; nevertheless, according to the EU, the channels of dialogue to resolve the difference are still kept open.

Although it remains to be seen how this EBA issue will unfold, Cambodia’s recent response to the EU’s calls does not seem to be effective and satisfy the EU’s demands. The Cambodian government has viewed the EU’s dealing with Cambodia as an injustice and a threat to Cambodia’s sovereignty and independence. Complying with the EU requirements, in the Cambodian ruling elites’ view, is like allowing foreign countries or entities to interfere with Cambodian politics or domestic affairs. Cambodia cannot trade its sovereignty, independence, and peace for economic assistance.

Such a line of thinking is applaudable and is well-received by Cambodians, but as has been spelled out in a recent article, “EBA is not a trade pact open to negotiations – it is a trade preference gifted to financially impoverished countries and designed to encourage democratic and social reforms more attuned with European standards”. Therefore, it seems appropriate when the EU demands improvements to the human rights situation in Cambodia. If Cambodia wishes to remain part of this preferential scheme, it has to meet the conditions laid out by the EU with regard to the trade preferences. Cambodia does not have “inherent right to be part of the EBA scheme”.

Despite the dilemma, Cambodia seems to have a choice which, analyzed based on recent political developments, requires it to choose between losing the EBA status or improving the human and political rights situation in the country, perceived to be deteriorating. If no concrete measures are taken to salvage the current situation, losing the EBA benefits would be a high possibility. Cambodia apparently cannot continue to enjoy the duty-free access to the EU market while ignoring the EU’s demands for better human rights and democracy. The aim of EBA preferences is to contribute to the economic development of the world’s poorest countries; however, the preferential scheme does come with conditions that have to be fulfilled by beneficiary countries.

Based on the current development, the EU’s intention to withdraw its special trade preferences granted to Cambodia does have implications for the relationship between the two sides. In the Cambodian government’s words, the EU decision to suspend the EBA preferences would “nullify the enormous positive impact of the European policy from which Cambodia has benefited so far”. The EU measures would also very likely propel Cambodia into a closer embrace of China, its largest aid donor and foreign investor.

Thus, while Cambodia is facing a dilemma and may easily look to China for support, the EU should probably understand the potential repercussions of its decision. Both sides need to bring the issue to the discussion table and continue to keep the path of dialogue open. The way forward, as the EU has suggested, is through dialogue and negotiation. The EU, however, should try harder to understand Cambodia’s difficulty and situation, while Cambodia has to keep an open mind and try to understand the underlying intention of the EU actions with trust and willingness. Going to the discussion table with suspicion, distrust, and accusation is not a viable option, but it only helps to exacerbate the precarious situation.

 

The Accidental Atlanticist-Pence vs. Biden@ Munich

February 26,2019

Feb 25, 2019

by Mark Leonard

https://www.project-syndicate.org/columnist/mark-leonard

At this year’s Munich Security Conference, appearances by former US Vice President Joseph Biden and current Vice President Mike Pence offered the trans-atlanticists in attendance a portrait in contrasts. Yet to achieve the bright future promised by Biden, Europeans need to heed Pence’s dark warnings.

“The transatlantic partnership will always be Europe’s most important relationship. But it can last only if both sides take responsibility for their own affairs. The alliance would be immeasurably stronger if it were based on an honest assessment of each side’s interests and values, rather than on quaint illusions of fellow feeling”.–Mark Leonard

 

MUNICH – Two Americas were represented by two different vice presidents at the Munich Security Conference this year. Between them, former Vice President Joseph Biden certainly received the warmer reception, but Vice President Mike Pence may have unwittingly emerged as the savior of transatlantic relations.

In his address, Pence duly championed his boss, US President Donald Trump, as the “leader of the free world.” But the “free world” he described was scarcely recognizable to the Munich audience. In the world Trump wants to lead, America is not the exceptional power, but merely a normal country putting its own interests first. By that logic, it is only reasonable to break from multilateral institutions that allow weaker countries to free-ride on American largesse.

In keeping with this vision, Pence used his speech to demand that Europeans spend more on defense, and to extol the virtues of the Trump administration’s trade war against China. But the climax came when he enjoined Europe to get in line with the US in suspending the 2015 nuclear deal with Iran – the Joint Comprehensive Plan of Action (JCPOA) – and restoring sanctions on the Islamic Republic.

