OCAL garment manufacturers have begun exporting their products to Europe under
preferentially low tariff rates in a Gatt scheme designed to stimulate the
economies of under-developed countries.
The Generalized System of
Preferences scheme (GSP) was set up by the industrialized countries of Gatt to
allow qualifying Third-World countries to export any products at preferential
In a breakthrough for local exporters four clothing
manufacturers qualified for GSP treatment on April 29 said Mao Chan Samnom
deputy director of the GSPfocal point office. The office comes under the
jurisdiction of the Ministry of Commerce.
Samnom said they have since
exported $379,200 of garments and textiles at low tariff rates to France,
Germany, Austria , UK and Denmark.
He said: "Many traders in the country
do not realize they are entitled to export their goods at low tariff rates. The
government set up the GSP office in February to help exporters qualify for GSP
"Foreign countries in deciding their trade policies could either
subject trading partner's exports to General Tariff rates which are quite high,
Most Favored Nation (MFN) tariff rates which are lower, or GSP rates which are
lower again. Often under GSP exports are duty free.
"To date at least 26
countries have granted Cambodia GSP status including the EU , Japan,
Scandinavian countries, Russia, Canada and Australia."
Sou Kong, staff
member of the Supreme Garment Company which has exported $58,899 worth of
clothing under GSP since April, said: "Exporting under GSP has reduced tariff
rates on clothing by 40 percent. The export tariff rate was 35 percent, now it
is 21 percent."
Country Manager of June Textiles Lee Thai Keth said:
"Before using GSP export duty levels were very high. We did not export very
much. Now under GSP the tariff rates are very low enabling us to export many
textiles to Europe."
Samnom said: "June Textiles had exported $101,328
worth of goods to Europe between April 29 and June 11.
granted Cambodia GSP status many years ago, but we are not sure if they will
honor their commitments as we have never officially exported any products to
"Many other countries embargoed us during the period of Vietnamese
occupation and only granted us GSP status last year.
of the GSP office is to collect information from international organizations
which will enable potential exporters to know what tariff rates they will
"But we need more potential exporters to come to our office so we
can test the waters and find out if countries will honor their GSP commitments.
To date only four companies have exported under GSP."
Samnom, to qualify for GSP status exporters had to show their products were
produced solely in Cambodia and that no intermediary country had added value to
the product on the way to the final destination country.
He said it was
crucial potential exporters approach the GSP National office to obtain
certificates showing their goods are produced in Cambodia so that they can
qualify for the lower tariff rates.
Samnom sees great potential for the
country to export agricultural products to Europe and Japan under GSP schemes
and therefore avoid traditionally high tariff barriers in these
He said: "The country's potential exports under GSP include
rubber, rice, oxen and buffalo."
He said agricultural exporters
considering the Japanese markets would face GSP tariff rates of around 8 percent
depending on the product, and other goods such as beer could be exported duty
free. He said the GSP rates for the Japanese market were generally about 40
percent lower than MFN rates.
The two other companies who have exported
under GSP are M&V International Manufacturers company who have exported
$143,900 of textiles to Europe, and Gold kavimex who have exported $71,800 worth
The companies have also tried unsuccessfully to export to
the US and have expressed disappointment that the US has not granted Cambodia
The public affairs officer for the US embassy David Miller
said: "No exact date has been set for the US to sign an MFN agreement with
Cambodia. It relies on a number of things to be accomplished and it needs
negotiation between the two countries before an agreement can be reached."