A Cambodian naval officer salutes at the Ream Naval Base in a file photo. Image: Twitter

Washington’s announcement last week of a new arms embargo on Cambodia over its growing military ties with China is the latest symbolic punitive response to an ever-worsening downtrend in bilateral relations.

From Washington’s perspective, Prime Minister Hun Sen’s increasingly authoritarian government has not only choked political and human rights but has also become a Beijing lackey. The US believes Phnom Penh has secretly agreed Chinese troops may use its military bases.

From Phnom Penh’s perspective, the US has unfairly singled out Cambodia and has disseminated misinformation about a supposed secret deal to allow Chinese soldiers to station on Cambodian soil, which if true would violate the nation’s charter.

Cambodia also sees hypocrisy in America’s criticism and sanction considering Washington’s warm and growing ties with neighboring Vietnam, a more serial rights abuser but one with more contentious relations with China.

The US lifted its arms embargo on Vietnam in 2016 for obvious geopolitical reasons, while Washington has so far offered no demonstrative proof of a secret Cambodia-China military deal that would give Beijing access to its Ream Naval Base opening onto the Gulf of Thailand.

Chinese access to the base would potentially shift the balance of power in the contested South China Sea, where the US and China are at loggerheads, by giving Beijing a new southern flank to the maritime theater.

If there is no deal, Phnom Penh has intentionally stoked American paranoia on the issue while knowing fully well that dismantling the country’s democratic transition in 2017 and moving towards a one-party state would peeve Washington.

But the deterioration of relations since that year has so far been largely confined to the realm of words and gestures. Relatively low-lying Cambodian officials with few assets to protect in the US have been sanctioned. Some aid has been cut but China has quickly filled the gap.

Chinese President Xi Jinping (L) and Cambodian Prime Minister Hun Sen R) toast in Phnom Penh in a file photo. Photo: AFP / Tang Chhin Sothy

That could change, however, with the US saying last month that it plans to open a review of Cambodia’s place in a privileged trade scheme, which could significantly dent the nation’s bid to export its way to a post-Covid economic recovery.

The latest tit-for-tat started on December 7 when the US state and commerce departments announced an arms embargo that will restrict access to “defense articles and defense services” by Cambodia’s military and intelligence agencies.

“It’s [because of] the Cambodia-China military relationship and the US is deciding that Cambodia has been naughty, so lumps of coal for Christmas!” said Sophal Ear, associate dean and associate professor in the Thunderbird School of Global Management at Arizona State University.

Hun Sen, in power since 1985, reacted as expected by angrily dismissing the latest US measures. “This demonstrates the wisdom of the decision I made in 1994 when I elected not to change our weapons systems over to US models,” he stated on December 10, according to local media translations.

“I’ve also issued an order to all units of the armed forces to immediately review the weapons and military equipment that Cambodia currently possesses and to put all US-made hardware, if any, into storage or simply smash it to pieces,” he added.

Ou Virak, president of the Phnom Penh-based Future Forum think tank, called the arms embargo a “symbolic move.” Indeed, it won’t have any practical impact because Cambodia hasn’t procured US munitions or military equipment in decades.

According to the database of the Stockholm International Peace Research Institute (SIPRI), Cambodia last took delivery of munition orders from the US since 1973.

In more recent history, Cambodia has relied on other sources for its military hardware, mostly from Eastern European countries and China.

According to the SIPRI database, China has made five separate munitions and military equipment deliveries to Cambodia since the turn of the century. The largest appears to be the provision of 12 AS365/AS565 Panther Helicopters in 2013, which Cambodia paid for through a US$195 million loan from Beijing.

Frosty since the end of Cambodia’s civil war in the 1990s, US-Cambodia relations deteriorated further throughout the 2010s as Phnom Penh swung towards China, a shift that won rich aid and assistance grants and allowed Phnom Penh to reduce its dependence on Western aid.

In early 2017, Cambodia’s government announced a suspension of regular joint military exercises with the US and instead began drilling with Chinese troops.

Relations deteriorated further after the forced dissolution of Cambodia’s only viable opposition party in late 2017, which paved the way for Hun Sen’s ruling Cambodian People’s Party (CPP) to win all parliamentary seats at the 2018 general election.

The US extended a rapprochement olive branch when it dispatched a new ambassador, W Patrick Murphy, to Phnom Penh in mid-2019 but those diplomatic efforts appear to have largely failed.

US Ambassador to Cambodia W Patrick Murphy at a press event in Phnom Penh in 2017. Photo: Twitter

Much depends on US accusations that Cambodia plans to allow Chinese troops to be stationed on its soil, a claim its government strenuously denies but which would significantly alter security dynamics in the Indo-Pacific.

