A threatened US-imposed quota on some Cambodian garment exports may start Jan 1, but a second round of textile negotiations has been scheduled, Commerce Minister Cham Prasidh said Monday.
Speaking shortly after returning from a first round of negotiations with US trade officials in Washington, Cham Prasidh said the two sides are still working on an agreement.
“We will exercise some restraint” in production, the country’s commercial chief said. He would not comment on the exact numbers or size of a possible quota.
US Embassy officials could not be reached for comment.
In October, the US called for quotas on three categories of garments following a sharp increase in exports that, according to a US State Department notice, “threatens to cause damage” to US manufacturing.
The next round of meetings is scheduled for Jan 19 in Phnom Penh, Cham Prasidh said. Don Johnson, the chief US textile negotiator, is scheduled to attend.
Cambodia had been given until Dec 21 to negotiate a quota with the US on cotton knit blouses, T-shirts and sweaters. Production in these three items has exploded in the past 12-months.
“[A quota] will affect definitely the Cambodian textile industry. The restraint will limit newcomers to Cambodian textile industry and probably will discourage manufacturers here,” said S I Van, head of the Garment Manufacturer’s Association.
Any quota could adversely affect the planned opening of 139 proposed new garment factories, worth about $180 million in investment, Cham Prasidh said.
“This is a huge amount of money for us,” he said.
Currently, the country’s 111 factories employ more than 72,000 workers. The additional approved factories could employ as many as 110,000 people, Cham Prasidh said.
In an effort to help negotiations, the minister said he would ask government officials to stop any new investment projects in garment manufacturing that have not already been approved.
A significant issue in trade negotiations is working conditions in domestic factories, Cham Prasidh said. Just last week, Calmette Hospital treated at least 25 garment factory workers for problems resulting from poor ventilation, the Khmer-language daily Island of Peace reported.
The Free Trade Union of Workers of the Kingdom of Cambodia released a statement on Friday listing a series of harsh working conditions laborers are currently experiencing. The document said workers at Natural (Cambodia) Garment Manufacturing Co regularly undergo physical and verbal abuse, forced overtime, denial of sick pay, fines for water or toilet breaks and delayed or cut salaries.
Cham Prasidh said he would form a committee to deal with the problems of working conditions and would personally take care of complaints.
A representative from the Free Trade Union scoffed at the Minister’s claims.
“He wants to save the face of the government, but in fact the government does not resolve the problems of the workers,” said Chea Vichea, one of the union’s representatives.
The head of the garment factories’ association claimed that bad labor practices are not prevalent in Cambodia and should not be used as a weapon in negotiations.
“Any industry will have its bad apples,” Van said. “We should not cut the tree when one apple is bad.”
The current absence of quotas coupled with special trade privileges such as Most Favored Nation status has made Cambodia a particularly attractive site for garment manufacturing.
A US quota of 1.2 million dozen cotton gloves was imposed last year and will be upheld.
(Additional reporting by Van Roeun)