G-to-G agreement vital for Sino-Myanmar border trade: merchants

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Trucks from Myanmar carrying agro-products seen near China-Myanmar border in Muse Township, nothern Shan State. Photo: Ban Ryo Htan (IPRD)

Myanmar merchants have called for a government-to-government (G-to-G) agreement with China to improve bilateral border trade.
“While Myanmar claims its export channels are legitimate, China considers some trade illegal, resulting in confiscation of goods. Since mid-October, the volume of rice exported to China has dropped,” said Dr. Soe Tun, executive member of the Myanmar Rice Federation (MRF).
“We claim trade through the Muse gate is legal, but it is considered illegal by China. We need to negotiate with China. We need a bilateral agreement between the two countries. There are also issues with exporting goods legally to China as the tax levied by it is too high for traders to pay. China has set import duties of 35 to 100 per cent. On some goods, duties of up to 150 per cent are imposed. Therefore, we need to discuss tax relief with China as our country is listed as a LDC. And then, we have to work to get a G-to-G agreement. Only in this way will we be able to deal with tight confiscation by China in the border areas,” said Dr. Soe Tun.
Although we are exporting goods through the legal channel, the flow of income needs to be better managed, he said.
“We have reported this to the national economic coordination committee. Traders are using an informal remittance transfer channel like Hundi. Therefore, the government does not have a current account statement for income from trade. We need to figure out a better payment system,” he said. “At present, rice exports to China through the border channels have declined by half. Starting from 18 January, the European Union reinstated tax on Indica rice for three years. The government needs to tackle those difficulties in rice exports,” said U Nay Lin Zin, the secretary general of Myanmar Rice Millers’ Association.
“Myanmar’s rice exports are mainly driven by the private sector. However, trade with business-to-business agreements has certain limitations. Border trade has currently dropped by almost half. Additionally, the market for quality rice in the EU is likely to shrink. We find export performance through the G-to-G channel weak. As the scope of the private sector is limited, the public sector needs to lead the chain. It should be implemented at the soonest,” said U Nay Lin Zin.
This being the case, we will forward a report to the Ministry of Commerce, stated the MRF. “We encourage export promotion. We plan to meet the prescribed quality standards,” said U Aung Soe, the Director General of the Trade Promotion Organization under the Ministry of Commerce.
Myanmar conducts trade with China through the Muse, Lwejel, Chinshwehaw, and Kanpiketee gates, with Muse handling the largest volume of trade among the border checkpoints.

By Nyein Nyein

(Translated by Ei Myat Mon)

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