AmCham Cambodia had the pleasure of hosting a breakfast discussion on Thursday, July 28th, 2016 with Deputy Assistant U.S. Trade Representative, Mr. Erland Herfindahl and Ms. Emma Laury, International Relations Officer at the U.S. Department of Labor regarding the recent expansion of the Generalized System of Preferences (GSP) program. This expansion, which grants duty free access for travel goods made in Cambodia, has the potential to support significant industrial development and tens of thousands of new jobs in Cambodia.
GSP is a 40 year old program designed to promote economic growth in the developing world by providing preferential duty-free access to the U.S. market for a wide range products from developing countries.
In June of this year, President Obama announced that U.S. will provide new duty free preferences for travel goods under GSP for least developed beneficiary developing countries, and African Growth and Opportunity Act countries. During Deputy Assistant USTR Herfindahl’s visit to Cambodia, he emphasized that of the countries eligible to receive the expanded GSP benefits, Cambodia is the only one with significant capacity to produce these products. The expansion includes 27 products categories, including luggage, purses, wallets, sports bags, hand bags and back packs. Given the duties of up to 20% for non-beneficiary countries, Cambodia has a competitive advantage and an unprecedented opportunity to significantly increase and diversify its exports. In 2016, Cambodia’s exports of travel goods to the U.S. totaled $48 million. Industry experts believe this expansion could increase exports to over $200 million in two years.
The United States remains the largest single country export market for Cambodia. This recent expansion will attract greater foreign investment and help boost Cambodia’s economic growth, job market, and industrial diversification.