Cambodian exports to the US from January through June rose by 4.5 per cent compared to the same period in 2016. The vast majority of Cambodia’s exports to the US are garment and footwear products. Cambodian travel goods can enter the US duty-free. The US is one of the world’s largest markets for travel goods. In July 2016 the US removed customs tariffs on Cambodian-made travel products such as luggage, backpacks, handbags and wallets. The items, which previously faced tariffs of between 4.5 and 20 per cent, now enter the US duty-free.
This provision has effectively doubled the size of Cambodia’s travel goods exports in just over a year. Right now, the value of Cambodia’s exports of travel goods is over a $100 million, with the majority exported to the US. However, it could take years before the country sees full benefits of the duty-free privilege. New investors have to be attracted to establish production in Cambodia. Once that happen the country’s exports of travel goods to the US may see a significant increase and contribute a larger export value.
Cambodia plans to submit a GSP duty-free exemption application for its footwear industry. If it’s accepted, it would reduce trade-weighted average for footwear export duties that sits at 10.8 per cent globally.