Withdrawal of EU perks may eliminate 400,000 jobs: officials
IF the European Union removes Myanmar’s trade benefits under the Generalised Scheme of Preferences (GSP), garment factories could close and almost 400,000 garment workers be thrown out of work, business and labour leaders warned.
U Khin Maung Aye, managing director of Lat War garment factory, said the garment industry and labour unions are urging the EU to reconsider its plan to revoke the country’s GSP benefits because such a move would have nothing to do with Myanmar’s political situation.
Representatives of a EU mission met with local businessmen and labour union leaders in Yangon on Monday to discuss the removal of the country’s preferential trade status, as a punitive measure for the failure of the government to resolve the humanitarian crisis in northern Rakhine State.
U Khin Maung Aye, who attended the meeting, said the garment factory owners expressed strong reservations about the plan.
“We may fold if the GSP is removed,” he said, adding that such a move could stifle growth in a sector that is just now recovering from a slump.
According to the International Labour Organisation and Myanmar Garment Manufacturers Association, the textile and garment industry in Myanmar employs nearly 700,000 people – 90 percent of them women – and generates about US$2.7 billion (K4.29 trillion) in foreign exchange, second only to oil and gas exports last year.
The EU accounted for US$1.8 billion, or 72pc, of Myanmar’s garment exports last year.
But U Khin Aung Aye admitted that the GSP removal would not have an immediate effect on the industry.
“Our concern is we how long we can survive before we rise again,” he said.
U Naw Aung, vice chair of Myanmar Industries Craft and Services Trade Union Federation, who was also at the meeting, said the country’s labour sector is unstable and the removal of GSP benefits would hit the garment industry hardest, not the government or the military. He said the move could affect the democratic transition and the lives of ordinary people.
“People will go deeper into poverty,” U Naw Aung warned.
U Zaw Htay, spokesperson of the President’s Office, said on Monday the EU must understand that Myanmar’s democratisation, peace process and other reforms will be affected by such a move.
“Sanctions should not burden the people. The EU must understand our political situation,” he said.
– Nyan Lynn Aung
Myanmar workers at the Shweyi Zabe garment factory in Shwe Pyi Thar industrial zone in Yangon in September 2015.