Entrepreneurs plan to contact European embassies to request the EU not revoke GSP, said Daw Khine Khine Nwe, the joint general secretary of the Republic of the Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI).
The GSP is the Generalised Scheme of Preferences, a designation in which the EU allows developing countries to pay fewer or no duties on exports to the EU.
“We are going to contact the European embassies soon,” she added.
Among the products sent to the EU, Myanmar’s garment sector accounts for 72 per cent of exports. Should the EU revoke the GSP, it can adversely affect the entire environment related to the garment sector, according to business leaders.
Moreover, there are over 500,000 labourers in the garment sector, who are remitting US$ 32 million from their salaries to their families. In the event of the EU revoking the GSP, it can have a dramatic impact upon these opportunities, said Daw Khine Khine Nwe.
“The labourers are remitting certain portions of their earnings, amounting to $65 or $70 each, to their families. Most of the labourers are working in Yangon. Among them, 19 per cent of labour comes from Rakhine State. When we do the calculations, an estimated $ 6.1 million are being remitted to Rakhine State. So, we want them to know that the garment sector, which is a great source of income, is contributing materially to the families,” he added.
There are over 500 garment factories in Myanmar, 65 per cent of which are owned by foreign investors. Among them, 60 per cent of the garment owners are Chinese citizens and export garments mainly to European countries.
In 2018, Myanmar exported $930 million in garments to Germany, $323 million to the UK, $294 million to Spain, $266 million to France, $158 million to Denmark, $157 million to Italy and $145 million to the Netherlands.
The EU granted the GSP to Myanmar in 2013. However, EU trade commissioners announced on 5 October that they will send a commission to Myanmar to evaluate the lifting of the GSP due to the affairs in the Rakhine State.
An EU Trade investigation team visited Myanmar during the last week of October to observe human rights issues, including in Rakhine State, as well as review trade disputes between employees, and working conditions. During the visit, they met with government ministries, the garment labourers, labour unions, members of UMFCCI and other societies and organizations.
The EU Trade investigation team will submit for discussions their findings to the EU Parliament, after which the EU will make a decision in regard to GSP matters based on their findings, evaluations and recommendations.
Once before the EU revoked the GSP for Myanmar in 2003. After 10 years, they granted GSP privileges again in 2013.
By Nyein Nyein