Speaking at the United Nations’ latest gathering, recently re-elected Prime Minister Hun Sen on Saturday raised concerns over protectionist practices by key economies.
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“We are deeply concerned by the tensions made by a first world superpower in the diplomatic circle and by the conflicts happening in many places due to this superpower’s interference,” Mr Hun Sen said during his opening remarks at the 73rd session of the United Nations General Assembly in New York.
He said he was deeply concerned by the rush decisions made by this superpower to withdraw from major international agreements, adding that those decisions threatened the legitimacy of the international legal order.
“This unilateral actions have undermined state-to-state relationships and caused tension in the international community,” he said.
The Cambodian premier said there has been a direct attack on multilateralism.
“Undoubtedly, in our globalised world, all things are connected. If we begin to adhere to protectionist policies, unilateralism and trade war, we are closing the door by not welcoming any trade and investment opportunities which have provided prosperity to our countries, both small and big ones, for many decades.
“Cambodia, as a small economy, believes in the interests of rule-based international cooperation. As a matter of fact, we all have been prospering because of globalisation. We all are thus convinced that global trade should not be hindered by the imposition of unilateral tariffs.”
Mr Hun Sen said that global trade should be enhanced and supported through adherence to policies that are conducive to trade and investment, as well as the provision of special preferential treatment to developing countries.
“Stability and diversification in the financial sector need to be further encouraged to promote innovation and development. All in all, we need to jointly maintain and strengthen multilateralism,” he added.
The US and China have been involved in a tit-for-tat trade war since early July. As a consequence, a number of international brands are shifting production away from China, with Cambodia a strong contender to become their next base for the manufacturing of garments and footwear products.
A study conducted among companies that source goods from China released in July by the US Fashion Industry Association found that 67 percent of participants expected to reduce the amount (in monetary value or volume) they produce in China over the next two years. The same study put US trade protectionism as the number one challenge for the industry.
Steven Madden CEO Edward Rosenfeld told Bloomberg that his company’s has been shifting production of its handbags from China to Cambodia.
15 percent of Steven Madden’s handbags will come from Cambodia this year, with this percentage likely to double in 2019.
“That gives us frankly about a three-year head start on most of our peers, because many folks are just now trying to make that move,” Mr Rosenfeld said.
Kaing Monika, deputy secretary general of the Garment Manufacturers Association in Cambodia (GMAC), told Khmer Times that the trade war will impact investors’ confidence in China and will make them consider re-locating to other countries in the region.
“Aside from the trade war, China rising labour costs and a more stringent enforcement of regulations, such as environment-related laws, will also prompt more and more factories to leave China, and Cambodia stands to benefit from this.
“The real question is whether Cambodia would be their first choice for re-location, or if they have other countries in mind Peace and stability are important but there are other factors that count when gauging national competitiveness,” he added.