Sunday, August 20, 2017

Myanmar-EU investment treaty talks to spill into next year

The Myanmar-European Union investment protection agreement could be ready as soon as the beginning of 2016, according to U Aung Naing Oo, director general of the Directorate of Investment and Company Administration.

It is billed as the first standalone agreement on investment protection negotiated by the European Union, and would cover all 28 European Union members, as there is no single member with an existing investor protection agreement with Myanmar.

Investment protection agreements set up a legally binding level of protection for private investment in either country. The first round of negotiations to the agreement took place in February this year, and a second round in May.

There are a broad number of points contained in the agreement, which currently spans seven chapters. However, U Aung Naing Oo, who has led Myanmar’s half of the negotiations, said it has not been possible to finish this year due to elections, as one of the seven chapters in particular is currently only about 50 percent finished, and will require more discussion.

“This contract is very important. I want to get qualified foreign investment into this country,” he said following a forum at Yangon Economic University last week.

“Investment will create jobs for citizens, allows us to export more and will transfer technology to our citizens, but the firms must have quality ethics. We predict we will attract this kind of company. Most EU firms usually match with the local criteria we need.”

U Aung Naing Oo added that the EU is waiting for Myanmar’s response, and its companies will be more interested in investing locally after the agreement is finished.

The two sides have met three times, and have finished two of the seven chapters. Four more are nearly completed, while the seventh chapter is only half finished, he said, though he did not discuss what was included in that chapter.

More discussions are slated to be held in December or January.

Nicolas Von-Lingen, investment negotiator at the European Commission, said in a speech that putting an agreement into place will boost investor confidence.

The United Kingdom is the fourth-largest source of approved investment into Myanmar since 1988, with a total of $3.4 billion, or 7pc of the total, according to the Directorate of Investment and Company Adminisstration’s figures.

However, that total includes investment coming from the British Virgin Islands and so the figure is likely artificially high.

The next two largest investors are the Netherlands in eighth spot with $747 million in approved investment, and France in eleventh with $537 million.

U Aung Naing Oo added that the agreement will also cover Myanmar investors keen to enter European countries, particularly as Myanmar grows in wealth.

The European Union currently has a trade surplus with Myanmar, exporting about 494 million euros (US$553 million) worth of goods to the country in 2014, and importing 392 million euros.

The European Union also reinstated duty-free access for Myanmar investors under its Generalized Scheme of Preferences in July 2013, retroactive to June 13, 2012.

The scheme allows for duty-free and quota free access to the European Union for all of Myanmar’s exports except for arms and also ammunition.

The United States has not yet extended similar duty-free access to Myanmar.