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Cambodia: 90,000 jobs loses expected on suspension of trade preferences

The European Chamber of Commerce estimates that 90,000 jobs in Cambodia would be at risk if the EU suspends its special trade preferences over Cambodia’s record on democracy and human rights. The garment industry is Cambodia’s largest employer and generates $7 billion annually, but it faces uncertainty after the European Union (EU) this year began a process that could see tariffs reintroduced next August.

European companies would “pull out of production” in Cambodia if trade preferences ended, while the head of production at Sweden’s H&M warned of a “substantial backlash”. Workers who lose their jobs - mainly women - would likely end up in the entertainment or service industries, at bars and massage parlours, and be exposed to sexual exploitation. The alternative would be migrating to Thailand where two million Cambodians are estimated to work, many of them undocumented and vulnerable to modern-day slavery. 

Cambodia benefits from the EU’s “Everything But Arms” (EBA) trade programme, which allows the world’s least-developed nations to export most goods to the EU free of duties. The bloc is Cambodia’s largest trading partner, accounting for 45 per cent of its exports in 2018. Clothing factories in the country employ 700,000 workers, and garments make up a large share of exports to the EU, worth about $5.5 billion.