Union leader Chea Mony sends letter on tariffs to US

13 January 2010
by Sen David
Phnom Penh Post

Free Trade Union of Workers of the Kingdom of Cambodia head calls on Capitol Hill to back bill abolishing duty on exports

Photo by: SOVAN PHILONG
A vendor sews clothes at Phnom Penh’s Russian Market. Cambodian exports incur duties averaging 16 percent upon entering the United States, the Kingdom’s biggest overseas market.

THE President of the Free Trade Union of Workers of the Kingdom of Cambodia said Tuesday he had sent a letter to Speaker of the US House of Representatives Nancy Pelosi through the US Embassy in Phnom Penh as part of the latest effort to push for duty-free exports for the Kingdom.

Chea Mony, who sent the letter Monday to the speaker, said it was necessary given the huge decline in Cambodian exports to the US – mostly garments – following the onset of the economic crisis.

“It is a message to show that we want to help Cambodian workers because nowadays there are so many workers that have lost their jobs,” he said, adding that although the US donates a lot to the Kingdom, excessive corruption means that much of it does not reach the people.

“If the US wishes to help Cambodia, the US will pass duty-free access for Cambodian exports,” said Chea Mony.

While almost all garment-producing countries suffered a decline in exports last year, Cambodia suffered more than others due mostly to structural weakness in the sector and high tariffs.

In the first eight months of last year, the Kingdom’s exports to the US fell 23.31 percent compared to an average 14.3 percent slide, according to US Office of Textiles and Apparel statistics. Vietnam, where total manufacturing costs are about 20 percent lower than Cambodia, saw garment exports fall just 1.2 percent over the same period.

At the same time the Kingdom is severely hampered by US tariffs – 30 out of 49 least-industrialised countries in Asia enjoy duty-free, quota-free access to the US, whereas Cambodia is subject to an average 16 percent tariff, a fact that many – including Chea Mony – deem unfair.

The US is Cambodia’s biggest export market. In 2008, official figures showed 65 percent of the Kingdom’s exports were garments, of which three-quarters went to the US.

US Embassy Spokesman John Johnson confirmed Tuesday that the letter had been received and would be passed on to Washington.

It comes after a Cambodian delegation – including Commerce Minister Cham Prasidh – went to the US capital in November to lobby for the passage of a bill that would grant duty-free access for Cambodian garments.

Cheat Kemra, a senior official of the Garment Manufacturers Association of Cambodia (GMAC), said Tuesday that garment producers would focus more on Asia and the European Union as the US continues to struggle to recover from the economic downturn.

Also working against the Kingdom, he said, was the fact that Cambodian exports make up 3 percent of the total imports into the US – typically Washington does not grant duty-free access to exporting nations representing above 2 percent of the total.

“It is an obstacle, but we believe that the US will favour … Cambodian garment exports,” said Cheat Kemra.