Government and garment industry officials plan to travel to Washington next month to lobby for duty-free access to the US market, Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said Monday.
Minister of Commerce Cham Prasidh will lead the delegation, which will travel to the US during the second week of September, Loo said. GMAC has hired a lobbying firm that is working to set up appointments with US congressmen and various trade associations.
“Duty-free access to the US is critical,” Loo said. “Because we are labor compliant, that is more incentive to give us duty-free access.”
Zero or reduced tariffs to the US would provide a significant advantage to the garment industry, which will be forced to compete on a level playing field with garment-producing giants China, India and Pakistan when garment quotas expire for World Trade Organization members at the end of this year.
Garment producers paid
16 percent to 34 percent tariffs on the nearly $1 billion in goods it sold to the US last year. To US buyers, garments from Cambodia would be significantly cheaper without the tariffs.
Though US Embassy spokesman David Gainer declined to comment Monday on a possible tariff reduction, US State Department official Robert Hagen said in June that Cambodia should not expect one.
“It’s highly unlikely we would consider a tariff reduction,” Hagen said at the time.
GMAC officials, however, are hoping the US will extend to Cambodia the same duty-free privileges it has given to the garment industries in more than
10 impoverished African nations. In July, US President George W Bush signed a bill that extends preferential tariff treatment for those African countries to 2015.
The recent signing of the African trade bill “is a boost to our chances,” Loo said Monday.
Other garment industry observers were more skeptical, arguing that many poor garment-producing nations in South America and other parts of the globe will face the same steep competition in a post-quota world and would benefit from preferential access to the US market.
“Why Cambodia?,” asked one industry observer. “Duty-free market access would be a huge advantage worth arguably more than the quota system.”
In addition, he said, the timing of the US trip may be unfortunate.
“It seems to me the worst possible timing given that the trip will come in the run-up to one of the most pivotal [US] elections in recent history,” the observer said. “I suspect they’ll have a hard time finding someone to pay attention to them.”
Contacted Thursday, Cham Prasidh declined to comment.
The government and the garment industry hope to brand the nation as one that respects labor rights, in the hopes of attracting socially conscious buyers. But as the elimination of garment quotas quickly approaches, the government’s focus has shifted to trimming costs and increasing worker productivity, which ranks among the lowest in Asia.
On Friday, Prime Minister Hun Sen said the government must be “proactive” in order to retain and expand the garment industry. He outlined a stream of anti-corruption measures aimed at reducing the cost and time associated with importing and exporting goods.
Though Hun Sen has railed against corruption in the past with little result—in 1999 he threatened to fire any customs officials caught taking bribes—garment factory managers generally welcomed the speech.
“If he meant what he said, it helps level the playing field,” said Adrian Ross, general manager of New Island Clothing.
Another factory manager, speaking on condition of anonymity, said the premier’s speech was great, but wondered if the government was able to implement the reforms. “As we have learned, if the government wants to ban logging, nobody cuts trees for one or two days,” he said. “But after a week, the order is useless.”
