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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Cambodia: Garment, Footwear Exports on the Rise

Monday, June 20, 2016 > 10:28:28
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(Khmer Times)

The total value of exports from the Kingdom’s garment and footwear industry increased sharply this first quarter by 39.1 percent to some $2 billion compared to about $1.5 billion in the same period last year, according to figures released by the Ministry of Commerce.


The ministry’s figures, made public last week, also indicated that the European Union (EU) remained the largest market for the country’s garment and footwear exports. The total value of exports to the EU, in this first quarter, was about $717.8 million, followed by $419.2 million to the United States, $41.7 million to Canada and $34.6 million to Japan. Exports to other global markets amounted to $65.9 million.

Seung Sophari, spokesperson for the Ministry of Commerce, told Khmer Times that the increase of exports to the EU was due to the preferential treatment given to Cambodian garment and footwear products.

“For the European Union, Cambodia gets preferential treatment through low tariffs in the EBA [Everything but Arms] agreement,” she said.

Though there is no preferential trading agreement with the US, negotiations are ongoing between both countries.

“We hope to attract more investors from the US to invest in Cambodia’s garment sector,” added Ms. Sophari.

“Japan is also an important market for Cambodia,” she stressed, adding that exports from the garment and footwear sectors were on track for this first quarter.

The ministry spokesperson, however, expressed concern of rising labor costs which she said did not match up with current productivity. According to Ms. Sophari this could threaten the industries, especially the garment sector.

Cambodia’s garment industry is regularly plagued with strikes and protests. Advocacy groups are urging clothing brands to take action to ultimately end low wages.

Ester Germans, program manager at the International Labor Organization (ILO) told Khmer Times that the EU continued to represent the largest market for Cambodia’s garment and footwear exports.

“The garment sector is a competitive sector where factories will have to invest in productive systems and where industry partners have to work on a conducive business environment to ensure that the sector remains attractive,” said Ms. Ester.

She added that it will be important for industry partners here in Cambodia to be pro-active in the continuously changing context in which garment factories operate.

Ms. Ester added that  good working conditions and good relations between workers and management were the keys for respecting workers’ rights and ensuring business stability.

On the top of this, she added, the changing context included trade agreements in the region that will offer opportunities to Cambodia.

“The production of higher value-added products in combination with good quality jobs will help the development of higher technology and better the skills of the Cambodian workforce,” added Ms. Ester.

The total exports of the garment and footwear sector reached $6.3 billion last year, representing a 7.6 percent growth over 2014 ─ of which exports rose by 6.5 percent to $5.7 billion. The footwear sector continued to record rapid growth in 2015, with exports increasing by 21.8 percent to $538 million, while exports of garments rose by 6.5 percent.

Meanwhile, the number of garment and footwear factories has grown steadily and reached 699 at the end of 2015. In comparison, the number of factories at the end of 2014 was 626.


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