NEW TRADE AGREEMENT EU-MYANMAR
As of 19 July, Myanmar/Burma is set to benefit once again from a special, advantageous trade arrangement with the EU after the country’s recent efforts to improve the political, social and labour environments there. The EU will bring the country back under the so-called ‘Everything But Arms’ preferential trade regime which will grant duty-free and quota-free access to the European market for all products except for arms and ammunitions.
The trade preferences for Myanmar/Burma will be applied retroactively as of 13 June 2012, the day when the International Labour Organisation (ILO) Conference first recognised progress in the labour rights situation in Myanmar/Burma. The EU’s trade preferences had been suspended in 1997 as a result of the country’s serious and systematic violations of core international conventions on forced labour.
‘Everything But Arms’ is part of the EU’s ‘Generalised Scheme of Preferences’. It is important for helping developing countries boost their economy by providing them with tariff preferences for their exports to the EU. Myanmar/Burma will benefit from the ‘Everything But Arms’ scheme because the United Nations classifies it as a ‘Least Developed Country’ (LDC).
EU Trade Commissioner Karel De Gucht said: “Trade is fundamental to supporting political stability and the EU’s trade preferences mean we will give this reform-minded country priority access to the world’s largest market. This has the potential to make a huge difference to the country’s economic development and to bring real benefits to the people there. The EU is also going to help Myanmar boost the capacity of both public and private firms to make use of these new opportunities.”
The Council and the European Parliament signed the legislation on the re-admittance of trade preferences on 12 June. The agreement came on the heels of the Council’s earlier decision on 22 April 2013 to lift all sanctions against Myanmar/Burma, except for the arms embargo. The Commission believes that, despite the many structural constraints the country continues to face, under the ‘Everything But Arms’ preferential trade regime Myanmar/Burma should see an increase in exports to the EU.
What is next?
The legal act to re-instate the trade preferences was published in the Official Journal of the European Union on 29 June. This legal act stated that the preferential trade scheme enters into force twenty days later, i.e. on 19th July.
As the International Labour Organisation (ILO) Conference officially recognised progress in the labour rights situation in Myanmar/Burma’s on 13 June 2012, the trade preferences for Myanmar/Burma will be applied retroactively as of that date. It was the ILO’s decision which allowed the EU to launch its reinstatement procedure (IP/12/971).
Subject to the retroactive submission and approval of the relevant certificate of origin, exporters in Myanmar/Burma will be able to claim back the import duties paid since 13 June 2012.
EU-Myanmar/Burma trade in facts and figures
Myanmar/Burma exports to the EU totalled €164 million in 2012 —this is approximately 3% of the country’s total exports to the world, and 0.01% of the EU’s total imports. These limited exports to the EU are concentrated on clothing.
Since 1971, the Generalised Scheme of Preferences (GSP) has allowed developing countries to pay lower import tariffs on some or all of their exports to the EU.
There are three main variants (arrangements) of the scheme:
- the standard GSP scheme, which offers generous tariff reductions to developing countries. Practically, this means partial or entire removal of tariffs on two thirds of all product categories.
- the “GSP+” enhanced preferences means full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement international conventions relating to human and labour rights, environment and good governance;
- “Everything but Arms” (EBA) scheme for least developed countries (LDCs), which grants duty-free quota-free access to all products, except for arms and ammunitions.
The EU has adopted a reformed GSP law on 31 October 2012 – (IP/12/1168) which provides additional export opportunities to those most in need, amongst which LDCs feature prominently. In order to allow ample time for economic operators to adapt to the new scheme, the new preferences will apply as of 1 January 2014.
Preferential access to the EU market can be suspended if beneficiary countries engage in serious and systematic violations of core human rights or labour rights conventions, as established by the competent monitoring bodies of the United Nations or the International Labour Organisation.