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FTA Calls for Investment Framework in Myanmar to Boost Trade and Social Reforms

Date

18 Mar 2014

Sections

Sustainable Dev.
Trade & Society
Brussels, Tuesday 18 March 2014

On the occasion of the visit by the EU Trade Commissioner, Karel De Gucht, to Myanmar 19 - 20 March 2014, the Foreign Trade Association (FTA) expresses its full support for the envisaged start of negotiations for an Investment Agreement. EU retailers and importers are in need of an appropriate framework for foreign investment that would improve the business environment in a country that is rising as a potential new sourcing and trade market. In line with the distribution sector’s strong commitment to sustainable supply chains, the FTA recommends the addition of a meaningful chapter with social provisions to the agreement.

In light of the encouraging political and economic developments that are taking place in Myanmar - stimulated by the EU’s 2013 decision to grant the country access to the EU Generalised System of Preferences (GSP) and lift the existing trade sanctions - the FTA calls on the EU to seize the opportunity and set the grounds for an investment agreement which will generate clear added value for European businesses.

“Currently, Myanmar is still a minor sourcing country but the interest of European retailers in strengthening trade ties is significant. The business dynamism of the country and its many economic assets make Myanmar a very promising market for manufacturing garments and other consumer goods”, said Jan Eggert, FTA Director General. This positive outlook should, however, not ignore the many remaining barriers that deteriorate the domestic business environment. Stronger institutions, increased transparency and improved legal and financial systems are necessary to encourage European distribution companies to operate in the country. 

”Trade and investment have the power to trigger and accelerate positive reforms in Myanmar and enhance social stability for the inhabitants of one of the least developed countries in the world. Thus we fully back the idea of starting talks for an ambitious agreement, which would encompass both investment protection and market access. Whilst such a deal would not solve all systemic shortcomings, we expect an agreement to bring more economic and legal certitude for investors, to set clear market entrance rules, and to generally improve the business climate", the FTA Director General added.

Poor human rights and labour conditions in the country are still a major concern. For this reason, Myanmar is considered a risk country by the Business Social Compliance Initiative (BSCI), a platform of the FTA which supports retailers and importers in ameliorating working conditions in their global supply chains. As Mr Eggert stressed: “A real and sustainable change in this matter will only be achieved with full engagement of the different stakeholders. Myanmar authorities will need to recognise the importance of respecting the ILO Conventions on labour rights and effectively implementing them in their national laws. In this regard, the Investment Agreement should also include a solid chapter with sustainability goals”.

Opportunities to invest in Myanmar are clear, but impediments will only be overcome through a modernised legal framework and active dialogue. “Myanmar’s progress is for everybody’s benefit and the FTA is ready to support and contribute to its success”, concluded Mr. Eggert.
 
For further information, please contact:
 
Pierre Groening
FTA Trade Policy Advisor
pierre.groening@fta-intl.org
Tel: + 32 2 762 05 51

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About the FTA
FTA is Europe's premier association for trade policy and global supply chains. FTA represents retailers, importers and brand manufacturers in the political arena and in public to promote and defend free trade, and supports their international business by providing information and practical solutions. The association supports its members to improve sustainability in the international supply chain.
www.fta-intl.org

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