New draft legislation was introduced last week into the US House of Representatives to offer garment exporters in least developed countries, including Cambodia, limited duty-free access to the US market.
Unlike a previous bill in 2007, however, the draft law does not create special duty-free categories for exports from Cambodia and Bangladesh and lays heavy emphasis on African textile exporters, whose supporters in Washington have actively opposed special treatment for Cambodia.
Brought before the lower chamber of the US legislature on Nov 18, the New Partnership for Trade Development Act would allow duty-free entry for an amount of Cambodian garment exports equal to half of what was exported to the US in 2007.
Before last year’s economic collapse, 70 percent of Cambodia’s garments went to the US. At that level, the draft legislation would allow 35 percent of Cambodian textile exports to enter the US without being subject to import duties.
Both the 2007 bill and the draft introduced last week were proposed by Congressman Jim McDermott, a Democrat from the US state of Washington.
In testimony before US lawmakers on Nov 17, Commerce Minister Cham Prasidh said Cambodia was facing an “unprecedented crisis” and that, without some measure of duty-free access, Cambodia’s apparel industry would be jeopardized.
The US is Cambodia’s largest garment export market, buying $2.4 billion in apparel last year, and the source of the lion’s share of Cambodia’s foreign exchange earnings.
Exports to the US have decreased by nearly 30 since Western economies suffered a recession and financial crisis last year.
Ken Loo, secretary-general of the Garment Manufacturer’s Association of Cambodia, said Sunday that, as a percentage of export value, Cambodia pays higher duties to the US than France.
Cambodia paid nearly $400 million to the US in 2008, he said, adding that US lawmakers should not fear that allowing Cambodia greater access to the US would mean denying it to others.
“The pie gets bigger. It’s possible that everybody gets a bigger share,” he said.