EU Once Again Considers Abolishing Trade GSP Treatment In Burma

According to the Burma times December 20th, this week at the dialogue between Burma Federation of industry and Commerce (UMFCCI) and vice president min Rui, the president of the Federation of industry and commerce, Zuo min Wen, said that the EU might be prepared to withdraw the treatment of the trade GSP (GSP) granted to Burma. The EU has clarified that contacts with Burma on trade GSP are still in progress, and the next dialogue will take place in early 2020. The EU will review Burma's progress in human rights and labour rights.

After the outbreak of violence against Muslims in Burma at the end of 2018, the European Union began to consider the cancellation of the trade GSP treatment granted to Burma in 2013, and sent a research team to visit the local businessmen and ILO. GSP treatment gives Burma and EU a tax free trade, mainly including clothing trade.

The report said that 60% of the products exported to EU member countries in Burma came from the clothing industry. Burma's duty-free exports to the EU increased from 535 million euros in 2015 to about 2 billion 300 million euros in 2018. In 2018, 70% of the trade GSP export products were the garment industry. If cancelled, the biggest industry will be the garment industry.

If the abolition of the GSP is abolished, Burma will have no choice but to find new markets and continue to export, said min Su, chairman of the Burma Garment Manufacturers Association. "Our electricity situation has improved. If there is improvement in shipping and labour productivity, even if there is no tax exemption, we can still compete in the global market." He added that bank services and capital settlement also need to be improved. However, according to the association's data, if Burma does not enjoy the GSP, the EU will impose 12-15% tariffs on Burma's export garments. Therefore, Burma believes that other measures must be taken to maintain competitiveness.

At present, the EU provides trade GSP to Laos, Kampuchea, Vietnam, Burma and Bangladesh. If Burma's treatment is revoked, Burma will have to compete with countries enjoying GSP in the international market.