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Garment exports increase 24%

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Garment workers on sewing machines at a factory in Takhmao town, Kandal province. Scott Howes

Garment exports increase 24%

Cambodia's garment and footwear exports last year increased 24 per cent in 2017 as the global economy performed well, driving demand higher in export destinations, according to a National Bank of Cambodia (NBC) report.

The NBC’s 2018 report said the Kingdom’s garments and footwear exports were valued at $10 billion, up 24 per cent from $8 billion in 2017. The growth rate in 2017 was just 7.6 per cent.

“The growth in the export of garment and footwear products is driven by the global economy performing better, especially in main export destinations such as the EU, which bought 46 per cent of Cambodia’s total garment and footwear exports last year, the US [24 per cent], Canada [nine per cent] and Japan [eight per cent],” the report said.

Neither NBC officials nor Garment Manufacturers Association in Cambodia representatives could be reached for further details.

Cambodian Labour Confederation president Ath Thorn on Tuesday said the 24 per cent growth rate for apparel products exports was a huge increase, adding that he doubts the figure reflects reality.

Thorn said travel goods exports, which the Kingdom has obtained with duty-free export status from the US since July 2016, accelerated remarkably and could be a major factor in last year’s sped up growth in garment and footwear exports.

However, he remains sceptical of the reported high growth rate.

“As we observe, the exported amount and the demand of labour for the sector is not increasing as much as the growth rate [given by NBC],” he said.

“The number of workers [in the sector] did not jump significantly, overtime work was also not much and there were also some factories that closed. So, the sector’s exports should not be that big. It makes more sense that it grew at a similar pace as previous years.”

The value of apparel exports last year accounted for 74 per cent of the Kingdom’s total exports. The sector employs about 800,000 workers. The Cambodian garment sector benefits from the EU’s Everything But Arms trade preferential treatment, but this may be removed this year.

The bloc warned last October that Cambodia would lose its EBA status to penalise the government’s apparent move away from democracy.

Earlier this month, two US senators also introduced the Cambodian Trade Act of 2019 bill, requiring the administration to re-examine Cambodia’s eligibility to access the preferential trade treatment granted by the US under the Generalised System of Preferences.

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