Myanmar trade position

EU - Myanmar Trade Position

EU Common position - Trade and investment related restrictions

The EU Common Position outlines the following restrictions to trade with Myanmar, based on its lack of movement towards a democratic system of governance, respect for human rights and national reconciliation.

The sale, supply, transfer or export of arms and related materials of all types as well as assistance or services related to these activities is prohibited to Myanmar.

There is a ban preventing investment in any State Owned Enterprise (SOE) or enterprises owned or controlled by the regime and entities associated with the State.

It is prohibited to export to or finance companies in the logging, timber, metal/mineral mining industries as well as the mining of precious and semi-precious stones. This is equally applicable to imports from these industries.

EU-Myanmar Trade - Recent trade figures and trends

Myanmar (Burma) is a natural resource rich country but, due to its political situation, suffers from significant trade sanctions imposed by the EU and US. The US trade ban of 2003 has had a large impact on the textiles sector, which lost an estimated 100,000 jobs as a result of the ban.

Trade restrictions laid out in the EU Common Position have curtailed trade between the EU and Myanmar for the past 11 years, modestly to begin with, and then more recently to a greater extent. Imports from Myanmar to the EU are now almost exclusively either textiles/clothes or agricultural goods, while exports to the country are dominated by machinery and chemicals. Two graphs are shown below, indicating the situation and the changes in trade patterns between 2002 and 2006.

As the graph above illustrates, there has been a notable drop in exports from the EU to Myanmar between 2004 and 2006, falling from €88m to €67m over the period. Exports of transport equipment to Myanmar have seen a sharp drop over the period 2004 to 2006, from €23m to €5m, although it is unclear exactly why this has occurred. It is possible that the completion of the new capital, Naypyitaw, has caused a decreased need for such equipment, or perhaps the tightening of the EU Common Position has resulted in diminished flows of transportation equipment to State Owned Enterprises and or State-affiliated organisations.

As the graph above shows, there has been steady pattern of imports from Myanmar to the EU in agricultural goods and textiles/clothing, totalling €64m and €212m respectively for 2006. This said, the total amount of imports to the EU from Myanmar has felt a sharp between 2004 and 2006, falling from €437m to €276m, largely as a result of a €163m decline in Myanmar textile imports into the EU. The impact of the trade ban in mid-2003 on Myanmar textile imports into the US had a knock-on effect on the industry, severely impacting the viability of many factories. Additionally, with increased public awareness and criticism of the Myanmar authorities in the international community, consumer boycotts and negative feeling towards imports from Myanmar resulted in this significant reduction in imports to the EU.

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