Exports to the US grew 26 per cent in the first half of this year, despite tensions over the Kingdom’s July 29 national elections.
This stands in stark contrast to last year when export growth to the US was in single digits.
The latest trade data from the US government said goods from Cambodia brought in between January and June totalled $1.72 billion – representing a 26 per cent growth over last year’s 4.5 per cent compared to the first half of 2016.
The figures also noted that the US exported $214 million worth of goods to the Kingdom.
Supreme National Economic Council senior adviser Mey Kalyan said the first half achievement is a positive move that will strengthen the country’s export capacity.
He pointed out that, despite political tensions in the past year between the two nations, efforts were still being made to boost economic ties.
“It shows that the poor political climate has not contributed to any negative impact on trade,” he said.
The vast majority of Cambodia’s exports to the US were garment and footwear products. The export of Cambodian-made travel goods to the US recently showed a huge increase as many items qualified for duty-free status in July of 2016.
While the export of travel goods like suitcases and handbags from Cambodia to the US was valued at about $50 million per annum before 2016, in the first half of this year it totalled $160 million.
However, some have speculated that export performance could take a hit in the second half of the year.
There are worries that the US could review its preferential tariff agreement with Cambodia as the world’s largest consumer market has already described the July 29 poll as unfair.
Nevertheless, Kiang Monika, deputy secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), said with stability after the election, there is optimism for further export growth.
“I am less worried about the political situation, and more worried about the wage increases and provisions over mandated worker pay. The productivity growth rate is lagging behind the rate of wage increases,” he said.
“We need to work properly on wage policies, otherwise it could erode our competitiveness. We are contracted manufacturers, so labour costs are our main component,” he said.
Monika said Cambodia’s garment exports in the first six months of this year saw a growth rate of 14 per cent. He said this was truly amazing after years of stagnation and explained that orders were increasingly coming out of China.
Chap Sotharith, research director of the Cambodian Institute for Cooperation and Peace (CICP), speculated that future exports from Cambodia to the US would stay positive.
“In terms of trade, the US won’t make any decisions that hurt Cambodia’s performance,” he said, acknowledging that the Kingdom would suffer without trade privileges.