The Wall Street Journal, citing US sources, reported in July 2019 on a secret agreement to allow China use of the Ream Naval Base for 30 years, which Cambodia has denied.

Before 2019, US officials alleged a similar deal had been struck to allow Chinese troops to be based at the Dara Sakor “tourism” development in Koh Kong province, a site being constructed by the Chinese Union Development Group, which was sanctioned by the US in 2020.

Earlier this year, Cambodia began tearing down relatively newly-built, US-funded facilities at the Ream Naval Base with the apparent excuse that they needed repair.

US concerns were then heightened when it became known that Chinese firms had been selected to refurbish the base, while Phnom Penh rejected US offers to assist.

Following a visit to Phnom Penh in June this year by US Deputy Secretary of State Wendy Sherman, Cambodia’s government said that US embassy officials would be allowed to tour the naval base. But defense attaché Marcus Ferrara cut short his visit later that month after he was denied access to several parts of the base.

This month, Hun Sen banned US officials from visiting the base altogether. This came after two senior Cambodian naval officials – including navy chief Tea Vinh, the brother of Defense Minister Tea Banh – were sanctioned by the US for apparent corruption involving contracts to redevelop the base.

Ou Virak reckons the arms embargo will “further isolate Cambodia and push Cambodia further into China’s orbit. The US might believe Cambodia is lost,” he added. “If that’s the case, we are starting to see the next phase of punishing Cambodia as a warning shot to others.”

Hun Sen likely saw it as “a warning message to the next generation of Cambodians who lead the government,” he said.

Days before Washington imposed the embargo, Hun Sen gave his clearest statement yet that he wants his eldest son, military chief Hun Manet, to eventually succeed him as prime minister.

Hun Manet, the son of Cambodian leader Hun Sen, is widely speculated to become prime minister when his father steps aside. Image: Facebook

The expected succession of Hun Manet, who was educated at America’s elite West Point military college, raises the importance of the military within the ruling CPP.  

Washington may also have wanted to send a message to Cambodia’s neighbors, especially since Phnom Penh recently took over the rotating chair of the Association of Southeast Asian Nations (ASEAN) bloc for 2022.

Other ASEAN states, especially those who lean towards the US, won’t want Phnom Penh’s deteriorating relations with Washington to impact the ASEAN agenda for next year.

It is believed that US President Joe Biden could meet Hun Sen early next year at a special in-person US-ASEAN summit that Washington recently proposed.

Speaking last week, Hun Sen said he plans to “co-chair” the event with Biden in February, with the Cambodian premier adding that he wants it postponed from Biden’s preferred date in January because he is “busy” that month.

For all of this, Washington’s pressure on Phnom Penh doesn’t appear to be working.

Analysts reckon that only two moves would force Hun Sen’s government to sit up and take notice: either sanctioning the prime minister’s inner circle – the people who would be under pressure if their assets in the US are frozen – or removing Cambodia’s trade privileges.

Last month, on the same day that Washington sanctioned the two Cambodian naval officials, it also announced a review of Cambodia’s place in the Generalized System of Preferences (GSP), a trade scheme that grants zero-tariff privileges to imports from designated developing countries.

Cambodian exports to the US grew to $6.6 billion in 2020, up 23% from 2019, making it Cambodia’s largest export market. The removal of even a portion of Cambodia’s trade privileges with the US would imperil hopes of an export-driven economic recovery.

Although Cambodia’s most profitable export goods, garment and footwear products, aren’t included in America’s GSP, it is believed that the privileged trade scheme accounts for around one-third (US$2 million in 2020) of Cambodian exports to the US.

A garment shop is displayed along a street in Phnom Penh, Cambodia July 5, 2017. Photo: Agencies

In mid-2020, the European Union partially removed some of Cambodia’s trade privileges after a two-year review over human rights abuses. However, it is difficult to gauge whether the 35% decline in Cambodian garment and footwear exports to the EU last year was the result of new tariffs or the pandemic.

On the one hand, GSP reviews can take several years to complete. Recent US reviews for Thailand and Indonesia didn’t return a decision for almost 24 months. Then-US president Donald Trump terminated India’s designation in March 2019, eleven months after a review began.

Moreover, the US would likely find it difficult to remove GSP privileges because a recipient country is perceived as too closely aligned with a geopolitical adversary. Instead, any GSP review would need to be conducted over human and worker rights issues.

Nonetheless, the threat alone of losing GSP privileges would significantly impact investment in Cambodia. The arms embargo is thus likely a symbolic shot across the bow of what could be worse to come without a change in behavior.