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United States Reinstates Trade Preference Benefits for Burma Following Review of Eligibility Criteria
Washington, D.C. - Today, President Barack Obama signed a proclamation that will reinstate Burma’s eligibility for benefits under the Generalized System of Preferences (GSP) program as of November 13, 2016. This action comes after the conclusion of a review of Burma’s compliance with the eligibility criteria under the GSP statute, including whether Burma is taking steps to afford internationally-recognized worker rights.
"While there is more work to be done, including to address concerns regarding human trafficking, Burma has made important progress in recent years with respect to worker rights," said United States Trade Representative Michael Froman. "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 labor. We have partnered with Burma to support many of these reforms in the past and will continue to do so with GSP in place."
The United States suspended Burma’s GSP benefits in 1989 due to worker rights concerns. After Burma requested reinstatement in 2013, the Office of the United States Trade Representative led an extensive review of Burma’s compliance with all of the GSP eligibility criteria, and in particular of Burma’s recent record of labor reforms and strengthened worker protections. Since the new democratic government took office in March 2016, senior Burmese government officials, led by Aung San Suu Kyi, and joined by Burmese business and labor leaders, have also engaged closely with the United States on labor issues to demonstrate Burma’s eligibility under the statutory GSP criteria. Designation of eligibility for GSP acknowledges the progress made to date by Burma and encourages continued progress, which the United States will continue to monitor closely, in order to address the labor concerns and challenges that remain. .
In addition to its labor market reforms, Burma is also working with the United States, the European Union, Japan, Denmark, and the ILO, under the Initiative to Promote Fundamental Labor Rights and Practices in Myanmar. The initiative, launched in November 2014, is intended to help modernize Burma’s labor code, improve compliance with international labor standards, and foster a robust dialogue between the government, business, labor and civil society. The second Stakeholder Forum under the Initiative will be held September 29-30 in Rangoon, Burma.
Burma's benefits under the GSP program will be reinstated effective on November 13, 2016, after a 60-day Congressional-notification period. As a United Nations-listed Least Developed Country, whose per capita income at $1,280, the second-lowest in East and Southeast Asia, and where over 25 percent of the population lives below the national poverty line, Burma will also be designated as a least developed beneficiary developing country for the purposes of the GSP program. This designation will give Burma the opportunity to export approximately 5,000 products to the United States duty-free. Regaining GSP trade benefits will spur economic development, generating opportunities for exports that create jobs and help reduce poverty in the formerly-closed economy.
The GSP program was created by the Trade Act of 1974 to promote economic development of developing nations. Under the program, 122 beneficiary developing countries (BDCs) export approximately 3,500 different products duty-free to the United States. Least-developed BDCs are eligible to export another 1,500 products duty-free. In 2015, exports that have entered the United States duty-free under the GSP program from all countries totaled nearly $17.7 billion.
Burma’s exports to the United States have grown from $38,000 in 2012 to $142 million in 2015. These exports include a number of GSP-eligible goods, including dried peas, rattan products, wood products, and travel goods such as handbags and backpacks.
Burma regained similar preferential trade benefits under the European Union’s GSP program in July 2013 following the recognition of labor reforms by the International Labor Organization. Other major economies, such as Canada, Japan, Korea, and Australia, have also included Burma in their generalized system of preference programs.