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Cambodian Trade Deal Renewed With Labor Caveat

<CS:BOLD>WASHINGTON -- The Bush administration has renewed its bilateral textile agreement with Cambodia this week and carried forward its controversial provision on labor.<BR><BR>Negotiators had faced difficulties in forging a new agreement in the...

WASHINGTON — The Bush administration has renewed its bilateral textile agreement with Cambodia this week and carried forward its controversial provision on labor.

Negotiators had faced difficulties in forging a new agreement in the first round of talks in early December, but finalized the renewed agreement on Dec. 31, according to a U.S. trade official.

“We’re pleased with the agreement,” said the trade official, speaking on condition of anonymity. “We started out in Cambodia with only two days of talks and we couldn’t bridge the gap.”

He noted that Cambodian officials were asking for increases in quota levels ranging from 40 to 100 percent for all categories.

“That’s pretty extreme,” he said. “They settled for something more realistic.”

Cambodia is the 18th-largest supplier of apparel and textiles to the U.S., with an import value of $910 million for the year ending Oct. 31, according to Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.

In the new agreement, the U.S. has increased from 14 to 18 percent the annual quota eligibility cap based on improvements in labor standards. But officials have not yet announced whether they will grant Cambodia an increase this year.

Under the 1999 textile and apparel pact, Cambodia was eligible for a 14 percent annual increase, on top of annual standard quota growth rate increases, in apparel and textile exports contingent on improvements in working conditions and labor standards.

The U.S., which reviews the standards with the help of International Labor Organization monitoring, has never granted Cambodia the full increase in quotas due to improvements in labor standards. In 2000 and 2001, Cambodia received a 9 percent increase each year in apparel and textile quota categories across the board for labor improvements.

Trade negotiators have also put quotas on a new category of Cambodian exports — women’s wool coats — according to the trade official. They also increased quotas in men’s and women’s cotton knit shirts by 7 percent.

The growth rates on apparel and textile imports from Cambodia are 6 percent for non-wool items and 1 percent for wool products.

Linking trade to labor standards has angered retailers and other apparel importers because they contend that measuring improvements is subjective. On the other side, organized labor and human rights groups are pressing for standards for the dual purpose of raising conditions in developing countries, while preventing them from exploiting their land or workforce for competitive advantages.

“Unless they had a major renegotiation of the language of labor provisions, we’re disappointed,” said Hughes of the USA-ITA. “One of the pressing issues is, if you link labor to textile and apparel trade, there needs to be specific criteria to determine when Cambodia is in compliance or not.”