doing business in myanmar – what you need to know as a singaporean
Boris Johnson’s government says Britain will maintain Myanmar’s access to the UK market after Brexit goes ahead, whether or not the EU decides to withdraw trade preferences because of human rights violations.
“Regardless of how we exit the EU in October, the UK is committed to maintaining GSP [Generalised Scheme of Preferences] standards for Myanmar for at least two to three years, which is great,” Warren Pain, the British embassy’s head of trade and investment, told The Myanmar Times.
Under the EU “Everything but Arms” (EBA) trade agreement, Myanmar enjoys tariff-free access to the bloc for all exports except weapons and ammunition. Mr Pain’s statement, made in an interview in Yangon, revealed how a post-Brexit Britain – the second biggest economy in Europe – would be prepared to forge its own foreign and trade policy with third countries.
However Mr Pain emphasised that the UK saw the current trade arrangement as responsible and ethical and that its decision to maintain GSP was not intended to send a signal about future divergence from EU foreign policy.
“It’s all about the responsibility and not a political position in terms of our relationship with the EU and not [about] wishing to diverge from current policies. We honestly think that this is the right ethical approach at this stage and time,” he said.
Myanmar exported about £340 million (US$415 million) of goods and services to the UK last year, mainly garments, frozen fish, and food products, he said. “As a result of our crashing out from the EU or otherwise we wouldn’t want this opportunity for Myanmar to be lost,” he went on.
Mr Pain added that work is “in progress” in a number of policy areas and there are still details to be finalised, but the UK will maintain the same standards with Brussels in many areas of regulation and coordination while strengthening ties with Myanmar on a bilateral basis.
Historian Thant Myint U, who previously called revoking GSP privileges “an unmitigated disaster that must be avoided”, told The Myanmar Times on Friday that what was important is “not the symbolism, the messaging, or even the immediate direction of Anglo-Myanmar ties.”
“What’s important is that hundreds of thousands of otherwise impoverished young women receive fair wages for dignified work. All policies should be judged on the basis of how they affect the poorest and most vulnerable,” he said.
An estimated 520,000 workers are directly employed in the garment industry. Europe’s market share is expected to reach 60pc this year.
The EU is “monitoring” the state of human rights in Myanmar following the crisis in northern Rakhine before it decides whether to start the process of withdrawing the trade privileges it granted in 2013 to provide support for the country’s democratic transition. A formal withdrawal process will include a six-month review period for Myanmar to demonstrate progress.
More than 700,000 Muslims have fled northern Rakhine to Bangladesh since late 2017 following a crackdown by the military in response to attacks by the Arakan Rohingya Salvation Army.
Mr Pain said a post-Brexit UK would be much more free to work with Myanmar and ASEAN on a bilateral basis. The UK is scheduled to leave the EU on October 31.
However he said British investors should be “very careful, wary and conscious of who your partners are” when entering the Myanmar market “with enhanced due diligence”, particularly in light of the UN Fact-finding Mission’s report published in early August.
The report sought to detail how the military has used its own businesses, foreign companies and arms deals to “support brutal operations against ethnic groups that constitute serious crimes under international law, bypassing civilian oversight and evading accountability.” It urged foreign investors to sever ties with Myanmar’s military and its web of companies. The Myanmar government rejected the findings.
A separate UN Fact-Finding Mission report released a year ago favoured sanctions targeted at officials and military officers responsible for rights violations in Myanmar but opposed general economic sanctions out of concern that “such sanctions in the past may have contributed to the impoverishment of the Myanmar people generally while having little impact on those most responsible for serious human rights violations”.
The UK’s decision on keeping trade privileges is likely to be welcomed by human rights group and businesses, who have warned the EU that stripping Myanmar of GSP would endanger hundreds of thousands of jobs – mostly held by young women – while leaving the country’s military leaders unscathed.
Six European business chambers in Yangon told Brussels that removal of tariff-free access “will undoubtedly have a detrimental impact on the most vulnerable people in Myanmar while also closing the door to the spread of European standards with regard to responsible business.”
Military interests are not entrenched in the garment industry, lobbyists and pressure groups argue.
“Military companies have had very little involvement in the garment sector since they realised after their early forays in the early 90s with the Daewoo JV [joint venture] making shirts that it’s hard work and low margins compared to beer and cigarettes,” commented Vicky Bowman, director of Myanmar Centre for Responsible Business.
The latest UN mission report identifies three industrial zones managed by military-owned conglomerates Union of Myanmar Economic Holdings and Myanmar Economic Corporation.
“This has prompted certain garment brands to dig deeper into the precise ownership and management arrangements and ‘follow the money’, and frankly this is something that they all should have covered in initial due diligence,” Ms Bowman explained.
Human rights organisation Burma Campaign UK director Mark Farmaner called the UK’s decision “very good news for garment and factory workers.”
“The EU approach of threatening to remove EBA, which will mainly impact garment workers, while at the same time refusing to sanction military companies, makes no sense whatsoever.”
Myanmar’s trade preferences would depend on implementation of the Kofi Annan-led Advisory Commission on Rakhine and humanitarian access and situation of IDPs across the country, among other issues, the EU spokesperson said in March.
Source: Myanmar Times
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