The US government will not likely give Cambodia the full 14- percent bonus quota on garment exports for next year, a disappointed Commerce Minister Cham Prasidh said this week upon returning from trade negotiations in the US.
“We discussed the 14-percent special quota, but the US had not decided how much they would give us,” Cham Prasidh said Monday. “They will give us some, but not all.”
The bonus, which would be on top of a scheduled 6-percent annual increase in the quota, is considered a key to further growth of Cambodia’s leading industry. A bilateral agreement signed last January called for the bonus to be based on performance of labor standards.
Both the Cambodian government and garment makers had hoped the US would pledge the full bonus when Cham Prasidh met US counterpart Charlene Barshefsky in the city of Seattle at last week’s historic World Trade Organization meeting.
But instead, the US asked poor countries including Cambodia to pay more attention to labor rights and the environment. “The US and European countries may reject our products if they think we don’t respect labor rights,” Cham Prasidh said.
The garment industry is by far and away the leading industry in Cambodia, accounting for 95 percent of a projected $500 million worth of exports this year. About three- quarters of the trade volume is to the US, according to the Commerce Ministry.
He En Jia, vice president of the Garment Manufacturers Association in Cambodia, said manufacturers hoped to get the full bonus, and that the bonus is important to helping manufacturers stay in Cambodia.
He said some investors left after the quota was imposed early this year.
“The US government might consider Cambodia’s labor condition is not good enough, but Cambodia’s labor law is better than other developing countries and we all try to respect the law,” he insisted.
However, labor advocates said a partial bonus is a good idea.
“We have seen some progress in improving labor conditions, but there are still major problems in enforcement of the labor law,” said Katja Hemmerich, adviser to the Free Trade Union of the Kingdom of Cambodia. She said a partial bonus means manufacturers will be motivated to make more of an effort to improve labor conditions.
According to the treaty, the US government was to determine by Dec 1 if it would give Cambodia the bonus quota.
US Embassy officials said reports have been sent to Washington on a regular basis, but the embassy didn’t say why a final decision has yet to be made.
Cham Prasidh pledged to continue fighting to receive the full bonus. “We want to have nothing but all,” he said.