PHNOM PENH: Chinese President Xi Jinping has reassured Cambodia that China will continue to support its economy despite a potential Everything but Arms (EBA) agreement suspension by the European Union.
Xi’s assurance came during Prime Minister Hun Sen’s visit to China to show support for the fight against the coronavirus outbreak.
According to a government official, Xi said that he knew Cambodia was being pressured by the EU over the EBA, and that Cambodia should not bow to them.
The Khmer Times quoted government official Kao Kim Hourn who said that Hun Sen requested Xi to lend support to Cambodia by encouraging Chinese investors to keep their garment factories in the country.
“I would like to ask our friend (China) to continue to support Chinese investors running businesses in Cambodia, even if the country loses its EBA status,” he said, quoting Hun Sen.
“I would like to ask our friend to open their Chinese market for more Cambodian products.”
Cambodian imports under the EBA accounted for 18 per cent of all imports coming into the EU market under the scheme last year.
The imports, which included clothes and textile products, were worth about US$6 billion in 2018.
The EBA scheme allowed Cambodian goods to enter the EU market 99 per cent tariff free.
The loss of the EBA is predicted to cost Cambodia millions of dollars and risk the jobs of 800,000 workers in the garment and textile manufacturing sector.
The EU will decide Cambodia’s preferential EBA trade status next week.
The EBA has been under review following the dissolution of the opposition Cambodia National Rescue Party (CNRP) and the arrest of its leader Kem Sokha over treason charges in 2017.
“Depending on developments in the country, the commission has to decide by February this year whether or not to suspend Cambodia’s EBA privileges fully or in part. A suspension will come into effect six months later, by August,” a European Parliament report said.
“The Cambodian authorities have made some concessions. In 2018, several political prisoners were released, including opposition leader Kem Sokha.”
It acknowledged that over 100 remaining senior members of the CNRP party were offered a chance to apply for authorisation to resume their political activities.
Sokha has been in court since Jan 15 over treason charges, and the trial is expected to last three months.
Hun Sen said that Cambodia would not compromise its sovereignty and independence to retain the EBA status.
Cambodia is also on the verge of signing a free trade agreement with China.
In December, both countries launched their first FTA consultation.
Xi also urged Hun Sen to look after the investment atmosphere to encourage Chinese investors to stay in Cambodia.
He said Cambodia needed to look after Chinese factory owners and businessmen so they continued investing, and he also wanted Cambodia to study how Chinese companies were going to be affected by the EBA withdrawal.