By KYAW YE LYNN | FRONTIER
YANGON – A government trade promotion body has signed a deal with the European Chamber of Commerce to promote bilateral trade and investment from European companies.
The Memorandum of Understanding was signed between Myantrade – the Myanmar Trade Promotion Organization, under the Ministry of Commerce – and EuroCham Myanmar in Yangon on Friday.
It is Myantrade’s first agreement with a foreign business chamber since the government launched its five-year National Export Strategy in March 2015, Deputy Minister for Commerce U Aung Toe said.
“I am confident that the MoU will enhance bilateral trade corporation between Myanmar and European Union, and promote investment of companies from the EU,” he said in his opening remarks.
Business ties between the EU and Myanmar have expanded significantly since 2011 with the lifting of most economic sanctions and reinstatement of the Generalized System of Preferences for Myanmar exports. In 2013, work began on an Investment protection Agreement that is now nearing completion.
U Aung Soe, director general of Myantrade, said the resumption of GSP – which the EU temporarily withdrew in 1997 to punish the military regime – had been particularly important for growing Myanmar exports.
European Commission figures show that bilateral trade has grown from just 245 million euros (US$292 million at current exchange rates) in 2010 to 1.559 billion euros ($1.86 billion) in 2016.
Most of the growth has been in Myanmar exports, which increased almost 350 percent in three years, from 223 million euros in 2013 to 993 million euros in 2016. Of this figure, 69.6 percent was textile products, while another 5.7 percent was footwear and hats.
“The main export items to EU countries are clothes, fishery products and forestry products,” Aung Soe said.
But Myanmar is also facing challenges in promoting export volumes to the EU.
“The main problem is most Myanmar products do not meet EU quality standards,” Aung Soe said. “For example, we have abundant agri-products but we can’t export most of them because they contain chemical residues.”
EuroCham Myanmar executive director Mr Filip Lauwerysen said the situation in northern Rakhine State has affected Myanmar’s standing as “an investment destination”, but companies already working in Southeast Asia were less likely to be put off.
“Tourism is the most affected while other sectors are less affected,” he said. “But for the companies that are already active here, they know Myanmar, they know the potential that it has. So I think they plan to stay here, plan to expand.”
He said the impact of the Rakhine crisis on business confidence would be clearer when EuroCham Myanmar publishes its annual Business Confidence Survey next month. The survey covers what activities EU business are doing in Myanmar, as well as their future plans and difficulties.
“That is very important, an important tool to answer questions how European companies feel about this situation,” Lauwerysen said. “In the Business Confident Survey, I think we will see positive forward despite some setbacks.
“As EuroCham, we would like to see as soon as possible the peaceful situation and stability.”