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The global fashion business journal

17 Nov 201807:39

h Markets

EU weighs cuts to Myanmar trade preferences

A European Commission research team has travelled to the Asiatic country to begin a work of evaluation of the situation to decide on the exit of the country from the Generalized System of Preferences (GSP). 

31 Oct 2018 — 16:29
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EU weighs cuts to Myanmar trade preferences

 

 

Myanmar’s zero tariffs held at bay. A research team from the European Commission has traveled to the Asian country in order to start an evaluation work of the crisis Rohingyas are going through. The decision of the European Executive regarding Myanmar’s departure from the Generalized System of Preferences (GSP) will depend on said evaluation.

 

GSP is one of the elements included in the Everything But Arms (EBA) program, with which the European Commission allows the poorest countries in the world export to the European Union with hardly any tariff rates for all articles except weapons. Nevertheless, the communitarian Government demands that fundamental rights are respected.

 

Brussels sees trade preferences as a tool to put pressure on Myanmar’s government so that they respect Rohingya people’s rights. The European Commission added the Asiatic country in the GSP system back in 2013 and since then, it has favored many imports into the country, especially of clothing items. At the beginning of October, Brussels already warned Myanmar’s Executive of such regulation.

 

 

 

 

In fact, Myanmar has become during the last years one of the leading sourcing hubs for fashion as well after welcoming the support of European governments and the United States. Nowadays, companies such as Adidas, C&A, H&M, Mango, Inditex, Next and Primark source in Myanmar.

 

The country is not the only one from Southeast Asia that the European Union is weighing in detail. The systems of Cambodia and Bangladesh are also in danger. Last February, the European government also took into consideration Bangladesh’s labor conditions and their human rights policy in order to decide whether to maintain tariff benefits.

 

On the other hand, the European Executive has already started the process to retire Cambodia from the trade preference program. Brussels decided to penalize the country due to the celebration of elections which were considered unfair and illegitimate. 

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