19 Sep, 2012
E.C. Set to Restore Preferential Trade With Myanmar
Brussels, 17 September 2012, European Commission Press release – Myanmar is set to benefit once again from a special, advantageous trade arrangement with the EU following recognition by the international community of the country’s recent efforts to improve the political, social and labour environments there.
Today the European Commission has adopted a proposal to bring the country back under the so-called ‘Everything But Arms’ preferential trade regime which would grant duty-free and quota-free access to the European market for all products except for arms and ammunitions.
‘Everything But Arms’ is part of the EU’s ‘Generalised System of Preferences’ and an important scheme to help developing countries boost their economy by providing them with tariff preferences when selling on the EU market. Myanmar/Burma would benefit from the ‘Everything But Arms’ system because it is classified as a ‘Least Developed Country’ (LDC) by the United Nations.
EU Trade Commissioner Karel De Gucht said: “Since Myanmar/Burma started to open up earlier this year I saw the need to underpin such deep and important changes with real economic support once key improvements for the workforce had been met. 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. That said, we will continue to engage with Myanmar/Burma to encourage continued progress on all fronts.”
After many years of international isolation, the EU believes the unprecedented developments now mean the time is right for Europe to open a new chapter in its relations with this South-East Asian country. The Commission believes that, despite the many structural constraints the country continues to face, Myanmar/Burma should see an increase in exports to the EU market under the ‘Everything But Arms’ preferential trade regime.
In 1997, the country was suspended from the GSP scheme as a result of the country’s serious and systematic violations of core international conventions on forced labour.
In June this year, the International Labour Organisation (ILO) concluded that significant progress had been achieved by Myanmar/Burma, although some residual problems with forced labour persist. On this basis, EU law foresees that preferences should be reinstated.
What is next?
The Proposal is subject to the ordinary legislative procedure (OLP), hence the proposal will be submitted simultaneously to the Council and the European Parliament (EP) for agreement. The Commission hopes that a positive decision can be taken as quickly as possible.
EU-Myanmar/Burma trade in facts and figures
Myanmar/Burma exports to the EU totalled €169 million in 2011—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.
Background
Since 1971, the Generalised System of Preferences (GSP) has allowed developing countries to pay lower import tariffs on some or all of their exports to the EU.
The current GSP scheme covers three elements:
- the general GSP arrangement which provides for import tariff reductions for 176 developing countries and territories.
- the special incentive arrangement for sustainable development and good governance (known as GSP+). This offers additional preferences to support vulnerable developing countries in their ratification and implementation of international conventions in the field of human and labour rights, sustainable development and good economic governance.
- the ‘Everything But Arms’ arrangement which provides for complete access (duty-free and quota-free) to the EU market save for arms and armaments for the 48 Least-Developed Countries as defined by the United Nations.
The current GSP scheme will expire on 31 December 2013. In June 2012, the European Parliament and the Council reached an agreement to modify the current GSP scheme. The new GSP preferences are due to enter into force on 1 January 2014, and provide additional export opportunities to those most in need, amongst which LDCs feature prominently.
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.
Useful links
On the ‘Generalised System of Preferences’
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