The E.U. on Tuesday sent the Cambodian government its preliminary report on the possible suspension of duty-free trade over political and human rights concerns, the bloc said in a statement.
“The aim of the procedure is to address the human rights and labour rights concerns in Cambodia,” the statement said.
“While the European Union remains committed to working with the Cambodian authorities on this aim, real and credible improvement on the issues of concern is needed in order to avoid the withdrawal of EBA preferences.”
The report contains the E.U.’s findings from its six-month investigation, which began in February. The statement noted that duty-free trade under the “Everything But Arms” (EBA) deal can be suspended over “serious and systematic” violations of labor and human rights.
Cambodia has one month to respond to the E.U.’s preliminary report. A final decision is due in February.
The EBA review followed the dissolution of the main opposition CNRP in 2017 and a national election in July last year that saw the ruling CPP win all 125 seats in the National Assembly. Dozens of radio stations were shuttered, two journalists put in jail and civil society organizations accused of being part of a plot to foment a “color revolution” in the country around that time.
“Over the last eighteen months, we have seen the deterioration of democracy, respect for human rights and the rule of law in Cambodia,” European Commission vice president Federica Mogherini said in the E.U.’s announcement of the review in February.
The E.U. is Cambodia’s largest export market, and exports to the bloc totaled 5.3 billion euros (about $5.8 billion) in 2018, with 95 percent of the trade happening under the EBA scheme, according to E.U. figures. Three-quarters of the exports were garments.
The World Bank has estimated that a suspension of the EBA could cost the country up to $654 million in exports.
