The Myanmar Ministry of Commerce has announced that it would allow foreign firms currently partnering with Myanmar companies [ as joint ventures] to perform trading, in preparation for the full implementation of the ASEAN Economic Community (AEC). In a directive issued on November 11th, these firms will be allowed to do trading as well as the previously sanctioned service industries.
An official from the ministry said that," it is no longer suitable to deny them[ foreign firms ] trading rights. We will eventually ease off the restrictions but will start first with those areas in which domestic traders cannot cope well. The list of tradable commodities include: fertilizers, seeds, pesticides and hospital equipment. Dr Maung Aung, an advisor to the Ministry said that," since hospital equipment are so expensive, only foreign firms have the necessary capital and what's being done now is illegal trade so that we would like to legalize it. He continued that,"pesticide usage is quite low domestically and the prices are also high; we would like to see a more competitive market with lower prices and more consumption.
Chair of the Hlaingtharyar Industrial Zone, U Myat Thin Aung, who is also trading in medical products under the AA Medical Product company name told us that it [ opening markets] is inevitable with the imminent arrival of the AEC. Current traders must accept the situation which could lead to consumers having a wider choice with more reasonable pricing. Even though it might not be favorable for them, they have to compete in the competition which has begun.
The Ministry further stated that the policy changes in the Agricultural and Healthcare sectors are the forerunners and will shortly be followed by other sectors. However, the deregulation will affect only imports; exports will be confined to those producers with high quality products and factories situated in SEZ's.
Dr Maung Maung Lay, a medical product importer, said that this change could allow the import of hospital equipment costing over millions of USD and would improve trade.
Those foreign firms applying for a trade permit must follow the same procedure as domestic companies and trade volume will have to be strictly in line with officially declared foreign exchange.