The importance of Germany as a trading partner with Cambodia increased in 2005, officials said Thursday, as Germany became the second largest buyer of Cambodian exports after the US.
“In past years, the second country was Holland, France or Italy, but in 2005, it was Germany,” said Thon Virak, the deputy director of the Ministry of Commerce’s foreign trade department. “Trade with Germany keeps increasing every year,” he added.
According to government data, exports to Germany now comprise 12 percent to 15 percent of Cambodia’s $2 billion in exports. In 2005, $250 million of mostly garments and footwear were sent to Germany, a 5.5 percent increase over the $237 million in 2004. Only $155 million in exports were shipped in 2003.
Germany’s Ambassador Pius Fischer credited good labor standards with increasing the interest of German consumers in Cambodian goods. He also warned that a worsening of the political situation in Cambodia could also negatively affect the nation’s good image.
“I have visited factories producing for Germany and they are very well organized and I think they have relatively high labor standards,” Fischer said.
“Labor standards, and of course the general political environment in Cambodia, are of the utmost importance for the image of trading partners in the EU and the United States and they should always be kept in mind,” he said.
Fischer acknowledged that increasing trade has not prompted German companies to invest in Cambodia.
“Corruption is a major obstacle and important cost factor,” he said.
“If there is a dispute, you have to have the possibility to go to court to get [your] rights.”
While 4.7 million pairs of shoes were exported to Germany in 2005 from Cambodia, Fischer said products like cashew nuts, organic rice and mangos also hold major potential.
Cambodia has preferential tariff access to the EU under the so-called “Everything but Arms” agreement.