Myanmar would like the EU to continue with the trade preferences. Myanmar garment manufacturers say the loss of duty-free export trade preferences could put more than 4,00,000 jobs at risk and badly damage the country’s economy by depriving it of its largest source of foreign exchange income.

The country says it is progressing with the reforms and needs the EU’s support for further reforms. The EU says before taking a decision to withdraw the preferences it would investigate human rights violations, and whether Myanmar had committed labor rights violations and followed international law and regulations.

The value of Myanmar’s garment exports to the EU has significantly increased from 2013 to 2017. The EU has become Myanmar’s largest trade partner for garments, purchasing more than 47 per cent of the products. Since 2013, the EU has lifted duties on goods from Myanmar under the EBA’s zero-tariff import regime. Nearly 70 per cent of Myanmar’s exports go to EU countries, and more than half of these are garments.

As a result of the opening of the EU market, the number of factory workers in Myanmar has grown from 2,40,000 in 2012 to 4,50,000, and the garment sector is the most labor intensive of the country’s major industries.