Trade with US normal, says ministry

May Kunmakara / Khmer Times No Comments Share:
Garment exports to the US have been steadily falling over the years. KT/Ven Rathavong

Despite a diplomatic row with the United States, the trade relationship between Cambodia and the US remains normal, said the Ministry of Commerce’s spokesperson yesterday.

Soeng Sophary, told Khmer Times yesterday that the US, Europe and Canada were big markets for Cambodia’s garment and footwear products.

“Although there seems to be some problems currently with the US, diplomacy at the end of the day will prevail and there’s mutual respect for it,” said Ms Sophary.

“I don’t think the issue is big enough to jeopardise our export of garments and footwear to the US,” she added.

“I think our government will find an amicable and peaceful way through dialogue to diffuse this situation. There is a clear consensus between politics and economics – they are two separate issues.”

The US Embassy on Tuesday called on the government to immediately release opposition leader Kem Sokha, claiming allegations the United States were helping him push for regime change were made without a shred of serious or credible evidence.

Mr Sokha was last week charged with treason over comments made in 2013 video footage from Australia-based CBN news, which showed him saying the US government had been helping him to push for regime change in Cambodia since 1993.

Speaking at a press conference on the matter, Ambassador William Heidt said the US joined the European Union in calling for Mr Sokha’s release, adding that pressure on civil society must also cease.

According to Cambodia’s General Department of Customs and Excise, exports of garments and footwear rose by 7.2 per cent to $7.3 billion in 2016, up from $6.8 billion in 2015.

“The US market, which was a lifeline for the industry just a few years ago, now accounts for just a quarter of the sector’s exports. It should be noted that Cambodian garments entering the US market are subject to an average tariff rate of about 16.8 percent (of the Most Favoured Nation rate),” stated the report.

According to the report, the share of the sector’s exports going to the US market continued to drop from 29 percent in 2015 to 25 percent in 2016 due to the outcome from market diversification outside traditional ones, namely the EU and the US.

“There is an emerging sign of strong growth of the sector’s exports to markets outside the EU and US. Exporting to other markets represented 35 percent in 2016, up from 28 percent in 2015, and from just 11 percent 10 years ago.”

The customs and excise report pointed out that the growth of garment and footwear exports to markets outside the US and EU was mainly due to expansion of exports to the Japanese and Canadian markets.

“Japan has also grown in importance as an export destination for Cambodia,” it said.

According to the report, exports to Japan accounted for 9 percent of total garment and footwear exports in 2016, up from 7.7 percent in 2015 and just 2.7 percent in 2010 while exports to Canada were nearly 8.0 percent of market share, up from 7.5 percent in 2015 and just 0.5 percent in 2010.

At the same time, the exports to China have also been quite strong, from a low base which was virtually zero in 2010. The report pointed out that the Chinese market accounted for 2.3 percent of Cambodia’s garment and footwear exports in 2016, up from 1.8 per cent in 2015.

“It appears as if Cambodian garment and footwear export patterns may be driven by a number of free trade agreements that Cambodia had with various countries, particularly under the Asean frameworks,” said the report.

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