Cambodia's Clothing Industry Prepared to Meet Competition on World Markets

By Soy Sophea

A top Cambodian government official has expressed his belief that the nation’s textile industry will retain a competitive hold on the global clothing market. Cambodia is ready for competition in world marketplaces alongside Chinese clothing manufacturers, following the United States’ decision to allow the import of Chinese textiles. The U.S. trade barriers will be dismantled by December this year, according to Cham Prasith, minister of commerce.

Speaking early last month, the Minister said his confidence was based on the ability of Cambodia's manufacturers and their potential in competing with China, Vietnam, Pakistan and India. He described the attention paid to ensuring a safe and productive working environment and the respect paid to worker’s rights. The combination of these two commercial policies will lead to Cambodia's production of better clothing products for the world’s markets.

“We have spent the last five or six years in preparation for the moment when our textile industry must face competition,” he said. “A vital part of that has been the conversion of health, safety and trade policies into safe and profitable working conditions on the factory floor. We want all manufacturers in Cambodia to respect the rights of the laborer.”

However, the Minister said that Cambodia has made repeated requests to the U.S to reduce its import duties on Cambodian products to ensure a more equitable U.S. marketplace for the products of Cambodian industry.

Cham Prasith predicted that Cambodian exports to the U.S. would continue to increase, though at a slightly lower percentage rate than in previous financial years. “I don’t predict any catastrophic collapse in the flow of Cambodian exports to the U.S.,” he said. “In previous years we have enjoyed increases of between 15 to 20 percent. However, in 2008, the rate of increase may slow down, with modest increases of 7, perhaps 8 percent. The increase is not as meteoric as it was before, but it is an increase nevertheless.”

The Minister added that from January to July, 2008, Cambodian exports brought in 2.4 billion U.S dollars while in 2007 the export market created a total of 4 billion U.S dollars. He said that two thirds of Cambodia’s goods for export were sold in U.S. markets.

A report, available for download at the Better Factories Cambodia website stated that there is as yet no sign of factories or buyers leaving Cambodia. However, to attract more investment in the face of increasing competition, Cambodia will need to increase productivity and improve industrial relations.

Some labor union leaders also suggested that the goal of competing in the world market would not succeed without solutions being found to problems such as high food prices, rising electricity bills, transportation costs and so on.

Rong Chhon, president of Cambodia’s Worker’s Union, said that until these problems were addressed, Cambodia's textile industry would experience difficulties when competing with giant countries like China. He too targeted food prices, energy costs and transportation as factors counting against the development of a truly competitive industry.