European Companies Ask EU to Postpone EBA Withdrawal

AKP Phnom Penh, April 08, 2020 —

The European Branded Clothing Alliance has asked the European Union (EU) to postpone withdrawing tariff preferences granted to Cambodia under the EU’s Everything But Arms (EBA) trade scheme.

In a letter to European Commission President Ursula von der Leyen last week, alliance president Ignacio Sierra Armas said the COVID-19 pandemic had “created challenges unprecedented in our globalised world.”

Closures of retail clothing stores for uncertain periods in a growing number of countries are “severely impacting … developments, jobs and growth,” he said.

Sierra requested seven support measures from the EU and member countries “to enhance certainty and allow us to keep on supporting our employees in the EU, as well as the workers in the manufacturing countries.”

The measures include a request to the EU to “postpone the withdrawal of the EBA status of Cambodia due to the exceptional circumstances and already severely impacted global industry.”

The European Commission decided to withdraw part of its preferences for Cambodia on Feb. 12, claiming “systematic violations” of human rights.

The withdrawal would affect selected garment and footwear products as well as all travel goods and sugar. It represents about €1 billion or one-fifth of Cambodia’s annual exports to the EU.

Unless the European Parliament and the council object, the withdrawal will take effect on Aug. 12.

Sierra said sales in the EU’s branded clothing sector had already dropped by about 90 percent as a result of disruptions caused by COVID-19.

A similar percentage of employees are now being supported financially by their employers, in addition to state support, to avoid losing their jobs.

“Such a sharp decline in sales has an inevitable impact on orders,” Sierra said.

He said Bangladesh had estimated lost orders at €1.5 billion, affecting 1.2 million workers. But unemployment among workers employed both by clothing brands and suppliers could swell to 4.1 million.

The letter noted that the clothing industry had led to “massive job creation and capital investments” in manufacturing countries.

“As production and exports of clothing have increased, poverty rates have declined,” it said, adding that branded clothing companies had also undertaken social and environmental initiatives.

“The road to recovery will be lengthy,” Sierra warned.

“In the meantime, we as branded clothing companies wish to contribute where possible in this crisis by using our sourcing and manufacturing capacity and supply chain to produce personal protective equipment and use global networks to deliver them to hospitals as soon as possible.”

Based in Brussels, the clothing alliance represents more than 60 retail clothing brands. It aims to ensure a “positive trade agenda and a more predictable business environment” as well as sustainable global value chains.

By Sao Da