"What does the EU's Everything But Arms (GSP) tariff-‐free access contribute to the Myanmar textile and garment sector?"

The
2nd
Myanmar
Tex.le
Summit
2018

organized
by:

Myanmar
Garment
Manufacturing
Associa7on
&
ECV
Interna7onal

presenta7on
by:

Joseph
Falcone,
Independent
Consultant

Specializing
in
Sustainable
Supply
Chain
Policy

“View
of
EU
GSP
Advantages
of
Myanmar

and
It's
Inﬂuence
on
Tex@le
and
Garment
Industry”

Yangon,
Myanmar

13
November
2018

1

“View of EU GSP Advantages of Myanmar and It's Influence on Textile and Garment Industry”
13-Nov-18 Yangon, Myanmar Myanmar Textile Summit 2018

Welcome……Representa.ves…….
from
:

•  Government
of
the
Union
of
Myanmar

•  Myanmar
Garment
Manufacturers
Associa7on

•  Garment
Factories,
Global
Retailers
&
Brands

•  Donor-‐funded
Garment
Sector
Programs,
Consultants,
Advisors…and
others

2


12
Ques.ons
and
Answers

1.
What
is….
EU
GSP
?

“Generalised
Scheme
of
Preferences
(GSP),
consis7ng
of

the
three
arrangements
Standard
GSP,
GSP+
and
Everything

But
Arms
(EBA),
is
the
EU's
trade
preference
programme
for

vulnerable
developing
countries.

It
allows
them
to
pay
fewer
or
no
du7es
on
exports
to
the

EU
in
return
for
improving
the
implementa7on
of
core

human
and
labour
rights
principles
and
standards.”

3


2.
What
is….
EBA
?

•  “The
EBA
arrangement
grants
full
duty
free
and
quota

free
access
to
the
EU
for
all
products
(except
arms
and

ammuni=on).

•  To
be
eligible
for
EBA,
a
country
must
be
listed
by
the
UN

as
Least
Developed
Country
(LDC).”

Source:
European
Commission
-‐
Fact
Sheet,
Brussels,
19
January
2018:

Second
report
on
the
eﬀects
of
GSP
and
the
special
incen=ve
arrangement
for

sustainable
development
and
good
governance
(GSP+)
covering
2016-‐
2017

4


2.
What
is….
EBA
?
(con7nued…)

“As
a
Least
Developed
Country
(LDC),
Myanmar
beneﬁts

from
the
EU's
Everything
But
Arms
(EBA)
scheme,
part
of

the
EU’s
Generalised
System
of
Preferences
(GSP).
The
EBA

gives
the
world's
47
Least
Developed
Countries
-‐
including

Myanmar
–
duty-‐
and
quota-‐free
access
to
the
EU
for
all

their
exports,
except
for
arms
and
ammuni=on.”

Source:
European
Commission
-‐
website:
Trade
>
Policies
>
Countries
&

Regions
>
Myanmar
h_p://ec.europa.eu/trade/policy/countries-‐and-‐regions/countries/myanmar/

5


“Under
the
EBA
arrangement
of
the
Generalised
Scheme
of

Preferences
(GSP),
the
EU
unilaterally
grants
exporters
from

Least
Developed
Countries
(LDCs)
tariﬀ-‐free
and
quota-‐free

access
to
its
market
for
all
products
(except
arms
and

ammuni=on)
with
the
aim
to
contribute
to
the
economic

development
of
these
countries
and
their
integra=on
into

the
global
trading
system.

A
beneﬁciary
country
can
have
its
trade
preferences

withdrawn
temporarily
if
there
is
evidence
of
serious
and

systema=c
viola=ons
of
the
core
principles
laid
down
in
the

15
fundamental
interna=onal
human
rights
and
labour

rights
conven=ons
of
the
United
Na=ons
and
the

Interna=onal
Labour
Organisa=on.”

Source:
Myanmar:
EU
mission
assesses
human
rights
and
labour
rights

situa=on.
European
Commission
-‐
Press
Release,
31
October
2018:

h_p://trade.ec.europa.eu/doclib/press/index.cfm?id=1936

6


3.
Why
is
the
EU
trade
oﬃce
monitoring
the
human
rights

and
labour
rights
situa7on
in
Myanmar
?

