GMAC has been actively lobbying for footwear to be included in the next GSP review but is not as hopeful for garments

GMAC has been actively lobbying for footwear to be included in the next GSP review but is not as hopeful for garments

Cambodia's garment industry is lobbying the US to add footwear to its Generalized System of Preferences (GSP) programme, but says it is less optimistic for the inclusion of garments.

The US restored its Generalized System of Preferences (GSP) programme last month as part of the Consolidated Appropriations Act 2018, an omnibus spending bill signed into law by President Donald Trump in March,

The programme is designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 120 designated beneficiary countries, of which Cambodia is one.

While the GSP programme excludes most textile and apparel products exported to the US, the designation of a country as eligible for GSP sends a strong message that it is taking steps to improve worker and intellectual property rights.

In July last year, the US government granted duty-free benefits to Cambodian travel goods, including suitcases, backpacks, handbags and wallets. 

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), which represents around 600 factories employing 700,000 workers, told just-style the industry has been actively lobbying for footwear to be included in the next GSP review. However, he says he is "not too hopeful" regarding garments, given they have never been subject to GSP benefits.

With no trade preference programme in place between the US and Cambodia, apparel exports are subject to an average tariff rate of 14% for knitted apparel and 10.4% for woven apparel.

In contrast, apparel exports from Cambodia currently enjoy duty free access to the European Union (EU) under the Everything But Arms programme, to Japan under the Generalized System of Preferences programme for Least Developed Countries, and to Canada under the Least Developed Country Tariff program (LDCT).

Cambodia has been the sixth fastest-growing economy in the world over the past two decades, according to the World Bank, with an average GDP growth rate of 7.6%, thanks largely to its garment exports. Its minimum wage was also raised this year by 11% to US$170.

Yet in March, the EU fired a warning shot over Cambodia's bows over concerns about declining democratic and human rights, and the country's rule of law.

And in February, the White House said it had reviewed its assistance to Cambodia to ensure that "American taxpayer funds are not being used to support anti-democratic behaviour" as a result of "deep concern" over the recent setbacks to the country's democracy.

Cambodia's garment makers, however, have continued to urge international buyers to continue sourcing from the country.

Kaing Monika, deputy secretary-general of GMAC, told Cambodia's Khmer Times the industry deserves an extension of the programme into new products following improvements in working conditions and the protection of labour rights made in recent years.

"Adding garment and footwear products to the list will be in line with US's commitment to gradually include more products from less developed countries into GSP," he told the publication.