According to Pence, Iran is plotting another Holocaust, for which Europeans will bear partial responsibility unless they stop undermining US sanctions. This warning came on the tail of a US-hosted conference in Warsaw, which was designed to drive a wedge between European Union countries and derail the bloc’s efforts to salvage the JCPOA.

Pence spoke for the America that works to divide and weaken Europe. The other America, represented in Munich by Biden, views the Trump administration’s actions as an “embarrassment.” In his speech, Biden described an America that does not want to turn its back on allies and that values democracy, the rule of law, freedom of the press, and a close partnership with Europe based on shared “human decency.”

Biden ended his remarks to great applause, declaring, “We will be back.” Was he referring to an outward-looking America, or to a future Biden presidency? Many of those present hoped for both.

The rapturous applause following Biden’s appearance was markedly at odds with the awkward, stony silence that followed Pence’s address. The contrast was reminiscent of the early 2000s, when disillusioned transatlanticists took refuge in The West Wing, wherein the cerebral character of President Josiah Bartlet (played by Martin Sheen) stood in stark contrast to George W. Bush and his administration’s disingenuous brutality.

But such escapism yields only false hope. Rather than being lulled into complacency by Biden’s reassuring words, Europeans would be better off heeding Pence. Only by growing up, paying its way, and clarifying its goals can Europe repair the transatlantic relationship and ensure a healthy and durable partnership.

The fact is that Europeans and Americans have long lied to themselves and each other about the extent of their common interests and values. European and US strategic interests have been diverging at least since the end of the Cold War. America rescued a hapless Europe in the Balkan Wars of the 1990s. But by the time of the Kosovo War at the end of that decade, Europeans had begun to wake up to their responsibilities. In the 2008 Russo-Georgian War, and in the conflict in Ukraine since 2014, it was Europeans, not Americans, who led the diplomatic response and imposed the strongest sanctions on Russia.

Moreover, Europe is the only party ever to have mobilized in the name of collective defense under Article 5 of the NATO treaty. Following the terror attacks of September 11, 2001, Europeans sent forces to distant wars in the Middle East, over which they had little control.

In hindsight, it is clear that those wars destabilized Europe’s neighborhood and, eventually, Europe itself. America’s exclusive focus on counter-terrorism left war-torn Middle Eastern countries with fragile governments, or none at all. And in recent years, Europeans have increasingly borne the costs in the form of terrorism and influxes of refugees.

As for the US, many of its 320 million citizens no longer understand why they should have to protect 500 million Europeans, who live, after all, on a relatively peaceful and prosperous continent. They know that their country is in an escalating competition with China in the Indo-Pacific, and are thus shocked that Europeans would join the Chinese-led Asian Infrastructure Investment Bank. Ultimately, Europeans are left between a rock and a hard place. They, too, want to push China harder on trade and investment issues. But the best way to do that is through the World Trade Organization, which the Trump administration is actively undermining.

The divergence in values is no less pronounced. For their part, Europeans support international institutions, rules-based arrangements, and multilateralism generally. But America has always been ambivalent about treaties and institutions that might constrain its sovereignty or defy its objectives.

While Trump and Pence crudely state what today’s America wants, Biden is selling a vision of America that it no longer obtains. The US government does not have the American people’s consent to act on the world stage as it once did. While Americans still recognize the importance of sustaining US economic and military primacy vis-à-vis China, they appear to have rejected the elite consensus on trade, defense spending, and diplomacy.

The transatlantic partnership will always be Europe’s most important relationship. But it can last only if both sides take responsibility for their own affairs. The alliance would be immeasurably stronger if it were based on an honest assessment of each side’s interests and values, rather than on quaint illusions of fellow feeling.

Pence’s blunt speech in Munich may have been painful to hear; but one hopes that it will bring an end to European complacency and point the way to a renewal of transatlantic relations on realistic terms. If that turns out to be the case, Pence will have won the title of transatlantic hero – whether he wants it or not.

Mark Leonard is Director of the European Council on Foreign Relations.