The American Chamber of Commerce in Cambodia (AmCham) has said an end to the Kingdom’s access to a US preferential tariffs agreement after the introduction of the “Cambodia Trade Act of 2019” by Washington would be “counterproductive”.
Such a move would harm not only thousands of factory workers and their families’ livelihoods, but would affect US businesses in Cambodia, an AmCham statement said.
Several US congressmen – including Senators Chris Coons and Ted Cruz, and Representatives Alan Lowenthal and Steve Chabot – introduced the “Cambodia Trade Act of 2019”, which seeks to initiate a review of Cambodia’s status under the Generalised System of Preferences (GSP) over perceived democratic and human rights setbacks in the Kingdom.
“While we know the desire of our honourable lawmakers to pressure the Royal Government of Cambodia for domestic political actions viewed as unacceptable, we believe this approach to be counterproductive,” the statement said.
AmCham said the primary effects should GSP be removed would be felt by factory workers and their families, whose livelihoods depend on the trade supported by the preferential scheme.
Spirit of the trade act
“Additionally, American businesses will suffer from a perceived lack of stability in the Cambodian economy and a further degradation of the trade relationship between our nations,” AmCham said.
The spirit of the 1974 Trade Act, to “provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty”, has been realised in Cambodia, it said.
Through this policy, the US has contributed directly to the improved livelihoods of tens of thousands of low income Cambodians, each of whom used their salaries to feed another five family members.
The US businesses whose goods are produced in these factories have greatly benefited from GSP, while the majority of the monetary value generated from these goods is captured in the US, both on US corporate balance sheets and by US consumers and service workers through retail sales, it added.
“With regards to the official eligibility criteria for GSP, we believe Cambodia’s compliance remains unchanged since GSP was first granted. Workers’ rights and working conditions have made significant progress over the past decade and there continues to be ongoing reform."
“We believe the use of the GSP review process as a means for sending a political message, which is unrelated to the spirit of the 1974 Trade Act, will drastically decrease the goodwill and progress this system has created among the ordinary Cambodian citizen,” AmCham said.
Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika previously told The Post that Cambodia has received duty-free access to the US market since July 2016, when 28 travel-goods production lines operating in the Kingdom became eligible for the scheme.
The value of Cambodian travel goods exports amounted to around $500 million last year, of which $350 million was exported to the US market, Monika said.