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No Global Sourcing For A Myanmar Tuna Processing Industry

The European Union recently made the decision to grant trade benefits to South East Asian country Myanmar, allowing zero percent duty trade on numerous exports to the EU including the trade of fish under the General Scheme of Preferences (GSP).

Tuna is an important business in neighboring country Thailand, the global leading producer of canned tuna, with as many as 30 tuna processers operating within its borders. Thailand is currently subject to a considerable 24 percent duty on tuna trade to the EU, processing up to 3,000 tons of tuna per day.

But the decision from the Council of the European Union that took into consideration after recent positive political and human rights developments in Myanmar and made its conclusion to encourage positive changes in the country to continue, allows tuna to be exported from Myanmar to the EU duty free, but without granting global sourcing to the South East Asian country. To date no tuna processing plants are operational within the country.

A well informed EU official in Brussels said: “On Myanmar, there is no such thing as a global sourcing-type concession. The only development regarding EU trade relations with Myanmar, is their re-integration into the GSP scheme, which means complying with the standard GSP rules of origin.”

Without global sourcing, the granted trade benefits for Myanmar only apply to tuna caught by Myanmar vessels, a country that currently has no registered tuna purse seiners and no significant tuna resources in its waters.

With the condition that the processed fish has to meet the GSP rules of origin stated in the agreement, other countries would have little benefit in moving their processing tuna plants to Myanmar just to benefit from the lower duties. However Myanmar has been an important source of labor for Thai canners, who have a hard time finding locals willing to work in their factories. The enormous labor pool available and the low labor costs could however see a future development of tuna processing activities in the country.