Myanmar-US: Trade agreement signed

Reading Time: 3 minutes

Thein Sein USMyanmar President Thein Sein has ended his  landmark visit to Washington D.C. on May 21 by securing a trade agreement with the Obama administration and also get backing from congress members for not renewing sanctions against the country which could technically be done every year.

A member of Thein Sein’s delegation, Myanmar’s deputy commerce minister Pwint San, signed a Trade and Investment Framework Agreement with acting US Trade Representative Demetrios Marantis. The agreement calls for the US and Myanmar to identify business initiatives that support ongoing reforms and development projects that benefit the Myanmar people, including the poorest. However, no specifics were provided.

With regards to sanctions, US President Barack Obama has already waived most sanctions against Myanmar but the congress has kept the laws active and subject to renewal each year, hoping that the threat of reimposing restrictions would motivate the government to address problems. It is widely expected that  there will be no renewal, but an import ban an gems from Myanmar to the US and on dealing with certain Myanmar individuals and companies on a US blacklist will remain intact.

Background

By Fabrizio Zumbo

For three decades Myanmar has faced diplomatic isolation and economic sanctions due to its military junta that has been ruling the country. However, with Myanmar embracing of democratic reforms over the past two years, the international community has quickly warmed up with the country.

At beginning of the 1990s, when the Junta established a military rule in the country, the US, the European Union and other countries imposed economic sanctions on Myanmar, conferring its status as an international pariah.

However, in 2011, when new president Thein Sein kicked off profound political and economic reforms, the wind changed which led the international community to gradually lift sanctions against Myanmar in concert with strengthening ties.

This rapprochement to the international community culminated with Thein Sein’s visit to the White House. During the visit,  Obama pointed out that the US appreciated the Myanmar leader’s efforts “in leading Myanmar in a new direction, and we’ve seen credible elections and a legislature that is continuing to make strides in more inclusivity and greater representation”.

Interest of the US private sector in Myanmar is also rapidly growingf. Car maker Ford has already opened its first dealership in Myanmar, and companies such as Cisco Systems and Microsoft are working with the Myanmar government in training local teachers and IT staff in computer programmes.

Myanmar is actually rich in natural resources, such as teak, gems, coal and copper. It has proven gas reserves of roughly 12 trillion cubic feet, and this means promising business for US companies. While the bilateral economic relations are still at an early stage, they have a huge potential to grow. According to Myanmar official statistics, US investments in Myanmar amounted to $243.56 million as of March 2013, with bilateral trade having reached $190.96 million in 2012.

In addition, Myanmar is extremely important for the US for many other reasons, particularly to rein in the increasing  economic presence of China in Southeast Asia. As a matter of fact, during the decades of Myanmar’s isolation, China became the country’s largest foreign investor, while US business had to stand on the sidelines.

“If Myanmar was to become a full-fledged client state of China, this would change the regional strategic balance,” Karl D. Jackson, a professor at Johns Hopkins University in Baltimore, said.

Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, added that “the Obama administration practically from day one has made re-engagement with Asia one of its top priorities,” pointing out the enormous interest the US has shown in Myanmar recently.

In this scenario, the improved relations of the US with Myanmar could rebalance economic power in Southeast Asia and moving the ASEAN region closer to the US. So far, the relations have been built on a mutual interest scheme that for sure will consolidate in the future taking into account the enormous economic development potential Myanmar has on its hands.

 

 

 

 

 

 

 

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Reading Time: 3 minutes

Myanmar President Thein Sein has ended his  landmark visit to Washington D.C. on May 21 by securing a trade agreement with the Obama administration and also get backing from congress members for not renewing sanctions against the country which could technically be done every year.

Reading Time: 3 minutes

Thein Sein USMyanmar President Thein Sein has ended his  landmark visit to Washington D.C. on May 21 by securing a trade agreement with the Obama administration and also get backing from congress members for not renewing sanctions against the country which could technically be done every year.

A member of Thein Sein’s delegation, Myanmar’s deputy commerce minister Pwint San, signed a Trade and Investment Framework Agreement with acting US Trade Representative Demetrios Marantis. The agreement calls for the US and Myanmar to identify business initiatives that support ongoing reforms and development projects that benefit the Myanmar people, including the poorest. However, no specifics were provided.

With regards to sanctions, US President Barack Obama has already waived most sanctions against Myanmar but the congress has kept the laws active and subject to renewal each year, hoping that the threat of reimposing restrictions would motivate the government to address problems. It is widely expected that  there will be no renewal, but an import ban an gems from Myanmar to the US and on dealing with certain Myanmar individuals and companies on a US blacklist will remain intact.

Background

By Fabrizio Zumbo

For three decades Myanmar has faced diplomatic isolation and economic sanctions due to its military junta that has been ruling the country. However, with Myanmar embracing of democratic reforms over the past two years, the international community has quickly warmed up with the country.

At beginning of the 1990s, when the Junta established a military rule in the country, the US, the European Union and other countries imposed economic sanctions on Myanmar, conferring its status as an international pariah.

However, in 2011, when new president Thein Sein kicked off profound political and economic reforms, the wind changed which led the international community to gradually lift sanctions against Myanmar in concert with strengthening ties.

This rapprochement to the international community culminated with Thein Sein’s visit to the White House. During the visit,  Obama pointed out that the US appreciated the Myanmar leader’s efforts “in leading Myanmar in a new direction, and we’ve seen credible elections and a legislature that is continuing to make strides in more inclusivity and greater representation”.

Interest of the US private sector in Myanmar is also rapidly growingf. Car maker Ford has already opened its first dealership in Myanmar, and companies such as Cisco Systems and Microsoft are working with the Myanmar government in training local teachers and IT staff in computer programmes.

Myanmar is actually rich in natural resources, such as teak, gems, coal and copper. It has proven gas reserves of roughly 12 trillion cubic feet, and this means promising business for US companies. While the bilateral economic relations are still at an early stage, they have a huge potential to grow. According to Myanmar official statistics, US investments in Myanmar amounted to $243.56 million as of March 2013, with bilateral trade having reached $190.96 million in 2012.

In addition, Myanmar is extremely important for the US for many other reasons, particularly to rein in the increasing  economic presence of China in Southeast Asia. As a matter of fact, during the decades of Myanmar’s isolation, China became the country’s largest foreign investor, while US business had to stand on the sidelines.

“If Myanmar was to become a full-fledged client state of China, this would change the regional strategic balance,” Karl D. Jackson, a professor at Johns Hopkins University in Baltimore, said.

Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, added that “the Obama administration practically from day one has made re-engagement with Asia one of its top priorities,” pointing out the enormous interest the US has shown in Myanmar recently.

In this scenario, the improved relations of the US with Myanmar could rebalance economic power in Southeast Asia and moving the ASEAN region closer to the US. So far, the relations have been built on a mutual interest scheme that for sure will consolidate in the future taking into account the enormous economic development potential Myanmar has on its hands.

 

 

 

 

 

 

 

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