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Tsunami-triggered trade bill stalls in US Senate

Tsunami-triggered trade bill stalls in US Senate


Three months after its introduction, a bill that would grant trade preferences

to Cambodia and 14 other countries has yet to pass the US Senate.

A bill that could single-handedly save the garment industry has met with resistance in the US.


TRADE Act has taken a backseat to the contentious US-Central America Free Trade

Agreement (CAFTA), said Chris Matthews, communications director for Senator

Gordon Smith, who introduced the bill in late January.

"Currently, the

bill is not moving," Matthews said. "CAFTA is the main trade item on the agenda,

and right now we're just in a holding pattern with the


Negotiations for CAFTA began in January 2003, and lawmakers hope

to vote on the bill - which promotes trade liberalization between the United

States and five Central American countries - in May.

Garment industry

watchers believe the TRADE Act would help boost Cambodia's garment sector, which

faces stiff international competition after the elimination of quotas January 1.

The expired system guaranteed Cambodia a healthy market share for garments,

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


currently pay around a 16 percent tariff on goods destined for the United

States, but the TRADE Act would offer Cambodia selective duty-free access to US

markets. Seventy percent of Cambodian garment exports go to


Industry optimists hope that Cambodia's reputation for high

labor standards will continue to attract image-conscious brands, but buyers have

repeatedly warned that Cambodia must lower the price of production and


"It's absolutely crucial that we get this bill passed," Van Sou

Ieng, president of the Garment Manufacturers Association in Cambodia (GMAC) told

the Post in February. "Without it, the industry cannot survive."


Cambodian delegates started pushing for the bill over a year ago, it garnered

little attention until the Asian 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.

With the tsunami momentum behind it, the bill was

introduced into the US Senate January 26.

"But we're worried [about the

bill's visibility] since we're getting farther and farther away from the tsunami

now," said Ken Loo, secretary general of GMAC. "We're fighting hard to pass

it-or at least get debate started-before [the Senate's] recess in


Congressman Jim Kolbe introduced a version of the TRADE Act into

the US House of Representatives February 17.

"CAFTA has been delayed over

a year, so it makes sense it's high on the agenda now," Loo said. "But in order

to save time [on the TRADE Act] we decided to introduce the bill into both

houses simultaneously."

It will take Congress less time to pass the bill

if both houses are already familiar with the legislation, Loo said. Often bills

are shuttled back and forth between the Senate and House while lawmakers try to

compromise on an acceptable version.

Matthews said it is not unusual for

lobbyists to look for support in both houses.

Though most political

observers attribute the bill's current limbo to CAFTA, spokesman for the Sam

Rainsy Party, Ung Bun-Ang, said Cambodia could be responsible for the


Bun-Ang said rampant corruption and the removal of parliamentary

immunity from three opposition MPs in February might make Congress wary of

passing legislation benefiting Cambodia.

US Senator Mitch McConnell

called for economic sanctions against Cambodia after the parliamentary immunity


But Greg Rushford, editor of a trade-focused Washington DC

newsletter, said trade agreements are generally more concerned with domestic

economic interests rather than the well-being of trading partners.

"Usually the hold-up on preferential trade deals isn't anything

high-minded like fighting corruption," Rushford wrote in an email to the Post.

"It's some US lobby that is afraid of competing."

The powerful US

textile and apparel industry has vocally opposed the TRADE Act, fearing

increased competition from overseas.

However, Bun-Ang said he hoped that

if the bill passes, policymakers will consider issues related to


"Preferential treatment [should] be linked to anti-corruption

efforts, rule of law and democratization in Cambodia," he said. "We want the

economic benefits to be distributed equitably to a wide population, not

concentrated in the hands of a select few at the top."


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