High U.S. tariffs hurt Cambodian garment sector

PHNOM PENH, Oct. 7 (Xinhua) -- High U.S. tariffs are hurting Cambodia's garment sector, with the industry complaining that high import costs and a slowing U.S. economy could sink the Kingdom's key industry, state media reported Tuesday.

In 2007, Cambodia paid 419 million U.S. dollars in tariffs on 2.46 billion U.S. dollars worth of exported goods, meaning the industry is paying an average 17 percent tariff, the Phnom Penh Post said, citing a new report by the Progressive Policy Institute, a centrist U.S. think tank.

The average U.S. tax on imports is 1.3 percent, while Saudi Arabia pays only 0.1 percent on the goods it exports to the U.S., the Post said.

Cambodia has already seen a 500 million U.S. dollars drop in exports to the U.S. in the first eight months of this year compared to the same period last year, said Kaing Monika, externalaffairs manager at the Garment Manufacturers Association of Cambodia (GMAC).

He added that the sector has suffered a loss of about 20,000 workers.

Garments have been hard hit by the U.S. slowdown, with clothing sales down in 2008.

Cambodia sells about 70 percent of its clothing to the U.S. market, making it highly vulnerable to fluctuations in the U.S. economy and Washington's trade policies.