EU Mulls Withdrawing Trade Preferences for Myanmar and Cambodia, Given Rights Concerns

8 November 2018

The European Commission said last week that it is mulling the temporary removal of trade preferences to Myanmar, and is preparing to remove Cambodia’s preferences, citing urgent concerns over both countries’ compliance with fundamental, international human and labour rights conventions. 

Myanmar and Cambodia are both beneficiaries of duty and quota-free access to the EU market through “Everything But Arms” (EBA) agreement of the Generalised Scheme of Preferences (GSP). 

Under the EBA scheme, least developed countries can sell any products, with the exception of arms and ammunition, to the EU market without facing tariffs or quotas. That access comes with conditions, however, namely that those countries must fulfil their obligations under international conventions on human and labour rights, such as those set out by various UN accords and International Labour Organisation (ILO) conventions. 

Should the EU find significant violations of these conditions, there is the option of temporarily lifting these trade preferences until the situation improves. 

EU fact-checking mission finds human rights violations in Myanmar

At the end of August, UN investigators published a detailed report which found a host of human rights violations by the Myanmar military against the Rohingya, a stateless Muslim minority group. The findings included forced labour and evictions, sexual violence, forced disappearances, killings, and a host of other examples of “extreme violence.”  

“The horrors inflicted on Rohingya men, women, and children during the August 2017 operations, including their indiscriminate killing, rise to the level of both war crimes and crimes against humanity,” said Radhika Coomaraswamy, one of the members of the UN mission conducting the probe. 

The August 2017 “operations” refers to “clearance operations” that UN investigators say involved mass killings of Rohingya individuals. 

Myanmar's government has criticised the findings, arguing that the UN investigation is "flawed, biased, and politically motivated,” and laying the blame for the violence itself on " terrorists," according to comments reported by local media. 

Following the UN report, the EU sent its own fact-finding mission to Myanmar from 28-31 October, with European officials publicly expressing their own concerns over the situations in Myanmar’s Rakhine, Kachin, and Shan states. 

“Our trade policy is value-based. These are not just words. We have to act when there are severe violations,” the EU’s Trade Commissioner Cecilia Malmström said in early October, prior to the fact-finding mission. After the 28-31 October review, her office issued a statement where she said that Brussels “now expects Myanmar to address the severe shortcomings that have been highlighted during this monitoring mission.” 

Should the problems continue, she warned that Myanmar’s government would ultimately be “putting their country's tariff-free access to the EU market in danger – a scheme which has proved to be vital for the economic and social development of the country, providing thousands of jobs to workers in sectors such as textiles, agriculture, and fisheries.” 

Meanwhile, the New York-based group Human Rights Watch (HRW) called on the governments of Myanmar and Bangladesh to suspend an effort to return Rohingya refugees to Rakhine state. “Myanmar’s government keeps talking about returns, but it has done nothing to allay the Rohingya’s fears of being returned to the same violence and oppression they fled,” said Bill Frelick, who serves as HRW’s refugee rights director, in a statement issued on 2 November. 

Malmström warns Cambodia on “blatant disregard” for key values

Cambodia is also at significant risk of losing EBA access, given the various human rights concerns involving the government of Hun Sen, who was re-elected as prime minister earlier this year. Hun Sen has spent decades in office, and under his tenure independent media outlets have closed, opposition parties have been dissolved by the courts, and labour and human rights violations have been reported as rampant. 

Shortly after the July elections, Malmström informed Cambodia that the EU would be kick-starting a review process of the country’s EBA eligibility. 

“In Cambodia, meanwhile, we are seeing very troubling developments with a clear deterioration of human rights and labour rights, without convincing improvements in sight,” she wrote in a blog post on the European Commission’s website last month. 

Malmström referred to the findings of the recent EU mission to the Southeast Asian nation, citing “serious and systemic violations of, for instance, freedom of expression, labour rights and freedom of association.” 

At the time, she confirmed that the EU’s executive arm has informed the Cambodian government that it will be “launching the process for the withdrawal of their Everything But Arms preferences,” and that this process will be fulfilled unless there are “clear and evident improvements on the ground.” 

Some experts and business associations warn that the temporary withdrawal of trade preferences for Myanmar and Cambodia could have significant economic ramifications, given the EU’s role as a significant export market, including job losses in the textile sector and reduced inflows of foreign direct investment. 

ICTSD reporting; “Myanmar rejects UN findings in Rohingya genocide report,” AL JAZEERA, 29 August 2018; “Asian MPs urge halt to Rohingya repatriation plan amid safety fears,” REUTERS, 2 November 2018; “EU considers sanctions on Myanmar over Rohingya crackdown,” AL JAZEERA, 2 November 2018.

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