Thanks to the US President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership (TPP), Cambodia’s domestic garment and footwear industry is expected to get a boost, according to the Garment Manufacturer’s Association of Cambodia (GMAC).
Trump’s lack of support for the TPP has caused other signatories to voice doubt over the partnership. On November 19, the Vietnamese government signaled that without US support, it would not seek to ratify the TPP in Parliament. Japanese Prime Minister Shinzo Abe has called the TPP meaningless, without the US on board. Kaing Monika, GMAC deputy secretary-general has said the US withdrawal would return Cambodia to closer parity with neighboring Vietnam, a signatory of the free-trade agreement. He clarified that if the US withdraws, the TPP would be dead because at least six member countries that account for 85 per cent of the combined GDP of the 12 nations must ratify the agreement. This needs both US and Japan.
In the absence of TPP, Cambodia is put back to the earlier position of competing against Vietnam, both on the FDI and export market fronts. But on the other hand, if the TPP is implemented it would not only affect Cambodia’s exports to the US but also other markets like Canada and Japan where the country similarly exports a substantial amount. The 12-country agreement was signed in February, a highlight of current US President Barack Obama’s time in office but is yet to be ratified by any country. If it comes into effect, 12 Pacific rim countries will enjoy free-trade arrangements aimed at boosting their economic partnerships, and it is seen by many as a check to Chinese influence in the region.