Leading US brands including Nike, Gap, Levi Strauss, JC Penney, Jones Apparel, Phillips Van- Heusen, Americal Eagle Outfitters and The Walt Disney Company have urged the US lawmakers in a jointly sent letter to quickly pass a legislation granting Cambodia immediate duty-free and quota-free access to the US market for all apparel products.
The letter says that US imports from Cambodia have dropped 30% this year as compared to 2008, resulting in the loss of tens of thousands of apparel jobs.
The US administration is already considering duty-free access to textile products from Least Developed Nations which include Cambodia. But brands say while they welcome such access for all the LDCs, Cambodia needs such assistance immediately. Brands also point to the ILO Better Factories Cambodia programme which has helped improve working conditions in apparel factories. Improvement in working conditions is likely to be a key requirement in the planned legislation to to grant duty free access to LDC countries.
Cambodia is one of the poorest nations in the world. But it's apparel factories are good examples of decent working conditions, thanks to the ILO programme. The question then is why these factories are not competitive enough to retain orders? Why have barnds reduced their orders from the country when they recognize the fact that factories in Cambodia have relatively better working conditions. What is then the incentive for factory owners to ensure better working conditions?
While brands' effort to pursuade the US lawmakers to agree to some immediate trade benefits for Cambodia is commendable, they must try to hold on to the country in the interim period. They should also actively participate, and invest, in improving productivity in Cambodian apparel factories. An improved productivity will reduce the cost of production and make the factories more competitive.