tailieunhanh - Cambodia’s garment industry – Origins and future prospects

The paper, written largely before Multi-Fibre Agreement (MFA) quotas on developing country exports of textiles and garments were removed on 31 December 2004, argues that Cambodia’s garment industry is well placed to withstand the increase in competition in its export markets that quota removal has brought. This conclusion is highly significant for the Cambodian economy, over 80% of whose exports now consist of garments. | Cambodia s Garment Industry -Origins and Future Prospects Omar Bargawi Economic and Statistics Analysis Unit October 2005 ESAU Working Paper 13 Overseas Development Institute London The Economics and Statistics Analysis Unit has been established by DFID to undertake research analysis and synthesis mainly by seconded DFID economists statisticians and other professionals which advances understanding of the processes of poverty reduction and pro-poor growth in the contemporary global context and of the design and implementation of policies that promote these objectives. ESAU s mission is to make research conclusions available to DFID and to diffuse them in the wider development community. ISBN 0 85003 770 0 Economics and Statistics Analysis Unit Overseas Development Institute 111 Westminster Bridge Road London SE1 7JD Overseas Development Institute 2005 All rights reserved. Readers may quote from or reproduce this paper but as copyright holder ODI requests due acknowledgement. ii Contents Acknowledgements v Acronyms v Executive Summary vii Chapter 1 Introduction 1 Background effects of the Multi-Fibre Agreement 1 Research objectives and methodology 2 Data 3 Chapter 2 Industry Origins Structure and Performance 4 Industry origins 4 Industry structure 6 Industry performance 9 Chapter 3 Industry Prospects 11 Economic modelling of ATC impact 11 Cambodia s ability to absorb price falls relative quota restrictiveness and ETEs 14 Recent trade performance under the ATC 19 Analysis of wider production costs industry productivity and profitability 22 Chapter 4 Conclusions Impact of ATC on Exports and the Economy 27 Bibliography 29 Annex 1 The WTO Agreement on Textiles and Clothing ATC 32 Annex 2 Selected GTAP studies of ATC impact 33 Annex 3 Suppliers to US subject to US T G Import Quotas in 2003 34 Figures Fig. Cambodia - Garment industry investment approvals 6 Fig. Garment industry ownership 2000 7 Fig. Garment exports to US