Myanmar and Asia Pacific: Role of Policy Research in Country's Economic and Trade Reform Yangon University of Economics, February 2015
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1 Myanmar and Asia Pacific: Role of Policy Research in Country's Economic and Trade Reform Yangon University of Economics, February 2015 Responding to the need for technical assistance coordination in support of the ongoing trade policy reform in Myanmar Denis Audet International Trade Advisor
2 Table of Content I. Legacies of Decades of Economic Isolation; II. Key Trade Related Reforms and Projects; III. Aid for Trade Coordination; IV. MOC s Capacity Building Needs; V. Concluding Remarks.
3 I. Legacies of Decades of Isolation Managed trade regime ( ): Artificial exchange rate and offsetting trade requirements; State trading enterprises and Export taxes; Export and Import licenses all products; Low Customs Tariff (5.5% in 2013) and low revenues (4.7% in 2010/11); Absence of Trade Remedy Laws (Safeguards, anti dumping, countervail); High concentration of exports on primary commodities (80% in 2012/13) and unsophisticated manufacturing exports; Poor infrastructure (129/155 Logistics Performance Index, 2012); Poor business environment (182/189 Doing Business, 2014); Gaps in human skills; Absence of timely statistics; Obsolete body of laws and regulations; Fragmented trade policy regime without permanent coordination structures.
4 II. Key Trade Policy Reforms and Projects Managed float foreign exchange rate (April 2012); Myanmar asked WTO to be reviewed under TPR Mechanism; Framework for Economic and Social Reforms (FESR); Work towards the establishment of the ASEAN Economic Community (AEC); Take advantage of its strategic geographical position (GMS); Nay Pyi Taw Accord for Effective Development Cooperation (Jan 2013); Myanmar Development Cooperation Forum (MDCF); 17 Sectoral Working Groups: Trade Sector Working Group (TSWG); Enhanced Integrated Framework (supply side and policy coordination); ASEAN Rotating Chairmanship in 2014.
5 Key Trade Projects WTO Trade Policy Review Completed in March 2014 Follow up Workshop Jan 2015 identified 6 priority areas for technical cooperation National Trade Facilitation Impl. Plan National Export Strategy Draft stage. Required by WTO Bali Agreement Need to notify Trade Facilitation commitments to WTO Some ("type c") subject to receiving donor support To be launched in early year project with 7 priority sectors and 4 priority cross sector functions
6 WTO Trade Policy Review of Myanmar Founding GATT Member in 1948 but 1 st TPR in ; Periodic review for all WTO Members; Peer review process to increase the transparency and understanding of a member s trade regime; Secretariat Report and Government Statement; More than 200 Written Questions and Answers: Foreign exchange regime; FDI and business environment; transparency/predictability of the trade and investment regime including WTO notifications; tariff bindings and discrepancies; the gap between applied and bound tariff rates; import/export licensing requirements; customs valuation; special economic zones; trading rights; State owned economic enterprises and state trading arrangement; contingency measures; government procurement; SPS and TBT issues; IPRs protection; and financial sector reforms.
7 WTO Trade Policy Review of Myanmar WTO website: Strongly welcomed Myanmar s political and economic re orientation; Encouragement in doing more reforms are needed: Implement draft laws (IPR, Competition, Consumer Protection, Investment); Trade Facilitation (Customs procedures, Customs Valuation); Rationalization of tariffs and domestic taxes; Improved competitiveness (business environment, privatization, agriculture, services, economic diversification).
8 WTO TPR Follow Up, January 2015 WTO Secretariat identified CB priorities in 6 areas: Implementation of the Trade Facilitation Agreement; Notifications of trade related regulations; Assistance to formulate TBT and SPS regulations; Intellectual Property Right regulations; Strengthening Trade Statistics; and Assistance in the implementation of new trade related laws.
9 III. Aid for Trade Coordination Myanmar Development Cooperation Forum (MDCF) EIF National Steering Committee Chair: MOC Union Minister 16 Other Working Groups Trade Sector Working Group Chair: MOC Union Minister EIF Aid for Trade Coordination Unit EIF NTFIP NES Other AfT
10 Aid For Trade Coordination Enhanced Integrated Framework (EIF) Myanmar became a beneficiary country in April 2013; Purpose of the EIF: Mainstream trade into national development strategies; Set up structures needed to coordinate the delivery of TRTA; Building capacity to trade including addressing critical supply side constraints. Diagnostic Trade Integration Study (DTIS) and its Action Matrix will respectively identify the trade constraints and suggest national development strategies; EIF National Steering Committee to coordinate aid for trade projects; EIF Aid for Trade Coordination Unit within MOC.
11 IV. MOC s Capacity Building Needs Statistical purpose software; Computing trade in services statistics; Accessing and using web based trade statistics of main trading partners i.e. Eurostat; English language and English drafting; Implementation of a negative list approach for trade licenses; Implementation of international best practices in: Trade remedies, Trade promotion, Consumer protection and Competition laws, Building up knowledge and negotiation capacity in: Trade in services; Dispute settlement, IPR, Standards, SPS, Regional Integration, Investment, tariff rationalization, Foreign trade regimes of main trading partners, international competitiveness, cost benefit analysis, Improving transparency: WTO Notifications, communication strategy
12 V. Concluding Remarks Major economic and social policy challenges ahead; Transition in trade policies and institutions: from managed trade regime to trade as a key actor of economic and social development; Transition in human skills requirements: from administrative procedures to trade analysis; Good analysis only possible if good trade data are available; Need for Aid for Trade Coordination.
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