Cambodia has until Jan 1, 2005, to chisel out a reputation as a haven for high-stand garment factories who follow ethical work practices—or the country’s most valuable industry is unlikely to survive, a US government official warned on Friday.
In 2005, an agreement will expire which since the mid-1990s has allowed Cambodia’s garment sector access to the lucrative US market, and fostered growth in what has now become the country’s largest industry, one worth around $1.3 billion annually.
But in a little more than 18 months, Cambodia will be forced to compete directly with mammoth producers such as China. Only 10 of some 50 garment-producing nations in the world are expected to remain in the business after the 2005 deadline, George White, director of the US State Department’s Officer of International Labor Affairs, told a press conference in Phnom Penh.
“The world market for textiles will change significantly,” he said.
“Most of the  countries are going to be subjected to severe competition from China,” said White, adding that Cambodia cannot compete in terms of cost or access to a large and skilled labor force.
Promoting Cambodia as a “safe haven” for high-standard factories with good labor conditions could help the country overcome the looming competition for the US market, said White noting that not all brand names are necessarily looking for the lowest costs alone.
Labor conditions have steadily improved in the garment sector and the country has the necessary laws to protect worker’s rights, but some factory are not complying with those laws, White said.
“We still are seeing cases where factories arbitrarily fire union leaders in violation of the law,” said White adding that some factories were also not complying with wage laws.
To tap the niche market of “socially conscious buyers” the government and garment manufacture must work to enforce labor laws, ensure correct payment to workers, and end anti-union activities.
“High brand names will search for countries where the production will not embarrass the company,” said White, adding “this is an avenue for Cambodia to retain its competitive edge.”