The US Senate has received a formal petition from the Garment Manufacturers Association of Cambodia (GMAC), asking to give Cambodian garment and footwear exports preferential trade treatment.
The US’s Generalised System of Preferences (GSP) scheme allows only certain non-sensitive products from 120 developing countries to enter the US duty-free, and, most notably, excludes garment and footwear articles.
GMAC’s petition follows the announcement that the US will be reviewing its GSP programme by the end of the year and voting on the GSP Footwear Act of 2017, which would allow outdoor shoes and boots, as well as other footwear manufactured outside the US, to be included in the programme.
“GMAC has the pleasure to inform all members that the US GSP footwear bill was recently introduced to the US Senate,” the official statement from the factory association reads.
“Thirty-eight members of the US Congress, led by Ralph Norman and Jim Himes, also sent a letter to Kevin Brady – the chairman of the House Committee on Ways and Means – asking that GSP legislation extending the programme be passed before the end of the year when it expires.
“The US Congress is focusing right now on a tax bill, but there is still at least a 50 percent chance that the GSP footwear bill will be passed before the end of the year.
“If it doesn’t, the effort would continue into 2018.”
Kaing Monika, the deputy secretary-general of GMAC, said footwear remains a sensitive industry in US trade policy, which prevents the inclusion of certain types of footwear in the GSP scheme. The amount of potential lost tariff revenue also limits the scope of footwear that can be included.
“The US government is now reviewing its annual GSP policy and GMAC is engaging a Washington-based law firm to help with its request, which if successful would tremendously help the Cambodian economy in terms of export growth, new investment and employment generation for thousands of Cambodians,” he said.
Mr Monika also said that according to representatives of the US’s Committee of Jurisdiction, the House Committee on Ways and Means and the Senate Finance Committee, there will be a “concerted effort to renew the overall GSP programme before it expires”.
Nearly $180 million of Cambodia’s $245 million in footwear exports in 2016 belong to categories that would be eligible for GSP under the proposed GSP Footwear Act of 2017, according to GMAC’s estimates.