The European Union has been reviewing Cambodia’s trade privileges due to concerns about human rights situation in the Southeast Asian country. The garment industry is the largest employer in Cambodia, generating $7bn for the economy each year, and the EU accounts for more than one-third of the country’s total exports, including garments, footwear and bicycles. Amid pressure from the EU over Cambodia’s human rights and political record, the government on Friday (20 September) raised legal minimum wage, starting from early 2020, for workers in its crucial textiles and footwear industry to $190 per month, an increase of 4.4 percent.
Being Cambodia’s largest employer, the garment industry faces uncertainty after the EU in February began an 18-month consideration that could suspend the country’s special trade preferences. Cambodia benefits from the EU’s ‘Everything But Arms’ (EBA) trade program, which allows the world’s least-developed countries to export most goods to the EU free of duties. Pav Sina, president of the Collective Union Movement of Workers, noted that though the new hike fell short of their $195 demand, after a representative vote, unions would accept it. “Even though this figure is not what we wanted as our position, it is positive, as Cambodia is in the midst of uncertainties of the trade preferences,” Sina said, adding that “if our wage goes higher than countries in the region, we will also suffer.”
The re-examination of the European preferences – EBA trade program – began after the arrest of opposition leader Kem Sokha and the dissolution of his party, which allowed the longtime Prime Minister Hun Sen’s party’s take full control of all seats in parliament. Ken Loo, Secretary-General at the Garment Manufacturers Association of Cambodia (GMAC), noted that employers accepted the new minimum wage but were concerned about rising pay but added that “we are always worried … we are always concerned about rising wages, but we also understand that we just have to go up in line with inflation and other factors.”
