Cambodian Commerce Minister Cham Prasit said that duty-free agreements signed between neighboring countries and foreign importing countries may threaten Cambodia’s garment industry.
Mr. Prasi told a news conference that Cambodia’s rival countries, including Vietnam and Myanmar, have recently proposed signing free trade agreements with the United States and the European Union, which may reduce orders for Cambodia’s garment industry.
The Commerce Minister pointed out that if Vietnamese clothing exports to the United States become tax-free and Cambodian clothing continues to be taxed, then the Cambodian clothing industry will be in danger.
Because trading partners in the United States, the European Union and other regions will transfer orders from Cambodia to other countries that have signed duty-free agreements.
According to the minister, Myanmar has begun negotiations with the United States and the European Union and may soon reach a trade agreement. Compared with Cambodia, the garment industry in competing countries benefits from low electricity prices and fewer strikes and protests, which is also an advantage for importing countries.
Recently, Cambodia’s garment exports have increased significantly in the first three months of this year, with a year-on-year increase of 17.5%, reaching US$1.34 billion.
The garment industry accounts for approximately 80% of Cambodia’s overall exports.
