EU formally reopens market to Myanmar

French President Francois Hollande (L) shakes hand with President of Myanmar Thein Sein as he arrives at the Elysee Palace in Paris, July 17, 2013.

BRUSSELS - The European Union formally reinstates preferential trade terms for Myanmar on Friday following the country's efforts to improve the political situation as well as its labour and social systems.

"Trade is fundamental to supporting political stability and the EU's trade preferences mean we will give this reform-minded country priority access to the world's largest market," said the EU's trade commissioner Karel De Gucht.

Exports to the 28-nation bloc last year totalled a mere 164 million euros, largely made up of clothing.

The EU will also help the former pariah state to boost the capacity of both public and private firms to make use of the new opportunities, De Gucht said.

Myanmar's membership of the EU's preferential scheme, enabling duty-free quota-free access to the European market for everything but arms, was withdrawn in 1997 due to concerns over the use of forced labour under the then-military junta.

But the EU said the International Labour Organisation had last year reported "necessary improvements" to labour practices in Myanmar, which was formerly known as Burma.

The trade preferences in consequence will be applied retroactively as of 13 June 2012, the day when the ILO first recognised progress in the labour rights situation in Myanmar.