The European Commission launched withdrawal procedures last year over Cambodia’s “severe and systematic” violations of human and labour rights. The European Parliament and Council could overturn this decision before the August enforcement deadline if the bodies object.

Cambodia’s Foreign Affairs Ministry issued a statement late on Wednesday calling the EBA withdrawal “unjust” and “politically driven”. One of the issues involved in the decision was a ban on an opposition party accused by the authorities of attempting to overthrow the government.

The Cambodian government, a de facto one-party state headed by Prime Minister Hun Sen, has waged a war against opposition voices after the dissolved Cambodian National Rescue Party (CNRP) made significant progress in 2017, clamping down on independent media outlets and arresting and trying CNRP leader Kem Sokha.

During the EU’s year-long investigation, unions and workers warned that the loss of EBA would leave garment workers jobless and potentially have a large impact on some of Cambodia’s other export enterprises, including bicycle manufacturing and agriculture.

But some workers noted that working conditions were worsening regardless of EU market access.

Ouk Sokly, 30, bought a tuk-tuk after he was given three-month notice from Zhong Hua Printing Company, because he believed he would not get a job anywhere else, as leader of the factory’s chapter of the Cambodian Alliance of Trade Unions (CATU). He had brought an arbitration case against his employer over pay issues.

In his rented room a two-minute drive from his former workplace in Phnom Penh’s Tuol Sangke commune, Sokly pulled out spreadsheets showing his calculations for the amount of seniority pay he should have received from the factory.

Zhong Hua offered him about US$275 in seniority indemnity pay, instead of the more than US$700 he should have received according to his calculations. Sokly said workers, especially those in hard-to-trace subcontracted factories, are frequently subjected to unfair practices in the workplace.

“Workers from other factories told me their hours are being reduced,” Sokly said, noting that some factories had cut two hours off workers’ shifts, likely due to fewer orders.

The country’s minimum wage for garment workers has increased by 90 per cent since 2015, and coupled with requirements to cover more benefits, employers are concerned about growing production costs.

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At the same time the Commission announced sanctions on Cambodia, the European Parliament approved a free-trade agreement with Vietnam, where wages range from US$132 to US$190 depending on region. If businesses in Cambodia do not adapt to the higher cost to sell, they might move across the border to Vietnam.

Sarosh Kuruvilla, a professor of industrial relations, Asian studies and public affairs at Cornell University in the US, said that even if production or import costs rise, some companies will remain in Cambodia because of an already established relationship in the country.

“Not all brands are going to move for a few cents increase in price, but some will,” Kuruvill said. “There will be some impact [on the garment industry], but not as high as the newspaper reports that I have been reading.”

Chinese companies, in particular, have political reasons to stay.

Raymond Tam, the vice-president of overseas investment for Hong Kong-based company Justin Allen, a Marks & Spencer manufacturer, said his business would be strained by the decision to remove EBA benefits, and lower wage costs did prompt his company to open its new factory in Hue, Vietnam over Cambodia.

But as director of the Hong Kong Business Association in Cambodia, he predicts that Chinese-based companies will maintain investments in Cambodia, prioritising the tight relationship between the two nations over higher costs of production.

“Cambodia is the most stable country in the whole Southeast Asia region because Cambodia is very related to China in politics,” Tam said. “That’s why I can imagine a lot of investment [continuing], particularly from China.”

Khun Tharo, programme coordinator for the labour group advocacy group Central, said the government would have to make simple changes to political party, NGO and union, and freedom of association laws to become compliant again with international human rights standards, which would improve labour rights too.

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“When there’s still no progress on civil rights, we’re not going to have any progress [for unions],” he said.

The EU’s repeal of some EBA benefits is meant to target the Cambodian government’s treatment of civil society, opposition voices and labour unions, but Georgios Altintzis, policy officer for the International Trade Union Confederation, noted that Cambodian workers would bear the brunt of the punishment, directly losing jobs and potentially being forced to adapt to new working conditions.

“It’s not that easy to take women who worked in garment factories and re-educate over a month to make them work in construction,” he said.

Nin Mom, 47, spent nearly 20 years pressing prints onto clothes for Zhong Hua Printing Company. She developed eye issues, possibly related to daily chemical exposure in the factory, and now works as a cleaner in a supermarket.

But while her new hours are shorter and more regulated, she would prefer a factory job, where she could make more than the US$200 per month she does now.

“In the factory, we had overtime and benefits that raised our salary,” she said. “That’s all gone now.”

Additional reporting by Sineat Yon