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.