BY ALINN YAUNG

 

 

Illegal trade patterns

As illegal trade slows down the country’s economic develop­ment and undermines the produc­tion, market competitiveness, and capabilities of local manufacturing enterprises, it must be prevented.

 

Among the many forms of illegal trade, they can generally be categorized as follows:

(a) Smuggling

(b) Counterfeit and import­ing counterfeit goods

(c) Parallel Trade legally and illegally

(d) Trading undervalue

 

While analyzing illegal trade, about 60 per cent is smuggling, about 30 per cent is trading under­value, and 10 per cent is parallel trade.

 

Illegal trade with ASEAN

Illegal trade is a major issue affecting almost all sectors in ASEAN and around the world. The rise of illegal trade in ASEAN has caused financial losses to govern­ments and legitimate businesses, as well as biodiversity. Studies have found that human lives and human rights are significantly af­fected. The main sectors affected by illegal trade within ASEAN are tobacco, alcohol, beverages, toys and games, vehicle parts, medi­cine, agricultural chemicals and pesticides, copyright piracy and so on. In addition, illegal imports through e-commerce channels or online shopping have increased illegal trade.

 

Myanmar and Illegal Trade

Myanmar is a country rich in natural resources, and it is also a primary source of jade, which is considered to be the best in the world. In 2015, Global Witness, an international NGO, reported that about 80 per cent of the jades produced in Myanmar are ille­gally exported, and the country is losing a lot of tax revenue. In addition, illegal logging, illegal im­portation of disqualified products, counterfeit or unregistered drugs and dangerous goods were also found. If an analysis of illegal trade by category of product is made, mineral ores, various metals, pre­cious metals and rare elements are found in the export sector, and various electrical and electronic equipment, textiles and clothing, machines, machinery equipment and other goods are found in the import sector.

 

Comparing Trade Statistics with Trading Partners

According to the reports pre­sented by the Union of Myanmar Federation of Chambers of Com­merce and Industry (UMFCCI), which is composed of traders and entrepreneurs dealing with Myan­mar’s trade issues, in the compar­ison of Myanmar’s official trade statistics to that of trading part­ner countries, it was found that there was a difference of US$3.039 billion in the export sector and US$8.91 billion in the import sec­tor with a total of US$11.949 billion in 2019. In addition, the difference in trade figures was also found to be US$11.743 billion in 2021, and this difference is generally as­sumed to be illegal trade volume.

 

Harms Caused by Illegal Trade

The above-mentioned illegal trade causes loss of State revenue, loss of foreign reserves, incorrect statistical information, impacts on foreign investments, and harm to local businesses, production, consumers, the public and the environment.

 

In the report released by the Transnational Alliance to Com­bat Illicit Trade (TRACIT) in 2020, Myanmar’s illegal trade market is about US$4.6 billion per year, and it has been observed that an­ti-illegal trade plays a crucial role for the nation, and ASEAN coun­tries should focus on the following points in combatting illegal trade:

 

(a) Strengthening Rules of Law

(b) Strengthening customs environment

(c) Promoting a clean digital environment

(d) Tackling illegal trade in the courier and postal sector

(e) Raising awareness pro­grams on illegal trade

 

Therefore, in order to com­bat illegal trade threatening so­cioeconomic sectors of ASEAN countries, including Myanmar and the world, all stakeholders, includ­ing relevant departments, need to take it as a national responsibility and continuously cooperate with each other.