The European Union has presented Cambodia with a new trade scheme called the “Everything But Arms” (EBA) trade clause. The European Union is waiting on an acceptance of the trade clause by Cambodia, and they have warned Cambodia that the clock is ticking on the offer. The scheme would allow for Cambodia to export all goods, excluding guns or weapons, at a reduced tariff rate.
As I read this article I do not understand why putting this trade scheme into effect is such a hard decision for Cambodia. They would benefit hugely on the economic scale and if they decline the scheme they are risking the possibility of losing a huge amount of jobs which would make their unemployment rate go up. This trade scheme favors Cambodia, and if they decline their economy would be losing $676 million. Another way that declining the “Everything But Arms” trade clause could harm Cambodia is that it would mean a lot of their 800,000 employees in the garment industry would have to be laid off. Not only does this mean a drastic increase in their unemployment rate, but the garment industry has been prone to protest in Cambodian history. Declining the EBA would put an economic hit on Cambodia, lay off a surplus on employees, and possibly spark a protest which could escalate and lead to something worse for the country. Because of these reasons I believe Cambodia should agree to the “Everything But Arms” trade clause, and I don’t think it should be a hard decision.