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.
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