PHNOM PENH: Exports to US up sharply in 2018

Exports to the United States, the world’s largest economy, increased by 25 percent last year, a significant increase in trade that comes despite a deteriorating diplomatic relation after Cambodia dissolved the main opposition party ahead of last year’s general elections.

Data from the US trade office showed that total exports to the United States reached $3.82 billion, up from $3.06 billion in 2017.

US exports to the Kingdom, meanwhile, amounted to $446.6 million in 2018, an 11 percent increase over 2017’s $400.2 million.

Long Kemvichet, spokesman at the Ministry of Commerce, told Khmer Times that the Kingdom’s access to the Generalized System of Preferences (GSP) for travel goods was the main contributor to the growth in exports to the US.

In July 2016, Cambodia was granted duty-free benefits for exports of travel goods like luggage, backpacks, handbags, and wallets to the United States under the GSP scheme.

Mr Kemvichet said they are lobbying the US government to expand Cambodia’s GSP privileges.

“The ministry has already submitted petitions to the US to expand the GSP scheme to garments and footwear. If these petitions are successful Cambodia will enjoy many opportunities to expand exports,” Mr Kemvichet said.

However, Mr Kemvichet also highlighted the need to prepare the manufacturing and export industries to compete without trade privileges.

“We need to strengthen productivity and trade competitiveness so that we can compete with other export countries regardless whether we have preferential treatment or not,” he said.

The diplomatic ties between Cambodia and the United States have been under strain after the main opposition party was dissolved by the Supreme Court in November 2017, with the US government imposing visa restrictions on some Cambodian government officials.

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Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia (GMAC), said that, despite a common belief that bilateral relations are deteriorating, both countries enjoy a healthy trade relation.

“Some perceive the diplomatic and political ties as bad. But for us, the private sector, the relation is good.

“It’s just pure rhetoric. One or two senators voicing concerns about the Cambodian government does not represent the whole US government,” he said, adding that Cambodia has now become an alternative supplier for many US firms that were importing from China.

In January, US senators Ted Cruz and Chris Coons introduced the Cambodian Trade Act of 2019, which would require the US government to review the preferential trade treatment Cambodia receives under the GSP system, according to a press release from Sen. Cruz.

“Cambodia’s Prime Minister Hun Sen has exploited preferential treatment afforded to it by the United States and Europe. He has failed to meet basic labour rights standards, undermined the integrity of elections in Cambodia. The Cambodian Trade Act aims to hold him and his government accountable for this behavior,” Sen. Cruz said.

According to Mr Monika, Cambodian exports to the US are not only growing but also diversifying.

During the first eleven months of 2018, total Cambodian exports to the US under the GSP scheme were valued at $675 million. Exports of goods other than travel goods under GSP amounted to $321 million during that period, with plastic products exports (Chapter 39) valued at $133 million, wood products (Chapter 44) at $78 million, furniture (Chapter 94) at $51 million, iron and steel products (Chapter 73) at $21 million, and automotive parts (Chapter 87) at $14 million.