The Kingdom’s total goods exports to the US, the world’s largest economy in nominal terms, sharply increased in the first quarter of the year to attain nearly $1.863 billion, even amid production stoppages and other Covid woes.
This was 16.84 per cent higher than the $1.594 billion in merchandise exports logged in January-March 2020, according to the latest data from the US Census Bureau.
The Kingdom imported $106 million worth of goods from the US during the period, booking a 25 per cent increase over $85 million in the first quarter of 2020.
Bilateral trade increased by more than 17 per cent from $1.679 billion to $1.969 billion, and the trade surplus widened by over 16 per cent from $1.509 billion to $1.757 billion.
Garment Manufacturers Association in Cambodia secretary-general Ken Loo acknowledged that the US is the main buyer of Cambodian garments, textiles and travel goods. “Last year the US market was our biggest export market – which [accounted for] approximately 40 per cent of our exports.”
With the US yet to reauthorise its General System of Preferences (GSP) trade-benefits programme following its December 31 lapse, Loo pointed out import duties have applied to all travel goods shipments entering the US from Cambodia.
“The US GSP has expired and we are waiting for its renewal. While garments and shoes are not part of the US GSP scheme, travel goods benefit from the GSP scheme,” he said. “But since this applies to all other countries, it has not had a big impact.”
Speaking at the Cambodia Franchise Expo on May 5, US ambassador Patrick Murphy said trade and investment flows between the US and the Kingdom are increasing.
He said that more US companies are arriving in the Kingdom each year, bringing with them what he said were ethical business practices, high labour and environmental standards, and strong corporate social responsibility programmes that connect with local communities.
American Chamber of Commerce in Cambodia (AmCham) president Anthony Galliano said the rise of trade between the two countries was “great news”.
He told The Post on May 17 that with the US recovering faster from the Covid-19 pandemic than countries in the EU, US trade with the bloc has been adversely impacted by the expiration of the GSP.
Consumer spending accounts for more than two-thirds of US economic activity, which grew by “a phenomenal” 10.7 per cent in the first quarter of this year, he said. This translated into increased purchases of Cambodian knit apparel, leather products, woven apparel, footwear and furniture, he added.
“The bilateral trade relationship is greatly increasing in importance, especially for the Kingdom as this is one of the few bright spots.
“Cambodia can only further benefit from a flourishing trade and investment relationship, as the US is the largest importer of Cambodian goods, and the premier position is expected to only widen from the rest of the field,” Galliano said.
The US embassy in Phnom Penh and AmCham are undertaking a four-point strategic approach to ramp up US business and investment into the Kingdom. A Joint Working Plan (JWP) was signed to this end on April 2 between Murphy and Galliano.
Galliano added that the JWP’s objectives are to support US companies trading with and investing in Cambodia, strengthening the Kingdom’s business climate, and advancing US-Cambodia economic ties.
“Although only recently signed, there has been concrete action in pursuing these goals – the Cambodia Franchise Expo is a prime example of progress. AmCham fully embraces the JWP and is honoured to work with the US embassy to achieve these ambitions with our full support,” he said.
Cambodian exports to the US were to the tune of $6.5777 billion in 2020, up by 22.79 per cent from the $5.3568 billion posted in 2019, while imports clocked in at $343.6 million, down by 33.15 per cent from $514 million, according to data from the US Census Bureau.
In 2019, the Kingdom was the US’ 100th largest goods export market and its 44th largest supplier of goods imports, the bureau reported.