By Prak Chan Thul
PHNOM PENH (Reuters) - Cambodian Prime Minister Hun Sen told his ministers to ease pressure on labor union leaders on Wednesday, after threats by the European Union to remove the Southeast Asian country's duty-free trading access.
The EU began a formal procedure last month to strip Cambodia of its "Everything but Arms (EBA)" initiative, following a July general election that returned Hun Sen to power after 33 years in office and gave his party all parliamentary seats.
In a speech to 20,000 factory workers on Wednesday, Hun Sen urged his ministries of justice and labor to speed up or drop any pending court cases against union leaders.
"Cases that should be handled, handle them quickly. Cases that are not being handled, drop them, finish them, so that those union leaders don't feel like hostages," Hun Sen said.
"This will open up some freedom space for the unions," he said. "Let's make reconciliation and understanding of each other a priority."
Hun Sen did not refer to the EU threat to remove trade preferences.
The world's largest trading bloc has launched a six-month review of Cambodia's duty-free access, meaning its garments, sugar and other exports could face tariffs within 12 months, under EU rules.
Representatives from major apparel and footwear companies, including Adidas (DE:ADSGN) , New Balance, Nike (NYSE:NKE) , Puma , Under Armour, and VF Corporation (NYSE:VFC), met Cambodian government ministers on Oct. 19.
The companies urged the government to drop what are widely seen as politically motivated criminal charges against trade unionists.
"The prime minister has made a step toward honoring human rights obligations under the EBA agreement with the EU while wooing workers' support for his rule," said political analyst Lao Mong Hay said.
The repercussions of any EU sanctions on Cambodian garments could devastate an export industry which accounts for about 40 percent of the country's gross domestic product (GDP).
Ath Thon, the president of the Coalition of Cambodian Apparel Workers' Democratic Union, who has 7 pending lawsuits against him and another 50 against his colleagues over labor strikes, said he welcomed Hun Sen's comments.
"Let's wait and see how they will resolve this," Ath Thon told Reuters.
"It could be that, firstly, the election is over and the situation is better so they want to solve problems and, secondly, that they want to respond to what development partners want."