Charles Dunst is an associate at LSE IDEAS, the London School of Economics’ foreign policy think tank.
LONDON — As Britain uncouples from the European Union, one potential blind spot threatens to spoil Brussels’ ability to flex its trade muscles on a global scale.
Earlier this month, the European Commission withdrew parts of the European Union’s Everything But Arms (EBA) trade preferences for Cambodia, citing deteriorating human rights under Prime Minister Hun Sen’s government, which has dissolved the main opposition party, closed independent media outlets and pursued criminal cases against scores of political rivals, journalists and activists.
But Europe’s ability to pressure Sen into undoing some of his repressive policies is contingent on the cooperation of a recently departed member: the United Kingdom. That’s no longer something it can take for granted.
Cambodia says the recently Brexited Britain promised Sen to continue offering Phnom Penh preferential trade privileges after the Brexit transition period, during which the U.K. is required to enforce EU trade policy.
The bite of the EU measures is likely to inflame frustration with Sen, whose message of stability is wearing thin among younger Cambodians.
The U.K. has not yet reached a decision on continuing its preferential trade status after the transition, British officials say. But if London eventually opts to not follow Brussels’ lead, it will seriously blunt the EU’s ability to confront Cambodia — and other transgressors — on human rights.
The EU’s partial suspension — which affects goods that account for €1 billion or 20 percent of Cambodian exports to the bloc and goes into effect in August 2020 — will cost the Southeast Asian nation approximately €100 million in tariffs. The move will ultimately make Cambodian products less competitive in European markets. A significant number of Cambodian workers will lose their jobs.
The goal is that the pain of these measures will convince the Cambodian government to comply with Everything But Arms’ relatively minimal human rights requirements — namely the reinstatement of the opposition party and the dropping of charges against its leader.
It’s likely to be a major blow to Cambodia.
While older people often credit the Cambodian leader, who has been power for over 35 years, with delivering Cambodia from the Khmer Rouge period, young people blame him for the state of the economy, lagging development, corruption, skyrocketing household debt, resentment at an influx of Chinese investment and a lack of jobs.
The bite of the EU measures is likely to inflame frustration with Sen, whose message of stability is wearing thin among younger Cambodians, and will threaten Sen’s ability to control the country’s elites, some of whom are increasingly concerned that Cambodia is too estranged from the West and too reliant on China.
But amid these concerns, some Cambodian officials, including the prime minister, believe Boris Johnson’s Britain will be an economic lifeline. “We want to see the U.K. leaving the EU,” Sen said last year. “After its departure, the U.K.’s economy will remain strong and the country will continue to import Cambodian goods.”
Regime-friendly press outlets continue to push the narrative of increased U.K.-Cambodia trade, despite British claims of indecision. As Lim Heng, the vice president of Cambodia’s Chamber of Commerce, recently said: “Britain previously pledged to Cambodian leaders that even if it leaves the EU, it will continue to further strengthen and increase its trade volume with Cambodia.” (A regime-friendly Cambodian newspaper in early 2020 claimed that “the U.K. is the biggest importer of producer [sic] from Cambodia, with Germany coming second.”)
British trade with Cambodia has indeed been vital to Phnom Penh. In the first three quarters of 2019, the U.K. was Cambodia’s fifth-largest market, and its second-largest in Europe, after Germany. In 2018, their bilateral trade reached $1 billion.
If Global Britain were to choose to retain its trade preferences for Cambodia, the move would soften the blow of the EU’s sanctions and give Sen a much-needed — if undeserved — boost.
If the U.K. decides to put trade over human rights, the move could benefit other offenders
Perhaps more worryingly for the EU, it would also undermine Brussels’ ability to affect positive change by leveraging and revoking trade preferences.
As long as the U.K. was a part of the EU, it had to toe the Brussels line on trade preferences. In a post-Brexit world, “unshackled” from European constraints, the U.K. can more freely define — and either promote or demote — Everything But Arms and other preferential trade agreements, as well as human rights more generally.
If the U.K. decides to put trade over human rights, the move could benefit other offenders, such as Myanmar, Laos, Chad, Rwanda and Uganda, which currently benefit from trade preferences.
As Europe tries to enforce freedom guarantees in Cambodia and elsewhere, No. 10 is primed, if it so chooses, to play spoiler.