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Push for duty-free access

Sok Chan / Khmer Times Share:
Cambodia wants duty-free status for its footwear exports to the US. Reuters

The Cambodian government is pushing for the United States to fully implement at least 97 percent of duty-free access to least developed countries, particularly to the kingdom, as it promised at a World Trade Organisation ministerial conference in Hong Kong in 2005.

Commerce Ministry spokeswoman Soeng Sophary said the US currently has granted about 80 percent duty-free access.

“We are calling for the US to fully implement its obligation on duty-free to LDCs,” Ms Sophary said “We are also pushing for the footwear and garment industry to have duty-free access to the US market.”

So far, the US has not yet fully implemented the obligation as promised in the 2005 WTO Ministerial Conference in Hong Kong.

Australia, New Zealand, Norway, and Switzerland have offered 100 percent of their GSP, the EU has 99 percent, Canada 98.6 percent, Japan 97.9 percent and China 97 percent.

Kaing Monika, deputy secretary-general of the Garment Manufacturers Association in Cambodia, said Cambodia’s footwear industry had been exporting under the US most-favoured nation (MFN) program which required paying import tax from 8 percent to 38 percent, according to categories of footwear products.

“Currently, we have to pay export taxes to the US of up to 38 percent depending on type of footwear under the MFN programme, and if footwear products are approved and included in the GSP [Generalised System of Preferences] eligible product list, the import duty rates would be no more,” he said.

“This would provide Cambodia better market access which Cambodia should be awarded for its continuous improvement in terms of working conditions [for workers], which is a major criteria for GSP provision.”

Mr Monika said since Cambodia became a member of WTO, all exports from Cambodia to other WTO members were quota-free.

He said that what GMAC and the ministry were asking for was duty-free status for footwear in particular and for more products in general.

Countries such as Canada and Japan, along with the EU, had been active in reviewing their GSP programmes and releasing more and more products off their sensitive lists.

Mr Monika said that GMAC currently had about 59 footwear manufacturing factories and exported $700 million worth of goods last year.

Exports to the US amounted to $70 million last year while most exports went to the EU and Japan.

At a meeting with GMAC and footwear factory owners last Friday, commerce secretary of state Ok Boung said the United States’ GSP Footwear Act 2017 would expire at the end of the year.

As it has been in the past, Mr Boung said, the supporters of the legislation could push for a three-year extension.

“All footwear factories through GMAC must prepare the petition on footwear products, and the ministry will support this petition,” he added.

In July last year, the US government granted duty-free benefits for Cambodia for the export of travel goods such as luggage, backpacks, handbags and wallets under the GSP. Cambodia’s exports of travel goods increased from $53 million in 2015 to $100 million last year, and will probably increase to $200 million this year.

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