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News Analysis: GMAC lawsuit opens old wounds for unknown benefits

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The decision by the Garment Manufacturers Association of Cambodia (GMAC) to file a lawsuit against the European Commission (EC) has reignited the ongoing struggle between Cambodia and the European Union (EU) to promote bilateral trade and uphold a political agenda.

The lawsuit was filed despite the industry stating, because of the current economic climate of COVID-19, whatever the outcome, it would be largely symbolic and have very little impact on the manufacturing industry now.

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It added, in light of other challenges facing the economy, the partial withdrawal of the Everything but Arms (EBA) trade deal is comparably small.  Cambodia and the EU now need to move forward and to talk to each other as partners using innovative solutions to grow trade and investment with and from the EU and from European companies that will benefit Cambodia.

Speaking to Khmer Times about the lawsuit Kaing Monika, deputy secretary-general of GMAC, said that this was its last recourse, the last-ditch effort to protect the interest of its members. In the EU, nobody is above the law, including the EC.

About 400 garment, footwear and travel goods factories in Cambodia have suspended their operations, leaving more than 150,000 workers jobless in July because of the COVID-19 pandemic.

This led the government to announce extended support measures to aid the garment and textile industry, tourism and aviation sectors until the end of the year, according to a statement released this week.

According to the Official Journal of the EU published in September, GMAC filed the complaint on July 16 and stated that the commission had “allegedly failed to properly assess the proportionality of the partial temporary withdrawal of customs preferences for the Cambodian garments, footwear and travel goods sectors… alleging a violation of GMAC’s procedural rights due to the commission’s failure to provide adequate reasoning corresponding to a violation of the right to good administration”.

Monika added there is no clear timeframe for a hearing yet because the case is still in its early stages. The court process is moving as per the procedure.

“We just don’t know what the court decision will be, but we hope for the best. It’s the legal right of GMAC to do so to protect our members’ interests. GMAC is an interested party because our members’ interests are affected,” he said.

“We can take a case to the court if we feel that we have not been treated in a legally fair manner,” he added.

The lawsuit has also re-highlighted the long-running feud between the European Union and its pro-business arm, the European Chamber of Commerce in Cambodia (EuroCham) which was strongly against the EBA decision.

At the time of its original investigation to remove the benefits, EuroCham’s previous Cambodian Chairman Arnaud Darc released a statement saying: “As the main representative of the large European investment and business community in Cambodia, EuroCham is deeply concerned about the possible negative consequences of this decision on current and future business between the European Union and Cambodia.

The launch of [the] EBA withdrawal investigation by the European Commission
is counterproductive to Cambodia’s socio-economic transformation. This decision not only jeopardises the past and future achievements of this partnership, but also other development initiatives funded by the European Union over the last two decades which have helped to vastly improve the socio-economic status of millions of Cambodians.”

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Article Source:Khmer time