IN FEAR OF negative impacts on the nation’s growth and the grass root population over European Union’s potential withdrawal of its generalised scheme of preferences (GSP) from the country, Myanmar officials and businesses have requested the EU to reconsider the move.
Aung Naing Oo, director general at the Directorate of Investment and Company Administration, said the EU’s decision could have a big impact on Myanmar’s reforms and growth momentum, as thousands of |workers would lose their jobs if factories close and foreign businesses leave.
“If EU decides to withdraw the GSP, it will be hard for Myanmar producers to export their goods to European countries. And foreign investors may hesitate to do business here, leading to a fall in job creation,” he said.
“Obviously, it is not something that helps Myanmar. FDI will take a hit, people will lose jobs and it may slow down our reforms. But, we believe EU is a true and sincere partner and they will reconsider it.”
The official said the EU’s decision could be a big blow to Myanmar’s efforts to promote foreign direct investments. He requested the bloc to reconsider its planned punishment on Myanmar for alleged human right violations in three of the nation’s states where ethnic people reside.
Currently, products from Myanmar enjoy tariff-free and quota-free access to the European markets, with the exception of arms and ammunition. In 2013, the organisation reinstated GSP for Myanmar to support its transition to democracy.
Following a monitoring mission’s visit to the nation in late October 2018, EU Commissioner for Trade Cecilia Malmstrom announced a plan to consider a temporary GSP withdrawal, due to the findings. “Withdrawal of trade preferences is a clear possibility if other channels of cooperation have failed to reach results,” European Commission said in a statement dated October 31, 2018.
Zaw Min Win, president of the Union of Myanmar Federation of Chamber of Commerce and Industry, said local businesses need trade preference to export their goods to European countries, IT is the third largest export market of Myanmar, absorbing nearly 10 per cent of the nation’s total exports in 2017.
“UMFCCI has appealed to the EU authorities to keep the GSP privileges granted to Myanmar. Our labour market is still underdeveloped, it will mainly affect the grass-roots people if factories are closed,” he said.
Khine Khine Nwe, joint secretary general of UMFCCI and general secretary of Myanmar Garments Manufacturers Association, went to the EU office in Brussels recently to request the bloc maintain its trade privileges for Myanmar. She held discussions with EU authorities, including director generals for trade and employment.
“EU authorities expressed goodwill towards Myanmar. They were keen to learn more about the future of the garment industry here,” she said.
Khine Khine Nwe reiterated that maintaining the GSP privileges would strengthen Myanmar and speed up its pace of development.
“We pledged to promote core labour standards in Myanmar in conjunction with the recently-signed Decent Work Country Programme2018-21. Our sustained access to EU’s trade privileges compliment this programme,” she said.
Maung Maung, president of the Confederation of Trade Unions Myanmar, said more than one million workers from garment and fishery industries could be affected if the EU decides to revoke the trade preference.
“Hundreds of thousands of workers may lose their jobs and their families will be in trouble. That is why we appealed to the EU in cooperation with UMFCCI and other organisations,” he said.