Representatives of the Garment Manufacturers Association of Cambodia (GMAC) recently met with government officials to discuss the Regional Comprehensive Economic Partnership (RCEP), particularly how the agreement will handle the rules of origin, and asked the government to push for the fabric-forward rule during negotiations.
The RCEP is a regional economic agreement being negotiated between the 10 Asean governments and their six free trade agreement partners – Australia, China, India, Japan, New Zealand and South Korea.
“The rules of origin are the most contentious part in any free trade agreement. There is a push to conclude the agreement in another year or so, and Asean needs a unified position before talking with the other six countries,” said Kaing Monika, the deputy secretary general of GMAC, during the inter-ministerial meeting, which was held on Wednesday.
“Based on the principle of mutual understanding we have at the Asean Federation of Textile Industries, Asean would agree on the fabric-forward rule, which is a compromise between yarn-forward, which is too strict, and single-transformation, which it too laid back,” he said.
“This would be done to avoid a deadlock in moving the negotiations forward. This proposal on the fabric-forward rule had been presented to our executive committee in July and was endorsed.”
Mr Monika said that a compromise in this area is necessary to speed up negotiations. He also explained that Cambodia imports most of its textiles from prospective RCEP members, so the country would benefit from the adoption of the fabric-forward rule.
“Of course, we also import quite a lot from Taiwan, which would not be a party to the agreement,” he said, adding that other items produced in non-RCEP countries are to be identified and put in a special list to be given a more relaxed treatment.