•  EBA
and
GSP
duty
free
access
requires
repor7ng
that

includes
detailed
assessments
of
each
beneﬁciary

country's
progress
and
shortcomings
as
regards
the

implementa7on
of
15
fundamental
conven7ons.

7


4.
What
are
“15
Conven.ons”
the
EU
is
monitoring
in
the

GSP
countries
?

•  Seven
(7)
conven.ons
on
human
rights,
including:

–  prohibi7on
of
genocide
and
torture,

–  protec7on
of
the
rights
of
children,

–  elimina7on
of
discrimina7on
against
women
and

minori7es,

–  protec7on
of
freedom
of
expression
and
associa7on,

–  the
right
to
a
fair
trial,
and
judicial
independence,
as

well
as

–  economic,
social
and
cultural
rights;

8


4.
What
are
the
“15
Conven.ons”
that
the
EU
is

monitoring
in
GSP
countries
?
(con7nued)

•  Eight
(8)
fundamental
conven.ons
of
the

Interna.onal
Labour
Organisa.on,
including
:

–  conven7ons
prohibi7ng
forced
and
child
labour,

–  ensuring
workers'
rights
to
freedom
of
associa7on

and
collec7vely
organise
and
bargain,
and

–  two
conven7ons
that
protect
workers
from

discrimina7on
at
work,
and
ensure
that
women
and

men
receive
the
same
remunera7on
for
work
of

equal
value;

9


“A
monitoring
mission
of
experts
from
the
European

Commission
and
the
European
External
Ac=on
Service

visited
Myanmar
from
28
to
31
October.
This
follows

deeply
worrying
developments
highlighted
in
various

United
Na=ons
reports,
in
par=cular
as
regards
human

rights
viola=ons
in…
(3)…
States
and
concerns
around

labour
rights.”

Source:
Myanmar:
EU
mission
assesses
human
rights
and
labour
rights

situa=on.
European
Commission
-‐
Press
Release,
31
October
2018:


10


EU
Commissioner
for
Trade,
Cecilia
Malmström,
31-‐Oct-‐18:

“Trade,
done
right,
is
a
powerful
force
for
good.
Since
several
years,
we
have

worked
to
ensure
that
trade
preferences
and
access
to
the
EU
market
are
an

incen=ve
to
promote
fundamental
human
and
labour
rights.
We
now
expect

Myanmar
to
address
the
severe
shortcomings
that
have
been
highlighted

during
this
monitoring
mission.
If
they
do
not
act,
Myanmar
authori=es
are

pucng
their
country's
tariﬀ-‐free
access
to
the
EU
market
in
danger–
a
scheme

which
has
proved
to
be
vital
for
the
economic
and
social
development
of
the

country,
providing
thousands
of
jobs
to
workers
in
sectors
such
as
tex=les,

agriculture
and
ﬁsheries.

We
are
commieed
to
helping
Myanmar
improve
the
situa=on
and
ensure
that

the
principles
enshrined
in
the
interna=onal
conven=ons
to
which
Myanmar
has

commieed
are
not
undermined.”

Source:
Myanmar:
EU
mission
assesses
human
rights
and
labour
rights

situa=on.
European
Commission
-‐
Press
Release,
31
October
2018:


11


5.
Is
the
EU-‐GSP
trade
preference
system
only
focusing
on

Myanmar
?

•  Myanmar
is
not
the
only
country
under
inves7ga7on.

•  Cambodia
is
in
a
similar
posi7on
for
various
fundamental
human
rights

viola7ons.

•  An
EU
inves7gatory
mission
visited
Cambodia
in
July
2018

and
a
similar
one
to
Myanmar
in
28-‐31
October
2018.

12


5.
Is
the
EU-‐GSP
trade
preference
system
only
focusing
on

Myanmar
?
(con7nued…)

•  Myanmar
is
not
the
only
country
under
inves7ga7on.

•  Bangladesh
is
also
on
the
EU
“watch
list”
for
labour
rights
viola7ons.

