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8 Jan 2021

Phoung Vantha & Lay Sopheavotey, Cambodianess

Cambodia: Cambodia-made travel goods no longer benefit from US's GSP as while US congress delay an extended act; unions call for labour reform & human rights respect

"Cambodia and More Than 100 Countries Lose Low Export-Tax Rate to the U.S.", 8 January 2021

Travel goods manufactured in Cambodia and exported to the United States no longer benefit from the low taxation rate provided by the US Generalized System of Preferences (GSP) scheme.

…, the Garment Manufacturers Association in Cambodia (GMAC) announced that the GSP scheme had expired …, due to the US Congress delaying the passing of the law to re-validate it. As many as 119 countries and territories and all their buyers and importers who export to the United States will now be taxed according to the most-favored-nation (MFN) status tariffs. This will be a challenge until the GSP scheme is re-validated, GMAC said.

"For Cambodia, garment products under MFN status are taxed about 12 to 33 per cent,” said Ath Thorn, president of the Cambodian Labour Confederation, … “GSP was more special than [MFN] as it sets a 0-tax exemption on travel goods and luggage. And other goods…are only taxed about 2 to 12 per cent.”

With the MFN status, goods exported from Cambodia to the US will be taxed about 10 to 30 per cent, Thorn said, adding that he was greatly concerned that the GSP scheme's expiration was affecting Cambodia's exports and especially travel goods such as handbags, suitcases and backpacks…

But he urged the Cambodian government to review and improve human rights, democracy, labor issues and policies in order to be ready to obtain the GSP scheme and any special preferential system from the US…

The suspension of the US GSP scheme comes as Cambodia no longer benefits from the European Union’s preferential trading scheme Everything But Arms (EBA)…