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Abstract
Adopting an analytical approach grounded in the literature on the impact of industrial relations (IR) systems on foreign direct investment (FDI) decisions, this article assesses the workplace practices in Hong Kong-invested garment factories in the regulated IR system in Cambodia. Cambodia opened up FDI in 1993. The country has attracted FDI in light manufacturing, mainly in the export-orientated garment and footwear sectors. The USA is the largest trade partner of Cambodia in garment exports because of a unique agreement, US-Cambodia Trade Agreement on Textile and Apparel. The Agreement granted a quota for Cambodian garment export in return for better compliance with international labour standards. The trade agreement and private sector initiatives have combined to bring about a “labour advantage” in Cambodia. This labour advantage will continue to be its competitive edge in a post-Multifibre Agreement world, and other developing countries may well follow Cambodia's model.
Acknowledgement
This article draws on data from a multi-country project supported by the Research Grants Council of Hong Kong (Project No. CityU1268/03H). Earlier versions of this paper were presented at the 1st Annual Meeting of the Asian Studies Association of Hong Kong, 21-22 January, 2006 and the Symposium on Hong Kong Investors in the Southeast Asian Supply Chain: Workplace Standards, Fair Trade and Globalisation, 10 July 2006. The author thanks Stephen Frost and Mary Ho for their research assistance, and Kevin Hewison and Bill Taylor for their research collaboration.