The European Chamber of Commerce in Myanmar officially opened on December 12, providing a forum for EU businesses to engage with their Myanmar counterparts and government officials.
The chamber launches as trade between the 28-member bloc and Myanmar reached 570 million euros (US$710 million) in 2013, a 44 percent increase on the year previous.
The two markets complement each other well, with Myanmar specialising in goods that are in demand in Europe such as resources, while the EU can support Myanmar through its technology, know-how and equipment, according to EU ambassador to Myanmar Roland Kobia.
Still, challenges remain in building stronger bilateral trade and investment ties.
As of July 2013, Myanmar-made products receive preferential market access to the EU, meaning lower tariffs, but often the quality of these goods is not high enough to meet European standards.
This is one reason why the EU had a trade surplus of 122 million euros with Myanmar in 2013.
“Trade has grown significantly, but more needs to be done,” Mr Kobia said during a press briefing in Yangon on December 12.
“We will do two things [for Myanmar]. One is to open the market, and that’s already done, and second thing is to give technical assistance [in areas like] like sanitary standards,” he said.
With Malaysia having graduated from qualifying for preferential market access to Europe and Thailand set to graduate in 2015, it will reduce the competitive pressure on Myanmar’s exports and make the goods more attractive to the EU importers, a press statement said.
A total of 36 countries provide preferential market access to Myanmar, allowing most products in duty-free, though the US and Turkey are currently two of the larger exceptions.
However, Ministry of Commerce adviser U Maung Aung said the conditions attached to the EU’s program are particularly favourable for Myanmar businesses.
“As the EU is a big opportunity, our traders need to change from doing business the traditional way,” he said in a telephone interview. “The European market is not like the other markets in the [Southeast Asia] region they are familiar with.”
From Myanmar’s perspective, more could be done to capture benefit from this trade.
U Maung Aung said much of Myanmar’s exports to the EU come from foreign-owned garment factories that have set up shop in the country. Much of the inputs for the factories, such as textiles and machinery, are sourced from outside of Myanmar, meaning the country doesn’t receive the entire benefit of selling these products abroad.
Myanmar is able to claim more revenue from other sectors like rice and beans, where most of the value is added locally, though these products have been slower gaining market share in Europe, he said.
The European Chamber is set up by a consortium led by the French Myanmar Chamber of Commerce and Industry. It will receive 2.7 million euros in seed money from the EU, though it is expected to eventually become self-sufficient without the need for EU funds.
The president of the French Myanmar Chamber of Commerce and Industry Julien Esch said the new chamber is likely to benefit both parties.
“Myanmar and Europe benefit indeed from large complementarities, which would certainly bring jobs creation and increase exports,” he said in the statement.
Source: MYANMAR TIMES