Employment figures in the garment industry are rebounding after the initial losses
that followed the end of a long-standing quota agreement with the United States in
Between 265,000 and 268,000 workers are currently employed in the sector, after the
loss of approximately 25,000 jobs between January and May, said Ken Loo, secretary
general of the Garment Manufacturers Association of Cambodia (GMAC).
The rally in the garment industry comes after the US Department of Commerce's move
in May to limit the increase of Chinese textile imports to 7.5% a year. That move
was followed in June by the signing of a European Union Memorandum of Understanding
that limits China's textile imports to between 8 and 12.5 percent.
Chinese imports have surged by as much as 1,000 percent for some textiles, prompting
the US and Europe to invoke a provision made when China joined the WTO in 2001 that
allows them to impose limits to prevent "market disrupting" booms until
the end of 2008.
"The Cambodian garment industry is still very reactive to what happens outside
Cambodia," Loo said. "The quotas put in place by the US and Europe of course
helped the industry [in Cambodia] greatly."
"We cannot project what will happen in 2008, because it is too far away,"
Loo said , "We do strategic planning for three years tops."
Ros Harvey, who heads the factory monitoring project of the International Labour
Office, also expressed optimism at the state of the industry.
"Cambodia has performed particularly well since the end of the quotas,"
said Harvey, "A lot of people predicted a mass reduction in the number of factories
Next week, delegates from the Ministry of Commerce and GMAC will travel to Washington
to continue lobbying for a trade agreement that would grant Cambodia and 14 other
developing countries duty-free access to the US market.
Cambodia currently pays a 17 percent duty on exports to the US, a market that accounts
for approximately two-thirds of all garment-related trade.
The Tariff Relief Assistance for a Developing Economy (TRADE) bill has already been
introduced in both the US Senate and the House of Representatives. It has been modeled
after the Africa Growth and Opportunity Act (AGOA), which provides special access
to textile and clothing imports from lesser-developed countries in Sub-Saharan Africa.
"We are hopeful to get duty-free access to the US market," said Loo. "What
the Washington trip will do is lay the groundwork for the future of the Cambodian
"If the bill is passed, we will definitely see an increase in the number of
factories that come to Cambodia, and I would not be surprised if the number of factories
doubles," he said.