According to the Myanmar Times report on December 20: At a dialogue between the Myanmar Federation of Industry and Commerce (UMFCCI) and Vice President Myint Swe this week, Zaw Myint Win, Chairman of the Federation of Industry and Commerce, said that the EU May be prepared to revoke the Generalized System of Preferences (GSP) trade treatment granted to Myanmar. In this regard, the EU has clarified that contact with Myanmar on the GSP is still ongoing. The next dialogue will be held in early 2020, and the EU will review Myanmar’s progress in human and labor rights.
After the violence against Muslims broke out in Rakhine State at the end of 2018, the EU began to consider revoking the GSP treatment granted to Myanmar since 2013 and sent a research team Visit Myanmar to meet with local business people and labor organizations. GSP treatment grants duty-free trade between Myanmar and the EU, mainly including clothing trade.
Reports indicate that 60% of Myanmar’s products exported to EU member states come from the garment industry. Myanmar’s duty-free exports to the EU increased from 535 million euros in 2015 to approximately 2.3 billion euros in 2018. In 2018, 70% of the products exported using the GSP were in the apparel industry. If it is revoked, the industry most affected will be the apparel industry.
Min Soe, chairman of the Myanmar Garment Manufacturers Association, said that if the GSP is cancelled, Myanmar will have no choice but to find new markets and continue to export. “Our electricity situation has improved, and if areas such as shipping and labor productivity improve, we can still compete in the global market even without tax-free opportunities.” He added that banking services and fund settlement also need to improve. However, according to data from the association, if Myanmar no longer enjoys the GSP, the EU will impose a 12-15% tariff on exports of clothing from Myanmar. So Myint Soe believes that Myanmar must take other measures to remain competitive.
Currently, the EU provides trade GSP to Laos, Cambodia, Vietnam, Myanmar, and Bangladesh. If Myanmar’s treatment is revoked, Myanmar will have to compete with other countries in the international market. Competition among countries enjoying the Generalized System of Preferences.
