Minister of Commerce Cham Prasidh predicted Thursday that a US war with Iraq could boost Cambodia’s garment industry because the US would be unwilling to buy goods from Muslim countries with large garment sectors.
In the wake of the Sept 11 terror attacks on the US, Cambodian manufacturers saw a shift in orders coming from countries with large Muslim populations, as buyers feared unrest would disrupt production.
A US-Iraqi war could produce similar shifts, Cham Prasidh said.
Yet despite this, Cambodia still needs to make vast improvements to its garment industry if it is going to remain competitive once import restrictions between World Trade Organization members are lifted in 2005 and the country loses exclusive access to large Western markets, officials said Thursday.
An international agreement allowing the special quotas and access to the lucrative US market expires in 2005, after which garments and textile imports will be governed by WTO rules.
Cham Prasidh said he expected Cambodia to enter the WTO next year, so by the end of 2004 the country should be equipped to function in a quota-free world.
“To get success and reach these markets, we need to increase quality, delivery and design” if Cambodia is to compete with countries like India and Bangladesh, he said.
Garment Manufacturers Association of Cambodia President Van Sou Ieng said Thursday that the unit price for textiles is high because of high electricity, water, telephone and transportation rates. “To lower costs and make our factories able to sell goods at lower prices to compete with other countries, the government will need to reduce taxes on the garment industry,” he said.
