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Cambodia-Europe (Credit EuBulletin.com)

The EUs Values Based Foreign Policy – the Case of Cambodia

By Antti Tulonen

8 March 2020

In February, the EU partially withdrew the tariff preferences for Cambodia under its ‘Everything but Arms’ (EBA) trading scheme due to systematic human rights violations. The Commission had deliberated the withdrawal for a year after Cambodia’s Prime Minister of the last 35 years, Hun Sen, banned the only viable opposition party in the country and prosecuted its leadership. The economic consequences for Cambodia as the largest beneficiary of EBA are predicted to be dire – approximately a 3% reduction of GDP growth according to the IMF. To the ire of Cambodia, the EU barely reacted when the Thailand banned a major opposition party and rewarded the authoritarian regime in Vietnam with an FTA. There were widespread charges of EU hypocrisy and inconsistency. But arguably there is a strategic calculus behind the EU’s application of sanctions for human rights violations that can be distilled from its recent actions.

Considering the origins of the Cambodia’s current predicament in dissolution (and prosecution) of a political party, the reaction of the EU to the decision of Thailand’s Constitutional Court dissolving the Future Forward opposition party, and banning 16 of its leaders from politics for 10 years, is of particular interest. While the EU press release deemed the act “a set-back for political pluralism” in Thailand, it also re-iterated the EU Foreign Affairs Council conclusion from October 2019 that the EU stands ready to broaden its engagement, including in democratic pluralism, in preparation for future partnership and free trade agreements.

It can be argued that even with its short-comings, Thai democracy is relatively far removed from Cambodia’s. For example, the 2019 Economist Democracy Index assessed Thailand as a ‘flawed democracy’ and Cambodia as an ‘authoritarian regime’. Perhaps where Cambodia’s repressive actions broke the camel’s back, the camel for Thailand is only under severe strain. The EU can reason that it can amplify its voice in human rights dialogue by becoming a closer and more important partner – with the ever possible suspension of its trade and other agreements in its toolbox as an ultimate resort.

Nonetheless, the EU is also perfectly willing to deepen its engagement with regimes as authoritarian as Cambodia, as was demonstrated by the European Parliament (EP) approval of the EU-Vietnam Free Trade Agreement (EVFTA) just after Cambodia was withdrawn from the EBA. While Cambodian democracy is near the bottom of the ranking for Asia, Vietnam has been the one country consistently beneath it. There is no real opposition and journalists and human rights activists are routinely prosecuted.

What then differentiates Vietnam from Cambodia to the extent that the former is rewarded and the latter punished? First, compared to the EUs trade with Vietnam (its 2nd largest trading partner in ASEAN) its trade with Cambodia, even under the EBA, is at best marginal. Moreover, the little trade that there is, is vastly more beneficial to Cambodia than it is to the EU and is effectively subsidized by European tax payers. This imbalance ensures that the EU’s action both is impactful to Cambodia and essentially without a price tag for the European economy.

Second, strategically Cambodia’s has strongly aligned itself into the Chinese sphere of influence in its external relations. While the EU is not out to punish Beijing's allies, it has less common interests to consider. For example, both Thailand and Vietnam have joined the EU in efforts to bolster the rules based international order (in opposition to China’s efforts to re-cast it). Vietnam’s chairmanship of ASEAN for 2020 enhances its importance. Such considerations should only gain more weight if the EU’s newly self-proclaimed ‘geopolitical Commission’ is going to live up to its title.

Third, Cambodia was unwilling to meet even the EU’s relatively low human rights concerns. The EU would have been satisfied with the return to the 2017 status quo before Hun Sen’s political purge, which had also been democratic in name only. In the lead up to the EVFTA, Vietnam committed to a timetable demanded by the EP to abolish forced labor and to allow for freedom of association for independent trade unions. Though it remains to be seen if Vietnam will follow through, it is progressing where Cambodia is decidedly regressing.

What emerges is a three-fold calculus that takes account of economic interests, strategic interests and a country's willingness to at least maintain its human rights situation or show promise of progress. On these terms, perhaps two other countries in ASEAN should take particular note of the EU’s Cambodia decision: Laos and Myanmar. Both countries are nearly identical to Cambodia in their trade position towards the EU under EBA scheme. Laos is already under the Chinese orbit and Myanmar is again increasingly so as the Rohingya crisis continues to isolate it internationally. Were the Laos government to squash its limited opposition and Myanmar’s military to take back its full control of the government, the EU would probably act consistently with its decision on Cambodia and withdraw them from EBA. The EU has also refused to open trade talks with the Philippines because of President’s Duterte stance on human rights.

These examples show the difficulties of seeking to operate a values based foreign policy, even for a geopolitical Commission.