New US Quotas a Boon to Garment Industry

A decision by the US Depart­ment of Commerce to impose safeguard quotas on certain garments manufactured in China will likely have a positive impact on Cambodia, Garment Manufac­turers Association Secretary-Gen­eral Ken Loo said Tuesday.

Garment exports to the US from China have increased drama­­­tically since January when the Multi-Fiber Agreement expired and World Trade Organi­za­tion mem­bers dropped all quotas on garments. Chinese exports to the US of cotton shirts and blouses surged 1,276 percent from Janu­ary to March and trousers rose 1,573 percent.

On Friday the US announced that it was imposing a 7.5-percent yearly increase in quotas on three categories of garments imported from China: Cotton knit shirts and blouses, cotton trousers, and cotton and man-made fiber un­der­wear. The US argues that its do­mestic market is being “disrupted” by the Chinese imports.

Though China has decried the moves, saying it violated the te­nets of free trade that underlie the WTO, Ken Loo said the effects are likely to be positive for Cambodia.

“I think this will signal to buyers that more safeguards [quotas] are to come from the US, and we believe many [companies] will reposition their orders…back into Cambodia,” Loo said.

“The shirts and trousers decision…about 75 percent of our factories fall into that category. So it will have a major impact,” Loo said.

“We have also heard that several Chinese factories are now considering leaving China so we hope to be able to attract them,” he added.

Since January, Cambodia has lost about 30,000 garment jobs if suspended factories are assumed likely to close, Loo said.

Ten thousand jobs have officially been lost, 6,000 to 7,000 created and 26,000 workers have been suspended since the start of the year. The garment industry em­ploys about 200,000 mostly fe­male workers and constitutes about 85 percent of all Cambo­dian exports.

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