US review of GSP
Fri,
17 November 2017
With the recent launch of a new US initiative to ensure that developing countries benefiting from duty-free access are in compliance with the eligibility requirements of the Generalized System of Preferences (GSP) scheme, a representative of the industry body representing Cambodia’s garment sector said yesterday improvements in working conditions should keep the Kingdom above scrutiny.
This comes after a recent
announcement by US Trade Representative Robert Lighthizer that the Trump
administration would first target countries in Asia by examining 15 criteria
that include combating child labour, respecting internationally recognised
worker rights, providing adequate and effective intellectual property
protection, and providing the US with equitable and reasonable market access.
If a country fails to meet the
criteria, the US could trigger a full review and strip a country of its status,
thus ending duty-free access to the world’s largest consumer market.
Kaing Monika, secretary-general
of Garment Manufacturers Association in Cambodia (GMAC), said that the Kingdom
should not be concerned by a US review.
“So far, Cambodia has always
met the criteria for the GSP scheme and secured its eligibility because of
improvements in working conditions, especially in the garment industry that has
seen higher wages,” he said. “It will not be a problem for us to meet the
requirements.”
According to a Facebook post by
the US Embassy yesterday, Cambodia has benefited from the GSP scheme since
1997, with a total value of duty-free exports amounting to $179 million over
the last two decades. In July of last year, the US expanded GSP preferences to
the Kingdom by allowing Cambodian-made travel goods to enter the US market
duty-free. Meanwhile, GMAC has filed a petition hoping that footwear exports
are accepted into the GSP scheme, a long shot seeing that footwear has never
been included in the scheme since it was established in 1976.
Miguel Chanco, lead Asean
analyst for the Economist Intelligence Unit, said that Cambodia’s deteriorating
political climate, which yesterday saw the dissolution of the main opposition
party, had no bearing on the US decision to scrutinise the scheme.
“The US’s decision to
scrutinize the GSP eligibility of countries in Asia is very much in line with
the Trump administration’s protectionist bias towards trade, and is consistent
with a few of his other ambitions to reshape America’s existing trade frameworks
to its advantage,” he said in an email.
He added that even in the
unlikely event that the scheme was rolled back for Cambodia, it would be little
to no threat to the economy, seeing that the Kingdom’s chief export, garments,
has never been included.
However, Paul Chambers, a
lecturer at Thailand’s Naresuan University, said that Cambodia’s GSP status
could be reviewed if Prime Minister Hun Sen draws the ire of the Trump
administration and Washington because of its growing economic, political and
military tilt towards China.
“In the past, the US has
excluded some countries from GSP coverage because they supported terrorism, for
example Libya, [or] were communist, [like] Vietnam, or were deemed to be
facilitating intellectual property piracy,” he said. “In the case of Cambodia,
Hun Sen’s intensifying ties with China and the fact that Cambodia still relies
on the US as a major export destination [could] be behind reasons for
Washington’s choice [to] re-evaluate Cambodia’s GSP trade eligibility.”
Contact
authors: Kali Kotoski and Hor Kimsay
No comments:
Post a Comment