Six months into the grace period, Myanmar
farmers are worrying what will happen when free trade finally comes to all
ASEAN members in 2018.
For most
of its members, the ASEAN Economic Community came into force on December 31
last year, allowing the free movement of goods and services across the borders
of participating countries without tariffs.
Cambodia,
Laos, Myanmar and Vietnam were granted an extra three years to put their
national economies into order, in recognition of their relatively smaller
status. The deadline for all non-tariff barriers to be eliminated within ASEAN
is 2018.
Some
farmers fear that may not be enough time.
Myanmar
still has the right to levy duty and apply import restrictions to agricultural
primary products like rice, beans and fisheries products, said U Myint San,
director of the Myanmar Research Centre for Economic Development.
But there
are already fears of foreign competition when people living in Myeik township,
Tanintharyi Region, eat Thai rice – cheaper and better than the home-grown
variety.
“We need
to learn how to compete with imported agricultural products,” said U Myint San.
“Farmers
will face difficulties if they can’t meet the quality and price of imported
goods. Higher-quality imports are good news for consumers, but not for local
producers. Right now we can tax imports up to 5 percent, but that will fall to
zero in 2018. We’ll be in trouble if we can’t compete with Thai and Vietnamese
rice.”
Rice
Federation deputy director U Soe Htun said the federation was keeping a close
eye on the situation, but he did not expect a serious problem to develop
because foreign rice was only imported in times of domestic shortage.
“I don’t
see a major influx of imported rice at this point,” he said.
The Thai
rice that most people in Tanintharyi Region eat is often illegally imported and
easily acquired because of the proximity to the border, said one of the
resident in Myeik township. Illegally imported Thai clothes and electronic
goods are popular for the same reason.
But
Myanmar is still able to stop the free flow of agricultural goods, including
Thai rice, into other regions, said U Myint San.
Once the
AEC arrives that will no longer possible, and the remaining window is tight for
Myanmar to be able to compete on quality and price, he said.
Bean
farmers have less to worry about. Myanmar is one of the world’s largest
exporters of beans and pulses, typically exporting more than 1 million tonnes a
year – worth about US$1 billion. About 80 percent of Myanmar’s bean and pulse
exports head to India, although Myanmar is also hoping to break into the United
States and Middle East markets.
Some
types of pulse – like black beans – are very specific to Myanmar, and
competitors like Australia, Canada and Senegal are too far away to provide much
of a threat in the export market.
“Free
trade won’t cause problems for the bean farmers,” said pulse exporter U Min Ko
Oo.
Most of
Myanmar’s fish exports, meanwhile, go to Nepal, Korea and in particular the
Middle East.
Because
the quality of Myanmar fish exports are comparable with those of other ASEAN
nations, the advent of the AEC is unlikely to cause issues, said U Myat Thu
Tun, an executive from GP Trading Company, a manufacturer and exporter of fish
products.
But
Myanmar’s fishery industry is still in difficulty, mainly because flooding
makes fish farming difficult, he said. This in turn has pushed up the local
price of raw fish for firms exporting fish products.
“The
fishery sector has problems,” U Myat Thu Tun said, “but they aren’t related to
the AEC.”
The World
Bank’s Economic Monitor report published in May noted that local producers in
the food processing industry are also facing growing competition from cheaper
imports.
“Their
productivity and competitiveness are hampered by weak domestic supply chains
and a lack of access to affordable finance,” it said. Much of the inputs for
domestically processed foods – flour, preservatives, and packaging material –
also have to be imported, according to The World Bank.
Myat Noe
Oo
No comments:
Post a Comment