The European market imports over 45 per cent garments produced in Myanmar. The European Union accounts for more than 30 per cent of Myanmar’s total exports.

Myanmar currently enjoys tariff-free access to the EU bloc for all exports except weapons and ammunition under the Generalised Scheme of Preferences (GSP). The garment industry has emerged as one of the major beneficiaries of these trade privileges. The EU’s special trade status to Myanmar is critical to attracting more manufacturers setting up factories in the country as manufacturers move their supply chains from China to Southeast Asia. The recent US-China trade tension along with Coronavirus outbreak is speeding up the process of major industries shifting manufacturing bases to southeast Asia from China. With Vietnam and Indonesia seeing a looming shortage of workers for low skilled jobs, more manufacturers are looking to Myanmar as a production base as part of risk diversification measures.

A compliance assessment has been launched in Myanmar, starting with two pilot factories. The checklist helps manufacturers conduct self-assessments on whether working conditions satisfy international legal and labor rights standards, including those from the EU and the US. Last year, a law was passed addressing concerns on child rights.