Trade GSP can’t turn prof­its yet

The Myanmar Times - - Front Page - – Trans­la­tion by Zar Zar Soe and Win Thaw Tar HTIN LYNN AUNG htin­lyn­naung@mm­times.com

In­dus­try ex­perts say goods on the US Gen­er­alised Sys­tem of Pref­er­ences ex­port scheme will not see a rapid turn­around in prof­its as the pref­er­en­tial tar­iffs start this month.

SOME 5000 goods from Myan­mar have been granted classification un­der the United States Gen­er­alised Sys­tem of Pref­er­ences ex­port scheme, how­ever this will not see a rapid turn­around in prof­its, say in­dus­try fig­ures.

The United States trade rep­re­sen­ta­tive body an­nounced on its of­fi­cial web­site that pref­er­en­tial tar­iffs un­der the Gen­er­alised Sys­tem of Pref­er­ences scheme were to be re­in­stated. This took ef­fect on Novem­ber 13, af­ter a 27-year sus­pen­sion.

The Min­istry of Com­merce said that goods in­cluded un­der the new GSP pro­to­col in­clude rat­tan and rat­tan fur­ni­ture, wooden fur­ni­ture, as well as luggage and back­packs.

One lo­cal tim­ber ex­porter ob­served that, so far, there are no di­rect US buy­ers for Myan­mar’s wooden prod­ucts. The ma­jor­ity of these prod­ucts make their way onto the US mar­ket through third coun­tries like Sin­ga­pore, Hong Kong, Thai­land and Malaysia, he said. A lack of avail­abil­ity of in­ter­na­tional bank­ing ser­vices is ham­per­ing wouldbe ex­porters, he said, not­ing that it is all but im­pos­si­ble for Myan­mar pro­duc­ers to reap any real ben­e­fits un­der the GSP at present.

“I went to the US last April to try to make con­nec­tions with di­rect buy­ers there,” tim­ber ex­porter Sein Win told The Myan­mar Times. “But, at the mo­ment, we have to trade through in­di­rect mar­kets – though we can seek di­rect buy­ers later. I was granted per­mis­sion for ex­port­ing tim­ber fin­ished prod­ucts to US about two years ago,” he said.

“Now tim­ber prod­ucts are on the list of goods granted pref­er­en­tial tar­iffs. But we have yet to get di­rect buy­ers and it is more con­ve­nient to link with re­li­able buy­ers through in­di­rect mar­kets,” he said.

Like­wise, it is un­likely that the pref­er­en­tial tar­iffs scheme will see any ma­jor changes for rice pro­duc­ers. This, Myan­mar Rice Fed­er­a­tion vice chair Soe Tun ex­plains, is prob­a­bly due to a lack of de­mand.

“Amer­ica is not a coun­try where its cit­i­zens are eat­ing rice. So, the mar­ket is not large. Cur­rently there is no rice ex­port to Amer­ica and that’s why there is not any spe­cial con­ces­sion for the rice sec­tor,” he said.

Sources within the Myan­mar Rice Fed­er­a­tion in­di­cate that, al­though one Myan­mar rice ex­porter sent about 10,000 tonnes of Paw San Mway rice to the US, it had been found to be a less prof­itable ven­ture than other over­seas mar­kets. Sim­i­larly, it seems un­likely the reg­u­la­tory shake-up will im­pact the marine prod­ucts sec­tor sig­nif­i­cantly.

“The marine prod­ucts sec­tor al­ready has tax re­lief from the US,” said Toe Nan­dar Tin, a marine prod­ucts ex­porter. How­ever, Direc­torate of In­vest­ment and Com­pany deputy director gen­eral U Than Aung Kyaw says there is rea­son to be op­ti­mistic. Ad­dress­ing the me­dia on Novem­ber 15, he said he be­lieves ex­ports to the US mar­ket will be on the in­crease in light of the changes to the GSP.

How­ever, he noted, Myan­mar may have some catch­ing up to do in terms of meet­ing in­ter­na­tional stan­dards.

“They de­fine the qual­ity of the prod­ucts which will be ex­ported. Only once we can fol­low these norms, we will get this chance,” U Than Aung Kyaw said. The Min­istry of Com­merce has an­nounced that Myan­mar-Amer­i­can trade is set to in­crease. Dur­ing the 201516 fis­cal year, trade be­tween the US and Myan­mar was worth more than US$88 mil­lion in ex­ports and over $187 mil­lion for im­ports.

Photo: Kaung Htet

A farmer pre­pares a rice paddy field for har­vest.

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