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Garment industry fortunes ride on disaster bill

Garment industry fortunes ride on disaster bill

As leaders gather in Phnom Penh for the trade-focused World Bank conference,

garment lobbyists are celebrating a US legislative breakthrough triggered by

December's tsunami.

The natural disaster has helped build momentum in

Washington for a dormant bill that would grant Cambodia and 14 other developing

countries - some affected by the tsunami - selective duty-free access to

American markets.

The bill, recently introduced in the US Senate, covers

textile imports to America. The American market makes up 70 percent of Cambodian

garment exports, said Van Sou Ieng, president of the Garment Manufacturers

Association in Cambodia. Manufacturers now pay around a 16 percent tariff on

goods destined for the United States.

"It's absolutely crucial that we

get this bill passed," said Ieng during a break at the World Bank conference's

recent press briefing. "Without it, the industry cannot survive."

Though

governmental and business elites at the conference (February 10-11) are pressing

for the diversification of Cambodia's export economy, the country's reliance on

garments can't be ignored. Most of the conference's scheduled panels focus on

how to keep Cambodia's star industry competitive after the expiration of quotas

January 1.

Many of the event's participants said they hope Cambodia's

reputation for high labor standards will continue to attract image-conscious

buyers.

But Ieng said this isn't enough.

"Labor standards are only

one component of competitiveness," he said. "Access to market is the most

important factor - if we don't get this [bill passed], it could jeopardize all

our labor efforts."

Although Cambodian delegates started pushing for the

bill over a year ago, it gathered little attention until the tsunami ravaged the

Maldives, one of the 14 least developed countries (LDCs) included in the

original legislation. Lawmakers then added Sri Lanka, a non-LDC, to the bill,

because it was greatly affected by the disaster.

Senator Gordon Smith

(R-OR) introduced the revised Tariff Relief Assistance for Developing Economies

(TRADE) Act to the US Senate on January 26. The United States already has

similar trade preferences for least developed countries in Africa and the

Caribbean, but not for Asia.

"We've been trying to get this bill

introduced for many months, but in Washington, everything is timing," said

Roland Eng, former Cambodian Ambassador to the United States. "The tsunami

showed how the Asia Pacific region is fragile."

Concern in Cambodia over

the bill's passage intensified in October, leading up to the expiration of the

quota system governing international textile commerce January 1. A bilateral

trade agreement with the United States also ended at the start of the New Year.

Both arrangements guaranteed Cambodia a healthy market share for garments, which

make up 80 percent of the country's total exports.

Now Cambodia must

compete in an open market with industrial giants like China, which can make

goods faster and at lower cost.

Despite constant discussion of quotas in

Cambodia and other small countries reliant on garment industries, the issue has

had a low profile in the United States.

"Quotas were on the agendas of

public policy elites, NGOs, people with an interest in trade," said Karen

Tramontano, president of Global Fairness Initiative. "They weren't on the

[American] public agenda because they don't have an immediate effect on people."

"But," she added, "the tsunami is very much on the public

agenda."

The sheer multitude of issues circulating in Washington makes it

difficult for one to rise above the din of political noise. When legislation

gains momentum and recognition, it generally has a "strong political engine

driving it," she said.

The tsunami gave the TRADE Act a

push.

While Senator Smith wrote in a statement to the Post that he has

long supported facilitating international trade, he added that "the tsunami made

expanding this bill to Sri Lanka important, and it made swift passage especially

vital."

But with increased recognition comes magnified opposition.

The powerful US textile and apparel industry vocally opposes the TRADE

Act, fearing competition from overseas. Over the past four years, the industry

has experienced a job loss rate of 35 percent, said Karl Spilhaus, president of

the National Textile Association.

"Senator Smith's bill is not the

appropriate response to the tsunami disaster," Spilhaus said. "While we

sympathize with the victims of this tragic event ... you don't go to the

intensive care unit for a blood drive. The US textile industry needs to be in

the intensive care unit."

Still, the bill's supporters claim that, with

the tsunami label attached, the TRADE Act now has a much better chance of

passing both houses.

"Everyone's always looking for a hook, what's going

to give a bill some energy," Tramontano said. "For this bill, the hook was the

tsunami - even though the substantive underlying issues have nothing to do with

that."

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