US reviewing GSP for Myanmar

The United States trade representative is conducting a review into whether to grant Myanmar trading privileges under the generalised system of preferences, according to a press release from the US Embassy in Myanmar. 

“In the past, the US included Myanmar in its GSP. Later it got revoked,” said economist U Myint. “This tax advantage is being offered only to developing countries. It is good that the US is reconsidering. Since US-Myanmar trade has been increasing every year, this is also good for Myanmar.”

According to the US Census Bureau of the Department of Commerce, US exports to Myanmar reached US$9.8 million (Bt311 million) in 2010, $48.9 million in 2011, $65.8 million in 2012 and $145.7 million in 2013. Since the US eased an import ban on Myanmar at the end of 2012, US imports from Myanmar were recorded at $30.1 million in 2013.

Last June, the US Department of Commerce opened the first-ever Foreign Commercial Service office in Yangon to help American companies doing business in Myanmar.

Starting in 2012, the US eased many of its economic sanctions on Myanmar, with the exception of restrictions on dealings with persons on the Specially Designated Nationals list, restrictions on the import of Myanmar-origin jade and rubies, and limits on dealings with Myanmar’s Ministry of Defence and state or non-state armed groups. This easing opened the door for US businesses to trade and invest in Myanmar.

Earlier, Central Bank of Myanmar vice-governor Sat Aung said that five to 10 foreign banks would be given licences to operate locally in September.

The foreign banks, yet to be chosen, will be allowed to operate locally by either establishing a bank branch in Myanmar, forming a new company under the foreign bank’s name, or under a joint venture with a local partner.

“Our method of selection will allow foreign banks to operate a company in Myanmar. By this system, the banks must bring foreign capital from their country and cannot leave Myanmar easily during an economic downturn. Moreover, they will be under the supervision of the central bank,” Sat Aung said.

The board for selecting foreign banks is comprised of officials from the Ministry of Finance, the Central Bank of Myanmar, the Attorney-General’s Office, a German advisory team, the International Monetary Fund and the World Bank.

The exact number of the foreign banks that will be given licences is still uncertain, but the range of five to 10 banks has been reported. Myanmar has more than 20 domestic private banks. But executives from some have voiced concern that the entry of foreign banks will create unfair competition.