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U.S. Moves to Boost Myanmar Trade Ties After EU Lifts Sanctions

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April 25 (Bloomberg) -- The U.S. is moving to boost trade ties with Myanmar days after the European Union lifted sanctions as companies seek access to the former military regime sandwiched between China and India.

Acting U.S. Trade Representative Demetrios Marantis headed to Myanmar yesterday to begin talks on a framework agreement covering trade and investment, he said in a telephone interview from Hanoi, where he met with Vietnamese government officials. Three days ago, the EU cited Myanmar’s “remarkable process of reform” in eliminating all punitive restrictions except for an arms embargo.

The talks in Myanmar reflect “the great interest that we’re hearing from stakeholders back in the United States about that market,” Marantis said yesterday.

Myanmar President Thein Sein’s shift toward democracy since taking power two years ago has bolstered trade ties with Western nations, attracting companies such as Google Inc., General Electric Co. and Norway’s Telenor ASA. Human rights groups have warned that lifting sanctions may lead to abuses as anti-Muslim violence spreads in the country.

Marantis’s visit “will give a strong signal that the U.S. is serious about lifting restrictions,” said Jean-Pierre Verbiest, former Thailand country manager for the Asian Development Bank who works with West Indochina, which advises businesses in Myanmar. “Japan is very much present already, the EU is moving fast, China has been there for a long time. The U.S. is at a competitive disadvantage.”

Myanmar Junta

President Barack Obama last year authorized U.S. companies to invest in Myanmar for the first time since 1997, while continuing to block ventures with businesses connected to Myanmar’s former junta. Since then the U.S. has also authorized imports of most goods from Myanmar and allowed U.S. citizens to open accounts at four banks in the country.

The U.S. has Trade and Investment Framework Agreements with dozens of countries to outline “principles for dialogue” on trade and investment issues, according to the USTR website. The agency this month also proposed giving Myanmar and neighboring Laos preferential access to the U.S. market under a program to boost trade with poorer countries.

Human Rights Watch accused Myanmar’s government of ethnic cleansing in displacing more than 125,000 Rohingya Muslims. The New York-based group later criticized the EU’s move to lift sanctions on Myanmar.

Gains Imperiled

“The EU’s scrapping of targeted sanctions on Burma is premature and recklessly imperils human rights gains made so far,” Lotte Leicht, EU director at Human Rights Watch, said in an April 22 statement. “EU member states are ditching measures that have motivated the current progress and gambling on the good will of Burma’s government and military to keep their word to keep reforms on track.”

Violence between Rakhine Buddhists and Muslim Rohingya last year in a western border area killed about 180 people and displaced more than 100,000. Last month, anti-Muslim violence in central Myanmar killed more than 40 people, displaced 20,000 others and left about 1,400 buildings destroyed, including mosques.

The U.S. engagement with Myanmar is in line with Obama’s goal of increasing trade throughout Asia. Before stopping in Myanmar, Marantis visited Vietnam and Indonesia, where he discussed the Trans-Pacific Partnership, a proposed trade accord that would include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the U.S.

Last week the TPP countries paved the way for Japan to join the talks. Other countries that have expressed interest in the agreement include Thailand and the Philippines, Marantis said.

“There are a number of other countries that I think are interested, but it may be more of a long-term horizon,” Marantis said. “They may be more interested in joining once we’ve concluded this first tranche of TPP negotiations.”

To contact Bloomberg News staff for this story: Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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