Obama looks to boost trade ben­e­fits with pref­er­en­tial tar­iff

As Daw Aung San Suu Kyi ar­rived in Wash­ing­ton for a much-an­tic­i­pated meet­ing with Barack Obama, the US pres­i­dent an­nounced that Myan­mar should be re­in­stated in the ‘Gen­er­al­ized Sys­tem of Pref­er­ences’ scheme.

The Myanmar Times - - Front Page -

US Pres­i­dent Barack Obama last night moved to re­store trade ben­e­fits to Myan­mar that had been sus­pended more than two decades ago amid rights abuses.

In a let­ter to Congress – timed to co­in­cide with Daw Aung San Suu Kyi’s first visit to the White House since win­ning a his­toric elec­tion last Novem­ber – Mr Obama said Myan­mar should be able to ben­e­fit from pref­er­en­tial tar­iffs for poor coun­tries un­der the Gen­er­al­ized Sys­tem of Pref­er­ences scheme.

The move stops well short of scrap­ping all sanc­tions against the coun­try, which some con­tinue to ex­pect dur­ing Mr Obama’s meet­ing with the state coun­sel­lor.

The United States’ GSP, set up in 1974, strikes du­ties off im­ports that come from 122 coun­tries and ter­ri­to­ries. The sta­tus will grant Myan­mar tax priv­i­leges on ex­ports to the world’s largest econ­omy and in turn fuel for­eign in­vest­ment into the in­dus­trial sec­tor.

“GSP is the largest and old­est US trade pref­er­ence pro­gram,” ac­cord­ing to the Of­fice of the United States Trade Rep­re­sen­ta­tive.

Myan­mar’s GSP el­i­gi­bil­ity was sus­pended in April 1989, due to con­cerns about labour abuses. The coun­try has been seek­ing to re­gain the trade ben­e­fits since 2013, the same year it gained GSP sta­tus from the Euro­pean Union.

The move to re­in­state Myan­mar’s GSP sta­tus was made just months af­ter the Obama ad­min­is­tra­tion down­graded Myan­mar to the low­est tier sta­tus on the an­nual Traf­fick­ing in Per­sons re­port for fail­ing to curb en­demic forced labour tan­ta­mount to hu­man slav­ery. The de­mo­tion to tier 3 sta­tus opened the pos­si­bil­ity for fur­ther sanc­tions against the coun­try, which Mr Obama waived.

U Aung Win, vice chair of the Myan­mar Gar­ment Man­u­fac­tur­ers As­so­ci­a­tion, told The Myan­mar Times that GSP sta­tus could bol­ster in­vestor in­ter­est in the gar­ment sec­tor.

It was un­clear last night which sec­tors the spe­cial tar­iff pref­er­ences would be ap­plied to, and whether the fledg­ling gar­ment sec­tor would be in­cluded.

Over the next two days, Daw Aung San Suu Kyi will meet with as­sorted cabi­net sec­re­taries, fol­lowed by talks with Mr Obama and a cov­eted Oval Of­fice grip-and-grin photo shoot. Dis­cus­sions of re­tool­ing the re­main­ing US sanc­tions re­mained a pos­si­bil­ity as of press time.

The US pres­i­dent’s deputy na­tional se­cu­rity ad­viser Ben Rhodes has said the Obama ad­min­is­tra­tion is con­sid­er­ing steps that can be taken to en­cour­age US in­vest­ment in Myan­mar.

“It’s something that we con­tinue to look at be­cause the pur­pose of the sanc­tions regime was to sup­port a demo­cratic tran­si­tion, and some of the sanc­tions even were tied to the treat­ment of [Daw Aung San] Suu Kyi specif­i­cally,” he said at the ASEAN Sum­mit in Laos ear­lier this month.

Trade be­tween Myan­mar and the United States is still min­i­mal. Myan­mar’s to­tal bi­lat­eral trade for the 201516 fis­cal year to Novem­ber came to about US$17.1 bil­lion, ac­cord­ing to the Min­istry of Com­merce. Mean­while, bi­lat­eral trade be­tween Myan­mar and the US for the first six months of 2016 came to $238 mil­lion, ac­cord­ing to the US Cen­sus Bureau.

– AFP and Laignee Bar­ron

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