EU-China Limits on Garment Exports To Benefit Cambodia

A deal announced Friday be­tween China and the European Union to limit China’s surging garment and textile exports to Europe will likely have positive effects for Cambodia, the Garment Manu­fac­t­ur­ers Association said Sunday.

The deal reportedly limiting the growth of Chinese exports at 12.5 percent annually until 2008, averts an imposition of emergency safeguards permitted under World Trade Organization rules.

If those safeguards had been put in place, they would have al­lowed the EU to limit export growth to 7.5 percent annually.

“The effects will be the same as the safeguards,” GMAC Secretary-General Ken Loo said Friday, noting that buyers, seeking to avoid be­ing penalized by the new growth limits on Chinese products, will be drawn to Cambodian pro­du­cers.

“We expect that we will be seeing more orders coming in,” Loo said.

Until January, Cambodia benefited from a worldwide quota system in the garment trade which encouraged factories to relocate here in order to avoid limits on Chi­na, India and other exporters.

Since the system ended, Chi­nese exports have surged in the US and EU—as high as 1,500 percent over last year in some categories.

Faced with the massive surge in imports, the US unilaterally im­posed limits on Chinese garments in select categories last month.

“I believe the overall settlement of­­fers a fair deal for China while giving respite and much needed breath­­ing space to textile industries in Eur­ope and developing countries,” EU trade chief Peter Man­del­son said of the agreement in a statement.

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