•  Sri
Lanka
had
GSP
withdrawn
in
2010
and
then
restored
in
2017

following
various
UN
reports
on
Sri
Lanka's
failures
in
implemen7ng
three

UN
human
rights
conven7ons:

–  the
Interna7onal
Covenant
on
Civil
and
Poli7cal
Rights
(ICCPR),

–  the
Conven7on
against
Torture
(CAT)
and

–  the
Conven7on
on
the
Rights
of
the
Child
(CRC).

13


6.
Is
there
a
role
for
the
Myanmar
Garment
Sector
in
this

review
process
?

7.
How
might
the
Myanmar
Garment
Sector
try
to
help
the

situa7on
with
ongoing
EU
Inves7ga7on
in
the
next
few

weeks
and
months
?

14


8.
How
might
the
Myanmar
Garment
Sector
prevent
the

suspension
of
EBA
preferences
for
the
European
market
?

•  Some
business
and
human
rights
experts
and

commentators
think
garment
sector
leaders
might
act

decisively
now,
to
help
the
situa7on
and
inﬂuence
its

outcome.

15


9.
What
may
be
the
main
points
for
the
Myanmar
Garment

Sector
to
improve,
from
an
EU
Perspec7ve
?

“The
EU
mission
also
discussed
its
concerns
regarding
…..
the

need
for
further
reforms
as
regards
freedom
of
associa@on

and
collec@ve
bargaining.”

Source:
Myanmar:
EU
mission
assesses
human
rights
and
labour
rights

situa=on.
European
Commission
-‐
Press
Release,
31
October
2018:


16


Many
local
and
interna7onal
commentators
have

commented
in
the
past
several
weeks
that
they
believe
that

in
addi7on
to
all
the
great
progress
since
2011,
that
it
might

also
be
useful
if
Myanmar
Garment
Sector
can
demonstrate

even
more
progress
on
the
following:

•  Decent
work
condi.ons;

•  Eﬀec7ve
social
dialog;
and

•  Protec7on
of
the
right
to
freedom
of
associa.on,

collec.ve
bargaining
and
grievance
handling

All
in
line
with
the
exis7ng
Myanmar
Laws,
by-‐laws,
Regula7ons,
Instruc7ons

and
the
UN
and
ILO
Conven7ons
that
Myanmar
Govt.
has
ra7ﬁed.

17


This
is
related
to
all
sectors,
of
course,
but
more
important
in

Myanmar's
garment
sector,
which
is
most
vulnerable
to

withdrawal
of
EBA.

Based
on
the
31
Oct
2018
EU
press
Release,

10.
What
might
be
some
more
speciﬁc
ideas?

18


For
example,
the
government
and
the
Myanmar
Garment

Sector
could
do
more
to:

1.  Ensure
that
workers
are
trained
on
their
rights
and

obliga7ons
under
the
law
and
their
contracts;

2.  Ensure
that
workers
and
management
are
provided
with

basic
empowerment
and
nego7a7on
skills;
and

3.  Ensure
that
the
government
include
knowledge
of
labour

rights
in
the
entry
level
of
the
Na7onal
Skills
Standards

Qualiﬁca7ons
for
all
garment
sector
entry-‐level
workers.

19


11.
What
else
?

4.
Worker-‐Management
Dialog
Leadership

•  Build
the
ability
of
employees
to
engage
construc7vely

with
management
when
they
have
a
problem.

•  Provided
the
employers
are
equally
open
to

construc7ve
dialog,
research
shows
that
should

ensure:

–  Less
conﬂict
in
employer-‐worker
rela7ons;

–  Be_er
working
condi7ons;
and

–  Greater
produc7vity.

20


11.
What
else
?
(con7nued)

4.
Worker-‐Management
Dialog
Leadership

•  This
point
has
been
made
for
years
by
Government

leaders
and
other
public
servants,
Brands,
Unions
and

CSOs
in
many
Garment
producing
countries
.....

especially
countries
with
a
frequent
violent
industrial

setng
the
past
30
years,
such
as:

–  China
(#1
in
RMG
exports),

–  Bangladesh
(#2
in
RMG
exports),
and

–  Some
of
the
lower
wage
countries
with
high
growth
poten7al

such
as
Ethiopia,
Cambodia
and
Myanmar.

21


12.
What
is
at
stake
?

A
Few
Sta7s7cs
:

If
Myanmar
loses
EBA,
this
would
be
a
big
hit
to
an
already

struggling
economy.

