Cambodia will expand its garment, footwear and travel goods (GFT) export market to more countries in its bid to remain competitive in the industry, especially in the wake of challenges from the European Union (EU) market, under a new policy directive for the sector.
The country’s GFT Development Strategy 2022-2027, discussed recently during the launch of the GFT Sector Brief, undertaken jointly by the European Chamber of Commerce in Cambodia (EuroCham), Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC), and Internal Labour Organization (ILO), clearly points to this direction.
Huot Pum, Under Secretary of State, Ministry of Economy and Finance, said at the event that the new strategy proposes market diversification as a key along with other objectives such as promoting investment in high value-added and high-end products, strengthening human resources and improving the conditions of the workers, for keeping the GFT sector competitive and sustainable.
The Sector Brief pointed out that GFT exports to the EU, one of the country’s traditional export markets, dropped by 20 percent in 2020, from $4,257 million in 2019 to $3,410 million, and further declined by another 20 percent, to $2,726, in 2021.
The decline in 2021 is mostly attributed to the exit of the UK from the EU bloc. The actual drop in GFT exports to the EU market, subtracting the UK’s withdrawal from the EU, was just 1.26 percent in 2021.
The Sector Brief said that Cambodia was able to overcome some of these challenges by diverting its GFT exports to other markets, particularly the US. Here, the share of exports rose to 43 percent in 2021, up from 37 percent in 2020, thus making the US the largest single market for Cambodia’s GFT exports.
At the same time, the share of Cambodia’s GFT exports to some other markets – outside the US and the EU – also increased to 33 percent in 2021, from just 28 percent in 2020. This development can again be attributed to the ‘Brexit effect.’ If the UK was included in the 2021 comparison, the share of the sector’s exports to the ‘Rest of the World’ markets remains almost the same.
For authentic article, please read here
Author: Manoj Mathew
Source: Khmer Times
December 22, 2022
