WASHINGTON: Cambodia’s total exports to the United States declined last year compared with 2015, due to uncertainties in the US presidential race and rising exports from Vietnam and new market player Myanmar. According to figures from the Office of the US Trade Representative, total exports from Cambodia to the United States were more than $2.8 billion last year compared with more than $ $3 billion in 2015 – a decline of about seven percent.
Seung Sophary, spokesperson for the Ministry of Commerce, told Khmer Times yesterday that exports went down due to a fall in American consumer demand for overseas products in the latter part of 2016, due to uncertainties in the US presidential race. “The American people were tightening their belts to brace for the worse in the race between the two candidates. There was high uncertainty and this affected their desire to buy imported goods,” said Ms. Sophary. “Now that the election is over, things hopefully will return to normal. The American people have got a new president.” Kaing Monika, deputy director- general of the Garment Manufacturers Association of Cambodia, said that Cambodian garment exports to the US were also facing stiff competition from Vietnam and Myanmar.
The US is Cambodia’s second largest export market for garments, after the European Union. “One of the biggest challenges we face now is from Vietnam,” said Mr. Monika. “They are now the second biggest supplier of garments to the US. Their wage levels are on par with ours and this makes it difficult for us to compete in terms of cost.” The minimum wage in the garment and textile industry has been increasing year-on-year over the past few years. The new minimum monthly wage for garment workers this year is $153, up from $140 last year. But Cambodia’s fears that it would lose its competitiveness in the garment industry have been abated, for the time being, with new US President Donald Trump’s executive order pulling the US out of the Trans-Pacific Partnership (TPP).
The TPP would have eliminated most tariffs in the garment sector and there were fears that Cambodia’s garment exports would lose out in favor of Vietnam – which was set to benefit from the slashed tariffs as one of the 12 Pacific-rim countries that signed on the deal and was close to ratifying it in its legislature. Mr. Monika said the “dark horse” in the garment trade is Myanmar which has “come out strong with an aggressive and concrete master plan.” “It has joined the club, eating into some of our US orders.” Last year, according to the Myanmar Garment Manufacturers Association, the Myanmar apparel industry operating under the cut-make-pack system exported more than $1 billion worth of clothing. This was a massive 145 percent increase, compared with exports totaling $408 million in 2015.
