| Summary/Abstract |
The European Union (EU) re-instated the Generalized System of Preferences (GSP) for Myanmar from 2013 following the newly established “democratic” government in 2011. This paper highlights a series of democratic reforms in Myanmar as a key driver of the EU’s GSP re-instatement. We estimate the causal impact of duty-free access on Myanmar’s exports by exploiting the fact that the GSP re-instatement corresponded to a removal of Most-Favoured-Nation tariff rates in the EU market, which was plausibly exogenous for industries in Myanmar. The results show that the GSP re-instatement had a significantly large positive effect on Myanmar’s exports, with the most pronounced impact on the volume of garment exports. The EU’s GSP played a key role in linking democratic reforms to subsequent trade growth in Myanmar.
|