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EU to re-impose tariffs on Myanmar and Cambodia

The European Union is planning to re-impose tariffs on imports from Myanmar and Cambodia which could impact both these economies severely. The EU had, in 2013, removed duties on most exports from Myanmar under an “Everything but Arms” initiative, designed to boost the economies of under-developed nations. As labor costs rose in China, East Asian investors traded with Myanmar, taking advantage of its cheap labor and the new trade benefits, to sell directly to the EU.

According to the EU, trade with Myanmar last year was worth €2.09 billion ($2.41 billion). Out of this, garments accounted for 72 per cent of Myanmar’s €1.5 billion exports. The EU will suspend zero-duties in only certain sectors, which might exempt the garment sector. This procedure allows time for extensive consultations, with the aim of changing countries’ behavior. EU member states and the European Parliament must also be consulted.

The EU is also planning to launch a procedure to eventually suspend trade benefits for Cambodia over Prime Minister Hun Sen’s moves against the opposition. The country’s exports to the EU last year reached €5 billion. Its garment sector, which employs almost 1 million people and supplies brands including Gap Inc., Nike Inc., Puma SA, could be badly impacted.

 

 
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