•  In
2017,
the
EU
ranked
as
the
6th
biggest
trade
partner
of
Myanmar.

•  The
EU
imported
goods
worth
€1.549
billion
from
Myanmar,
dominated
by

garment
(72%)
and
agricultural
products.

•  About
half
of
the
Myanmar
garment
sector
is
now
des7ned
for
EU
markets.

•  That
includes
the
output
of
much
of
the
Chinese
FDI
which
has
come
in

during
the
last
few
years.

22


These
sta7s7cs
show
that
it
may
not
be
wise
to
assume

that
Chinese
or
other
Asian
FDI
will
shield
Myanmar

from
the
impacts
of
reduced
access
to
Western
markets.

It's
all
linked
in
this
globalized
economy.

•  Before
the
situa7on
in
2017-‐2018
started
to
impact
investment
and

orders,
industry
es7mates
suggested
that
garments
could
employ

over
1.5
million
people
by
2020;

•  That
is
compared
to
just
111,000
in
2012,
which
was
the
situa7on

prior
to
restora7on
of
EU
GSP
in
2013.

23


Losing
EBA
(EU
GSP)
will
likely
have
a
nega7ve
eﬀect
on

employment
in
outer
Yangon.

•  As
many
local
commentators
have
pointed
out,
losing

EU-‐GSP
would
also
have
repercussions
across
the

country,
as
many
in
the
garments
industry
are
migrant

workers
from
Magwe,
Ayeyarwady,
Bago
and
Rakhine.

•  EMREF/C&A
Founda7on's
2017
study
of
workers
in
the

sector
also
showed
that
20%
of
garment
workers
in

Yangon
are
from
the
Rakhine
State’s
biggest
ethnic

group,
called
“Rakhine”.

24


If
Myanmar
loses
preferen.al
access
to
EU
markets
(EU

GSP),
this
would
also
likely
have
some
addi.onal
nega.ve

eﬀects
:

•  May
reduce
the
market
incen7ve
to
improve
working

condi7ons
in
the
few
factories
that
would
remain.
That
is

because
the
EU
customers
are
more
likely
to
expect
the

garment
buyer
or
brand
to
undertake
social
audits,
and

act
to
ensure
supplier
factories
to
address
shortcomings.

•  As
long
7me
foreign
business
people
in
Myanmar
who

lived
here
during
part
of
the
last
period
when
the
EU

suspended
GSP
(1997-‐2013),
the
many
empty
factories
of

Hlaingthaya
cleared
out
quickly...as
the
workers
had
gone

to
Thailand.

25


In
Summary,

•  The
hope
from
all
of
us
in
this
room
–
the
people
who
all

care
about
the
prosperity
of
the
Myanmar
Garment

Sector
-‐
is
that
all
those
here
who
have
the
ability
to
take

the
necessary
steps
to
prevent
this
happening
again
will

do
so….now.

•  Several
hundred
thousands
of
garment
sector
jobs
are

on
the
line
in
the
coming
weeks
and
months
with
this
EU-‐
GSP
EBA
Review
process.

26


Azer
all,
as
all
of
us
in
this
room
very
well
know,
the

garments
industry
provides
much
needed
jobs
in
Myanmar.

And
those
jobs
help
ensure
social
cohesion
and
stability
in

Myanmar,
a
country
that
the
World
Bank
categorized
in
it’s

“Fragile,
Conﬂict,
Violent
(FCV)”
na7on
group,
since
WB

returned
to
Myanmar
just
a
few
years
ago.

27


As
many
social
and
economic
reformers
have
long

recognized
over
the
past
many
decades
in
all
parts
of
the

planet
:

The
best
social
program
is
a
good
job.

28

-‐

-‐

CONCLUSION

-‐
-‐

Thank
you
!

Now
we
shall

open
the
ﬂoor

for

Your
Ques.ons.


29

View
of
EU
GSP
Advantages
of
Myanmar

and
It's
Inﬂuence
on
Tex@le
and
Garment
Industry

Keep
in
touch:

Email:

JoeFalcone1969@gmail.com

WhatsApp
/
Mobile:

+95
92
6178
0487

30

"What does the EU's Everything But Arms (GSP) tariff-‐free access contribute to the Myanmar textile and garment sector?"

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