Logo of Phnom Penh Post newspaper Phnom Penh Post - Scrappy garment industry making gains in post-quota environment

Scrappy garment industry making gains in post-quota environment

Scrappy garment industry making gains in post-quota environment

Employment figures in the garment industry are rebounding after the initial losses

that followed the end of a long-standing quota agreement with the United States in

January.

Between 265,000 and 268,000 workers are currently employed in the sector, after the

loss of approximately 25,000 jobs between January and May, said Ken Loo, secretary

general of the Garment Manufacturers Association of Cambodia (GMAC).

The rally in the garment industry comes after the US Department of Commerce's move

in May to limit the increase of Chinese textile imports to 7.5% a year. That move

was followed in June by the signing of a European Union Memorandum of Understanding

that limits China's textile imports to between 8 and 12.5 percent.

Chinese imports have surged by as much as 1,000 percent for some textiles, prompting

the US and Europe to invoke a provision made when China joined the WTO in 2001 that

allows them to impose limits to prevent "market disrupting" booms until

the end of 2008.

"The Cambodian garment industry is still very reactive to what happens outside

Cambodia," Loo said. "The quotas put in place by the US and Europe of course

helped the industry [in Cambodia] greatly."

"We cannot project what will happen in 2008, because it is too far away,"

Loo said , "We do strategic planning for three years tops."

Ros Harvey, who heads the factory monitoring project of the International Labour

Office, also expressed optimism at the state of the industry.

"Cambodia has performed particularly well since the end of the quotas,"

said Harvey, "A lot of people predicted a mass reduction in the number of factories

operating here."

Next week, delegates from the Ministry of Commerce and GMAC will travel to Washington

to continue lobbying for a trade agreement that would grant Cambodia and 14 other

developing countries duty-free access to the US market.

Cambodia currently pays a 17 percent duty on exports to the US, a market that accounts

for approximately two-thirds of all garment-related trade.

The Tariff Relief Assistance for a Developing Economy (TRADE) bill has already been

introduced in both the US Senate and the House of Representatives. It has been modeled

after the Africa Growth and Opportunity Act (AGOA), which provides special access

to textile and clothing imports from lesser-developed countries in Sub-Saharan Africa.

"We are hopeful to get duty-free access to the US market," said Loo. "What

the Washington trip will do is lay the groundwork for the future of the Cambodian

garment industry."

"If the bill is passed, we will definitely see an increase in the number of

factories that come to Cambodia, and I would not be surprised if the number of factories

doubles," he said.

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