This publication aims to determine who benefits from trade in the case of Cambodia. The authors examine how trade regimes have affected working conditions and socioeconomic development in Cambodia.
Cambodia is deeply integrated in the global economy and this has led to some positive effects: the garment and footwear industry have fueled the export-led growth of the country; poverty has been reduced and employment and wages have been increasing. Yet, inequality is still high in Cambodia, and the country ranks low in terms of the Human Development Index. In terms of workers’ rights, recently, widespread violations of labour standards have been reported. In addition, violations of freedom of association and collective bargaining rights are common.
Looking at the economy as a whole, without any substantial economic upgrading, investment in technology or diversification, Cambodia remains stuck at the end of the global value chain, vulnerable due to its strong export dependence. Even though foreign investments have been essential to build the strong garment and footwear industry, multinational companies (MNC) benefit from tax breaks and most of the profits do not remain in the country. Common references to price pressure by MNCs underline the global power asymmetries and imbalances in profit.
Following this analysis, the authors conclude their findings with policy recommendations on how to create a better distribution of the benefits of trade and how to avoid the negative effects it has been having on workers and producing countries so far.
This study is part of a series of papers on trade and labour standards that have been published under the FES in Asia project “Core Labour Standards Plus” (CLS+).
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