Cambodia have been named among just four countries worldwide, granted access to a fresh US duty free tariff mechanism, across a three-year window, but with strings attached.
Deputy Prime Minister Sun Chanthol, who additionally holds the post of First Vice-Chairman of the Council for Development of Cambodia, disclosed the news during a recent media briefing.
The Kingdom stands alongside Indonesia, Malaysia and Bangladesh as the sole nations chosen for this particular scheme.
Chanthol verified that, under the US tariff rate quota, Cambodia may ship agreed volumes of textile goods without facing conventional customs charges over the coming three years.
Access to these tariff exemptions hinges on particular sourcing conditions. To secure duty-free treatment, producers must obtain textile inputs directly from American suppliers.
Chanthol explained that the exemptions become applicable where Cambodia’s garment sector incorporates US-manufactured cotton, yarn or fabric within its clothing production.
Although the structure has been put in place, Washington has yet to publish the finalised rules governing the initiative.
These upcoming guidelines will set out the precise method for calculating quota allocations alongside the required implementation steps.
Phnom Penh has signalled its ambition to draw investors into the textile sector who are prepared to buy American-origin raw materials for domestic garment production ahead of shipping the completed items onward to US buyers.
However, there are obstacles to accessing the duty-free access for Cambodian apparel exports as a majority of factories have established sourcing links elsewhere, notably China.
Switching to American-sourced textile inputs would necessitate reshaping current trading arrangements and manufacturing schedules.
Image courtesy: CamboJA_Pring Samrang
