Logo of Phnom Penh Post newspaper Phnom Penh Post - Duty-free agreements worry minister

Duty-free agreements worry minister

Duty-free agreements worry minister

7 gament factory worker

Duty-free agreements between regional competitors and foreign importers would put the Cambodian garment industry at risk, Commerce Minister Cham Prasidh said last week.

Speaking to reporters after a meeting, Prasidh warned that the Kingdom’s garment sector would not be able to maintain its competitive edge over the industries of neighbours such as Vietnam and Myanmar should those countries implement free-trade agreements with the US, EU and regional trade partners.

“The big risk for us is that I start to see Vietnam negotiating a free-trade area with the US, and Vietnam will push garment products entering the US to be duty-free, while Cambodian garment products are still charged,” Prasidh said.

“Investors in the Cambodian garment industry would move into Vietnam; it is a big risk and a big challenge.”

According to Prasidh, the EU and US have recently engaged in talks with the Myanmar government about instituting a trade agreement similar to the “Anything But Arms” initiative under which Cambodian imports to the EU are duty- and quota-free.

Myanmar’s garment industry is at an advantage to Cambodia’s, Prasidh said, as it enjoys cheaper electricity costs and encounters fewer strikes and protests.

Tran Tu, trade attaché for the Vietnam Trade Office in Cambodia, said that as far as he knows, Vietnam and the US have no plans to institute a bilateral free-trade area. “But Australia, Malaysia, Peru, the US and Vietnam are preparing to join the Trans-Pacific Strategic Economic Partnership Agreement,” he told the Post.

Van Sou Ieng, president of the Garment Manufactures Association in Cambodia, also claimed that Cambodia’s frequent strikes and protests were a risk to its garment industry.

“If Vietnam negotiated [with the US] successfully, investors will move to Vietnam because the Cambodian garment sector would lose its image,” he said.

But with Cambodia’s garment exports still on the rise – hitting $1.3 billion in the first quarter of the year, up 16 per cent from the corresponding period last year – Kang Chandararot, executive director of the Economics Unit of the Cambodia Institute of Development Study, said Cambodia needs to look at more long-term measures of the industry’s strength, including workers’ welfare, factory conditions and minimum wage.

“If Cambodia wants long-term investment, it needs to discuss the conditions. If some investors go out, others will come to discuss on the conditions,” he said.

MOST VIEWED

  • EU parliament’s 13-point vote to decide on possible sanctions

    The European Parliament is due to vote on Thursday on a 13-point resolution on Cambodia – which includes a call for the treason charges against bailed opposition leader Kem Sokha to be dropped – a threat that could see the EU enforce a range of sanctions against

  • Government hits back at threats to pull EBA, suspend UN seat

    The spokesman for the ruling Cambodian People’s Party (CPP) has said the government is in no way concerned after the European Parliament gave it three months to reverse what it called the “systematic repression of the political opposition”. Ignoring the ultimatum could mean facing

  • Chinese influx pushing locals, Westerners out of Preah Sihanouk

    Some within the Kingdom’s tourism industry have speculated that the recent influx of Chinese visitors may hinder domestic tourism as the price of accommodations in the coastal city of Sihanoukville continues to rise. Preah Sihanouk province, which has become a hotbed for Chinese investment

  • Sar Kheng: Sokha requested security

    Interior Minister Sar Kheng on Sunday revealed the story behind the transfer of former opposition party leader Kem Sokha from Trapaing Phlong prison in Tbong Khmum province to his house in the capital. Speaking at the ruling Cambodian People’s Party (CPP) headquarters in Prey