Jade traders eye US
With the US lifting restrictions on jade, Myanmar traders are hoping to develop closer ties and gain some technical know-how.
IN terminating economic sanctions against Myanmar on October 7, the executive order signed by US President Barack Obama has opened the way to the resumption of the jade and gems trade between the two countries.
The abolition of the International Emergency Economic Act renders all related US legislation null and void, including the ban on importing Myanmar jewellery, jade and rubies, as well as on banking and revenue transfer transactions.
Free to export to the United States and Europe, Myanmar will no longer be tied solely to the Chinese market. Analysts predict a boost for an industry that has lately been in the doldrums because of a lack of interest among Chinese traders.
“We think the market will be better now that we have the opportunity to trade with the West, and if traders can export finished products openly and not through the black market,” said jade entrepreneur U Zaw Shan Lone. “We can produce more finished products, which would be better for the country. At present, the gems market is cold, but we hope everything will improve now that sanctions have been lifted,” he said.
The disappearance of sanctions will also have immediate and practical consequences.
According to the secretary of the Myanmar Gems and Jewellery Association, U Tun Hla Aung, gem prices can now be quoted in US dollars as well as euros at the Myanmar Gem Emporiums.
He added that Myanmar would now be able to export rubies and sapphires to the United States, and export more finished jade products rather than the raw jade.
Myanmar will invite the American Gem Trade Association (AGTA) to buy gems at the mid-2016 emporium to be held next month, and will request from them technical assistance, said U Win Htein, director general of the Department of Mines under the Ministry of Natural Resources and Environmental Conservation.
U Win Htein said the United States and other countries could buy Myanmar gems officially from gem emporiums, licensed gems and jewellery shops, gems expositions at Mogok organised by local residents, and international emporiums.
He said the likely results of the removal of sanctions would include acquiring the right to sell in the United States and elsewhere and transferring the funds thus generated in a banking system increasingly integrated with international trade, thus improving the government’s tax base.
U Aung Kyaw Win, deputy chair of the Yangon Region Gems and Jewellery Entrepreneurs Association, said the government should build on the US decision by amending exportimport and tax policies to strengthen its export sector. It was time to close down the illicit routes by which Myanmar gems were smuggled to Thailand, Sri Lanka, Hong Kong and India, he said.
Talks have already begun on ways of expanding jade and gems sales.
U Aung Kyaw Win said new government policies should take into account the needs of ethnic entrepreneurs wishing to trade internationally. He called for the establishment of vocational training schools to provide entrepreneurs with human resources and the development of value-added, higher-priced gems and jewellery products.
The Yangon Gems and Jewellery Entrepreneurs’ Association has drawn up a master plan and submitted it to the Ministry of Natural Resources and Environmental Conservation, as well as to the Central Bank and the ministries of commerce and finance.
The plan envisages a 10-year project to improve the quality of finished products. During the first three years, 30 percent of raw materials must be converted to finished products for export, rising to 50pc within five years, then 75pc and rising to 100pc by the end of the plan period. The plan also proposes recommendations to ease free trade, raise tax revenues and adopt anti-smuggling measures. The start date would be 2017.
“Unless we have a program, we will not be able to turn raw materials into finished products,” he said. The adoption of a government program covering jade, gems and precious metals backed by entrepreneurs would help eliminate illicit trade in gems and jade, he said.
Trade improvement director U Aung Soe said the National Export Strategy entailed long- and shortterm programs covering the jade and gems sectors that would ease export procedures in the wake of the removal of sanctions. “The gems market will expand, and trade will improve,” he said. “The American Gem Association last week told us they wanted to buy and distribute Myanmar gems. Foreign buyers can attend the gems exhibition and we are discussing direct exports with the Ministry of Resources.”
Making the most of the bigger international market would mean improving design and quality.
“Instead of selling cheap badquality jade to Thailand, entrepreneurs should study techniques for improving quality and generating sales. We must be ready to compete in a more open market,” he said. – Translation by Win Thaw Tar
and Khine Thazin Han
Jade traders are hoping that gaining access to the US market will help offset the trade slowdown with China.