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US senators call for GSP trade privilege cut

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US Senator Ted Cruz (left) speaks while flanked by Senator Chris Coons during a Judiciary Subcommittee hearing on the Affordable Care Act on Capitol Hill in 2015 in Washington, DC. MARK WILSON/GETTY IMAGES/AFP

US senators call for GSP trade privilege cut

Two US senators on Wednesday introduced the Cambodian Trade Act of 2019 bill, requiring the administration to re-examine Cambodia’s eligibility to access the preferential trade treatment granted by the US under the General System of Preferences (GSP).

A Cambodian government spokesman said the move was nothing to worry about, while a representative of the Kingdom’s garment industry said the call to re-evaluate Cambodia’s GSP status is wrong as it misrepresents the progress made in working conditions.

The joint release by US senators Ted Cruz and Chris Coons on Wednesday said Cambodia should not enjoy special trade privileges as it undermines democracy, ignores labour standards, disregards human rights and fails to protect intellectual property.

The release added that during his 34-year reign, Cambodia’s Prime Minister Hun Sen has shown disdain for the rule of law and basic freedoms.

“I question whether Cambodia should have preferential access to US markets,” said Coons.

According to the release, Hun Sen has exploited preferential treatment afforded to Cambodia by the US and Europe and has failed to meet basic labour rights standards, undermined the integrity of national elections and tilted towards China.

“The Cambodian Trade Act aims to hold him and his government accountable for this behaviour and reinforces the steps our European partners are taking,” it read.

Spokesperson for the US embassy in Cambodia Emily Zeeberg was not available for comment on Thursday.

The bill will take some time to become law and will need to undergo several procedures.

After its introduction, it will either be accepted or rejected by a committee before going through the senate. It will also need to go through congress debates and win approval from the US president.

The US is among Cambodia’s biggest export markets after the European bloc and currently enjoys some trade privileges offered by the US under the GSP.

But according to the Garment Manufacturers Association in Cambodia deputy secretary-general Kang Monica, the GSP privileges are often quite limited in practice.

He said the US has granted GSP privileges to Cambodia for 85 per cent of customs tariff lines, but most Cambodian products exported to the US market – such as garment and footwear – are among the 15 per cent that are required to pay customs tax.

It was only after July 2016, when the US government reviewed the GSP’s tariff list to Cambodia, that the Kingdom could export goods to the US market duty free, he said.

Regardless, Monica said the senators’ proposal to re-examine Cambodia’s eligibility for preferential trade was unfair and failed to recognise the progress the Kingdom’s labour sector had made.

According to Monica, the Kingdom’s working conditions have vastly improved as workers now enjoy annual wage increases with benefits. In addition to wage increases, he said workers are now able to get social security funds, including occupational hazard insurance, health insurance and pension funds.

“Their assessment that Cambodia failed to meet the basic labour rights standards we think is very unfair. It doesn’t reflect the reality on the ground,” he said.

He added that since a 2001 agreement with the US, the Kingdom has implemented a labour condition improvement-linked trade policy, which brought about the implementation of the International Labour Organisation’s (ILO) Better Factories Cambodia (BFC) monitoring programme.

“The ILO is a specialised arm of the UN working on ensuring working conditions and, according to BFC’s regular reports, the situation has continuously improved. If Cambodia failed to meet basic labour rights standards, how is the existence of ILO-BFC justified?"

“I believe that the majority of US senators will provide justice for Cambodia by providing an assessment based on the actual work that Cambodia has done in improving working conditions and workers’ rights,” he said.

Government spokesman Phay Siphan on Thursday said the government will not take an interest in the issue, saying the government always considers human rights a priority.

“Warning the Kingdom is just to show the senators’ muscles. But, for Cambodia it is nothing to worry about at all."

“The policy of the [US] president, who holds executive power, is to never follow a small group of senators. I think the US president clearly understands [the situation] as he need as all the nations of the world as [friends],” he said.

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