How to Promote Human Rights through Apparel Sourcing and Trade?

Debate on Terminating Cambodia’s Eligibility for EU’s Everything But Arms Program

Sheng Lu

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781350197046.009
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Abstract

This case study describes a high-profile debate on whether the European Union (EU) should terminate Cambodia’s eligibility for the EU Everything But Arms (EBA) program. In February 2020, the EU formally announced it would partially suspend Cambodia’s eligibility for the EBA program due to growing concerns about Cambodia’s human rights records. Losing EBA benefits would mean apparel exports from Cambodia to the EU would lose their duty-free market access and be subject to the regular tariff rate ranging from 10 percent to 30 percent. This would be a significant hit to the vulnerable Cambodian apparel factories and workers, which are already competing hard with giant competitors such as China, Vietnam, and Bangladesh in the EU market. Notably, close to 70 percent of Cambodia’s exports in 2019 were apparel items and almost half of them went to the EU, its single largest export market. Some argue that it makes no sense to continue to “reward” Cambodia through the EBA program given their reported human rights abuses. However, it is also of concern that a deteriorated economy due to reduced apparel exports to the EU could make it even more challenging to improve human rights in the country. On the other hand, it is debatable whether trade policies such as tariffs and preferential market access should be used as tools to address human rights issues at all, which are often about a country’s sovereign rights. EU policymakers are in a tough spot to take balanced actions.


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