Cambodia wants its exports to the US to be given duty- free and quota-free access. Cambodia wants the US to provide Generalised System of Preferences to at least 97 per cent of its commodities, with tariff exemptions and quota-free access, in accordance with the previous agreement under the WTO framework.
At a 2005 meeting of the World Trade Organisation, developed nations had pledged to provide extend duty-free and quota-free status to at least 97 per cent of products originating from less developed countries. Many developed economies, including Australia, Canada and the EU, have enacted special programs that extend duty- and quota-free treatment to all imports from LDCs with the exception of arms.
The US currently provides duty-free status to over 5,000 types of products produced in Cambodia as part of its Generalised System of Preferences program. It granted Cambodia GSP trade privileges in 1996 along with the Most Favored Nation (MFN) status, which reduces tariffs on eligible products.
The combination of GSP and MFN has allowed many Cambodian products to access the US market, making them more price competitive against the products of countries that do not enjoy the privileges. However, the GSP program does not cover Cambodia’s largest export category by value -- garments. They are covered under the MFN scheme, which requires importers to pay a tariff of around 10 to 15 per cent.