The Cambodian Textile and Garment Association once again warned that if Cambodia loses its EBA tax-free preferential trade status with the EU, it is estimated that at least 90,000 people will lose their jobs. The Cambodian garment industry has created more than 700,000 jobs for local people, most of which are female employees.
According to Lu Qijian, secretary-general of the association, Cambodia’s annual textile exports to Europe total about US$5 billion, and the first half of 2019 has declined compared with the previous year. He said that the garment industry has seen the negative impact of losing EBA’s preferential tax-free trade treatment for export to the EU. If the EU decides to revoke EBA for Cambodia, the Cambodian people will face a lack of employment opportunities in 2020.
In addition, some investment companies, including H&M, have stated that if Cambodia loses EBA, they will prepare to move to China or Indonesia. During this challenging period, even companies with good brands are struggling to cope with market shocks, as tariff costs range from approximately 12-15%. Although the overall export volume of the textile and garment industry increased in the first half of 2019, the surge in imported textile raw materials offset the profits earned by the textile and garment industry.
