Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

The Republic of the Union of Myanmar is classified as a low income country in south east asia. Due to the decades of domestic military rule and international economic sanction, Myanmar has limited trade integration with the global market. The major export is primary goods, including agricultural and forest products, gems, and live animals, as well as an emerging gas exports, whilst imports are dominated by petroleum products, and iron and steel and articles thereof. Yet the real GDP growth rate over the past decades between 1992 and 2010 remained around 5 per cent, significantly less than the regional average (Bertelsmann Siftung 2014; WTO 2014). The lack of capital, regulatory and technological capacity, as well as infrastructure, remains the major obstacles impeding the development of Myanmar. Since 2010, Myanmar has taken steps to reform its business environment and integrate regionally and globally. Its reforming measures have gained the country broader assistance from the international community.

Bertelsmann Stiftung, 2014, Country Report (Myanmar)
World Bank, 2013, Business Environment Snapshot (Myanmar)
WTO, 2014, Trade Policy Review (Myanmar)

Domestic Market Access The pillar assesses the level and complexity of a country’s tariff protection as a result of its trade policy. This component includes the effective trade-weighted average tariff applied by a country, the share of goods imported duty free and the complexity of the tariff regime, measured through tariff variance, the prevalence of tariff peaks and specific tariffs, and the number of distinct tariffs. 97 4.27
Foreign Market Access The pillar assesses tariff barriers faced by a country’s exporters in destination markets. It includes the average tariffs faced by the country as well as the margin of preference in destination markets negotiated through bilateral or regional trade agreements or granted in the form of trade preferences. 6 4.38
Tariff rate (%) This indicator is calculated as a trade-weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data). An applied tariff is a customs duty that is levied on imports of merchandise goods. 47 3.89
Complexity of tariffs , index 1-7 (best) This indicator is calculated as the average of the following indicators: Tariff dispersion, Specific tariffs and Number of distinct tariffs. See description of each individual indicator for more details. Prior to averaging, values for each indicator were transformed to a 1–7 score, using the min-max method. 63 6.20
Tariffs dispersion (standard deviation) This indicator reflects differences in tariffs across product categories in a country’s tariff structure. The variance is calculated across all the tariffs on imported merchandise goods, at the 6-digit level of the Harmonized Schedule. 20 6.22
Tariffs peaks (%) This indicator is the ratio of the number of tariff lines exceeding three times the average domestic tariff (across all products) to the MFN (most-favoured nation) tariff schedule. The tariff schedule is equal to the total number of tariff lines for each country. These tariffs are revised on a yearly basis. 75 5.22
Specific tariffs (%) This indicator is the ratio of the number of Harmonized System (HS) tariff lines, with at least one specific tariff, to the total number of HS tariff lines. A specific tariff is a tariff rate charged on fixed amount per quantity (as opposed to ad valorem) 1 0.00
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 44 15.00
Share of duty-free imports (%) Share of trade, excluding petroleum, that is imported free of tariff duties, taking into account MFN tariffs and preferential agreements. Tariff data is from 2013 or most recent year available and imports data is from 2012 132 2.67
Tariffs faced (%) This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country. The weights are the trade patterns of the importing country’s reference group (2012 data). A tariff is a customs duty that is levied by the destination country on imports of merchandise goods 4 4.19
Index of margin of preference in destination markets, 0-100 (best) This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the MFN rate. It is calculated as the average of two components: 1) the trade-weighted average difference between the MFN tariff and the most advantageous preferential duty (advantage score), and 2) the ratio of the advantage score to the trade-weighted average MFN tariff level. This allows capturing both the absolute and the relative margin of preference. 50 39.12
Source : World Economic Forum, 2014, The Global Enabling Trade Report

Trade Policy and Market Access

Myanmar is a founding member of the WTO and, on the regional level, has been a member of The Association of Southeast Asian Nations (ASEAN) since 1997, with current component agreements on goods, services and investment. Its trade with other ASEAN member countries accounts for approximately half of Myanmar’s overall trading volume. Due to its ASEAN membership, Myanmar also participates in ASEAN's preferential agreements with countries, including Australia and New Zealand, China, India, Japan, and the Republic of Korea. Bilaterally, Myanmar has signed four memorandums of understanding on establishing bilateral joint trade commissions, with neighbouring countries such as Bangladesh, India, Thailand, and Viet Nam. It has also signed five border trade agreements, with China, India, Bangladesh, Thailand, and the Lao People's Democratic Republic (Lao DPR). Myanmar’s simple average MFN applied was 5.6 per cent in 2012 and 5.5 per cent in 2013. Imports from ASEAN and trading partners enjoy a preferential tariff rate different from other foreign imports. Prior to their abolishment in 2012, the longstanding fixed exchange rate system as well as a non-automatic import licence were also impediments to market access. However, since 2011, in order to increase the competitiveness and attractiveness of Myanmar to foreign investors, the government has implemented a number of policies, including improving support services, lowering export taxes, easing restrictions on the financial sectors, etc. As a least developed country (LDC), Myanmar is keen to take advantage of the special and differential (S&D) treatment provisions and technical assistance offered to LDCs. Moreover, it is also the beneficiary of the Global System of Trade Preferences among developing countries, the Greater Mekong Sub-region programme (together with Cambodia, Lao PDR, Thailand, Viet Nam and Yunnan province, China), as well as a number of GSP schemes given by Australia, Belarus, Japan, New Zealand, the Russian Federation, Switzerland, and Turkey etc.

Standard Compliance and Other Relevant Import/Export Restrictions

 Myanmar is adopting the SPS standards following those of Codex Alimentarius, ASEAN, and the World Organisation for Animal Health. The Ministry of Agriculture and Irrigation and the Ministry of Livestock, Fisheries and Rural Development are responsible for sanitary and phytosanitary (SPS) measures, while The Plant Protection Division of the Ministry of Agriculture and Irrigation is the competent authority to issue SPS certificates. SPS-related certificates are mandatory for: prepared food, fisheries; pharmaceuticals; pesticides; and crops, while import inspection permits are also needed for imports of live animals, animal products, animal feed and veterinary drugs. The Directorate of Investment and Company Administration (DICA), Ministry of National Planning and Economic Development, is the national enquiry point to the WTO regarding SPS issues. The Director General, Myanmar Scientific and Technological Research Department, Ministry of Science and Technology are serving as the national enquiry point of technical barriers to trade (TBT).

WTO, 2014, Trade Policy Review (Myanmar)