Cambodia drafting new procedure to access US market

Cambodia drafting new procedure to access US market

The Royal Government of Cambodia (RGC) Wednesday announced that it is drafting a new special procedure to monitor trade transparency practices in compliance with the rules of origin, to secure continued access to the US market valued at over $10 billion annually.

Hit by tariffs imposed by the previous and current US administrations in less than a month, the Ministry of Commerce (MoC) has issued a press release notifying all producers and exporters to the American market about an upcoming trade policy.

The statement was reposted yesterday by Prime Minister Hun Manet on his official media platforms, along with a caption, “The announcement regarding the preparation of an additional procedure for exporting goods to the US market. More information on this special procedure will be shared with the public shortly.”

According to the MoC press release, the Royal Government has strictly adhered to international trade rules, regulations, and obligations and commitments under Cambodia’s accession to the World Trade Organization (WTO).

Cambodia enacted the Law on Rules of Origin (LRO) in July 2023, aimed at promoting and facilitating trade under preferential arrangements, implementing non-preferential origin rules, and preventing fraud related to the origin of goods, the statement added.

To safeguard the interests of producers and exporters in the Kingdom, MoC, in collaboration with relevant ministries and institutions, is developing an additional procedure for exporting goods to the US market.

This special trading framework focuses on strengthening mechanisms to monitor the use of local content and value addition, ensuring transparency and compliance with the rules of origin provisions agreed upon by both countries.

In this regard, the Royal Government urged all producers and exporters to the US market to take careful note of this information and to implement it with the utmost diligence.

Speaking to Khmer Times, Chey Tech, a socio-economic researcher, noted that the Royal Government has long prioritised adherence to the Law on Rules of Origin (LRO) under the WTO framework. However, he pointed out that the US administration has recently imposed tariffs on all categories of goods from Cambodia.

“In particular, the US has levied significant tariffs on Cambodia’s solar panels at over 3,500 percent, citing concerns over the misuse of origin rules.”

They allege that we have allowed finished Chinese products to be labelled as ‘Made in Cambodia’ for export to the American market, effectively exploiting our low-income status to benefit from tax exemptions, he added.

He stressed that to resolve the issue, the Royal Government should ensure transparency and accountability by disclosing detailed information and cooperating with an international auditing firm or US investigators to uphold professional standards for all parties involved.

Based on the General Department of Customs and Excise (GDCE) annual report released on January 10, the US remained the Kingdom’s largest export market, with bilateral trade volume reaching nearly $11 billion, an increase of 11 percent year-on-year.

Of the total trade volume, Cambodia’s exports to the US amounted to $10 billion, reflecting an 11.4 percent increase compared to the previous year, while imports from the US were valued at $265 million, marking a 2.7 percent rise.

khmertimeskh