Myanmar at losing end in border trade disagreements: leaders
MYANMAR must take steps to negotiate bilateral trade agreements with its neighbours to avoid volatility in border trade with China and India, as the consequent losses for locals can be huge.
“There is currently no precise policy for border trade. Every country should have a policy to deal with trade disagreements and volatility. Right now, Myanmar is on the losing end with little power to deal with trade issues,” said Dr Maung Maung Lay, vice chair of the Union of Myanmar Federal Chamber of Commerce and Industry.
“There is unfinished business and no discussion on how to prepare for future disagreements. Those in ministry do not have the capacity to handle border trade issues. We need better leadership on this front,” he added.
Border trade with China accounts for about 70 percent of all trade between Myanmar and its neighbours. It also involves high volumes of Myanmar agricultural produce. Almost all Myanmar maize is exported to China, for example. Yet, there are no existing policies or bilateral agreement dealing with trade disruptions or disagreements between the two countries.
This has resulted in frequent volatility leading to losses in Myanmar. For example, more than 1500 fruit trucks were stranded at the Myanmar-china border between Christmas and the new year due to the closure of Kyin San Kyawt gate near Muse.
Kyin San Kyawt gate, which is about 10 miles from Muse’s 105th mile trade zone, was shut down by a Myanmar military company for security reasons on December 27. However, local merchant associations received no prior warning or official notice, U Sai Myint Bo, chair of the Fruit Wholesale Centre at Muse trade zone told The Myanmar Times.
Due to the disruption in trade, Myanmar traders are reported to have racked up losses amounting to K10 lakh per fruit truck. The 1500 trucks are loaded with domestically produced agriculture products, such as watermelons and cucumbers.
The Kyin San Kyawt gate is a major export route for Myanmar watermelons, cucumbers, eels and crab. Exporters have to pay K 2600 in duties for a tonne of watermelons traded. Around 400 trucks ferrying watermelons and cucumbers trade at the gate daily.
Last November, an import ban on Myanmar rice, sugar and maize by China also led to a standstill in trade. To avoid paying high import tariffs on those commodities by the Chinese authorities, the number of traders in China resorting to buying from illegal routes has spiked in recent months, resulting in frequent border checks and arrests, which culminated in the ban.
As a result, stockpiles of the suspended commodities accumulated in warehouses in Muse, leading to losses for Myanmar’s farmers and traders.
“The main thing is to have a system of trade at the border with China. The government should try to make agreements with China for agricultural product exports as well as with India, for bean exports. Trade with both countries is important to us as it has a direct impact on our economy and the livelihoods of our farmers. It should be a priority for the government,” said Dr Soe Tun, vice chair of Myanmar Rice Federation.