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US Expands Duty Free Access for Travel Goods Made in Cambodia

Cambodian garment workers work inside a factory in Phnom Penh, Cambodia, file photo.

Cambodia exports more than $5 billion annually to its two major textile export markets, the US and EU.

The United States Trade Representative has announced a major expansion of trade preferences to Cambodia that it said could bring “significant benefits” to the country.

Under the new U.S. Generalized System of Preferences (GSP), Cambodia, along with other developing countries that produce travel goods such as luggage, will be able to export those products to the United States duty free.

The expansion will give Cambodia access to the $10 billion import market in travel goods, further encouraging the development of Cambodia’s textile industry, according to a statement from the U.S. Embassy in Phnom Penh.

“This announcement … has the potential to open up an entirely new market for Cambodian exporters and to create thousands of jobs for Cambodians,” U.S. Ambassador to Cambodia William Heidt said. “We encourage Cambodian manufacturers to take advantage of this new opportunity, which would help to diversify Cambodia’s economic base, spur economic growth, and alleviate poverty.”

The GSP is a 40-year-old trade preference program under which the United States provides duty-free treatment to imports from beneficiary developing countries. According to U.S. Trade Representative Michael Froman, “We have used these programs to give some of the poorest countries in the world a vital leg up vis-à-vis more advanced competitors.”

Mey Kalyan, senior adviser to Cambodia’s Supreme National Economic Council, welcomed the move, saying it was a good thing for the economy.

“When we have the market, I believe that more investors will come to invest in Cambodia. So, it will allow our economy to progress, allow the people to have jobs and more importantly, it will give more added value,” he said.

Cambodia exports more than $5 billion annually to its two major textile export markets, the US and EU.

Under the GSP program, approximately 5,000 products from 122 beneficiary developing countries and territories, including 43 least-developed countries, are eligible for duty-free treatment when exported to the United States. In 2015, the total value of imports that entered the United States duty-free under the GSP was $17.4 billion.