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U.S. Reinstates GSP Benefits for Burma

President Obama signed on 14 September a proclamation that will reinstate the eligibility of Burma (Myanmar) for benefits under the Generalised System of Preferences as of 13 November following a 27-year lapse. Burma will also be designated as a least-developed beneficiary developing country for purposes of GSP, giving it the opportunity to export approximately 5,000 products to the United States duty-free. According to a press release from the Office of the U.S. Trade Representative, Burma’s exports to the United States grew from US$38,000 in 2012 to US$142 million in 2015 and include a number of GSP-eligible goods, including dried peas, rattan products, wood products, and travel goods such as handbags and backpacks.

The United States suspended Burma’s GSP benefits in April 1989 due to worker rights concerns. After Burma requested reinstatement in 2013, USTR led what it called “an extensive review” of Burma’s compliance with all the GSP eligibility criteria, with a particular focus on Burma’s recent record of labour reforms and strengthened worker protections.

USTR states that the reinstatement of GSP eligibility acknowledges the progress Burma has made to date in these areas and encourages continued progress to address remaining labour concerns and challenges. For example, Burma is working with the United States, the European Union, Japan, Denmark, and the International Labour Organisation on an initiative launched in November 2014 that is intended to help modernise Burma’s labour code, improve compliance with international labour standards, and foster a robust dialogue between government, business, labour and civil society. “While there is more work to be done, including to address concerns regarding human trafficking,” USTR Mike Froman said, “Burma has made important progress” and “we see Burma’s democratically-elected government giving new hope to its people, making commitments to continue implementing reforms that strengthen workers’ voices, and working to combat forced and child labour.”

Burma’s reinstatement as a GSP beneficiary is particularly noteworthy for the travel goods sector, as that country is the twelfth largest U.S. supplier of the travel goods that currently benefit from duty-free treatment under GSP with a 0.7 percent share of total U.S. imports during January-July 2016. Mainland China is by far the largest supplier with a 60.0 percent share or US$2,971.7 million during that period, while Vietnam ranks second with an 11.1 percent share or US$547.8 million.

U.S. imports of covered travel goods from Burma are growing rapidly, up by 1,873.4 percent from US$1.3 million in 2014 to US$26.4 million in 2015 as well as 267.6 percent to US$32.8 million during January-July 2016, compared to the same period in 2015. By contrast, U.S. imports from mainland China fell by 20.2 percent during the first seven months of this year, while imports from Vietnam were 0.1 percent lower. U.S. import duties on covered travel goods from Burma are substantial, averaging 10.3 percent during the first half of this year.

Content provided by Picture: HKTDC Research
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