US Temporarily Lifts Ban on Trade Through Myanmar Ports

2015-12-08
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A truck drives past a cargo container yard at a port in Yangon, March 2, 2015.
A truck drives past a cargo container yard at a port in Yangon, March 2, 2015.
AFP

The U.S. has temporarily lifted a ban on trade through Myanmar’s ports following a sweeping election victory by Aung San Suu Kyi’s opposition National League for Democracy (NLD) party, in a move welcomed Tuesday by the country’s government.

While the U.S. lifted most trade restrictions against Myanmar after President Thein Sein’s quasi-civilian government took power from the country’s former military regime in 2011, an embargo remains on the many business interests of the junta-era elite, which include several key export and import points.

On Monday, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced a six-month lift on the ban, citing “unintended interruptions” in trade, with a measure it said would support exports to and imports from Myanmar “while maintaining the integrity of U.S. sanctions and pressure.”

Among sanctions that remain in place are bans on new investment with Myanmar’s Ministry of Defense and blacklisted firms, as well as the importation into the U.S. of Myanmar-origin rubies, jadeite, and jewelry containing them, OFAC said.

It said the decision was “not a response” to the Nov. 8 election—seen as the country’s first free polls in 25 years—noting that the NLD, the current government and the military have yet to implement the opposition party’s landslide win in the polls.

The U.S. will continue to review its policies on Myanmar based on a range of issues, including the political transition, the peace process with armed ethnic groups, the country’s rights record and constitutional reform, the announcement said.

Observers say a major effect of the decision will be the removal of restrictions on payment of fees for the use of the Asia World Port Terminal, which handles around half of Myanmar’s trade, in the country’s commercial capital Yangon.

The port is run by Myanmar conglomerate Asia World, which is owned by business tycoon Steven Law, who has been accused of ties to the drugs trade. He and his father, the late Lo Hsing Han, were put on the U.S. Treasury’s Specially Designated Nationals (SDN) list in 2008.

In October two U.S. bank associations requested that OFAC grant special permission to use the port, arguing that continued blockage would constitute a trade embargo.

Myanmar Information Minister Ye Htut on Tuesday welcomed the decision, saying “the lifting of trade sanctions during President Thein Sein’s reform period was one of our biggest objectives.”

But he said Washington should remove all sanctions on Myanmar if the U.S. hopes to benefit from its rapidly reforming economy and gain greater influence on the country’s political affairs as it transitions to a democracy.

“Even with a stable political situation in place, our farmers, workers and industrial businessmen won’t see development and economic opportunities as long as we have U.S. trade sanctions in place,” Ye Htut told RFA’s Myanmar Service.

“Not only the people of Myanmar but also U.S. businesses will lose opportunities, while Washington will miss a chance to become more involved in Myanmar politics if it only lifts trade sanctions temporarily.”

Ye Htut said that as long as trade sanctions remain in place that affect businesses producing garments and agricultural products, the lives of “millions of workers and farmers” will remain compromised.

He acknowledged that some of Myanmar’s most senior military officials “are involved in the business interests of [junta] cronies” targeted by U.S. sanctions, either directly or through family members, but said the government is working to level the playing field for all.

“[We are trying to bring about] equal opportunity for all businessmen and transparent competition through new economic reforms,” he said.

‘Good opportunity’

Agence France-Presse on Tuesday quoted Thet Thet Khine of the Union of Myanmar Federation of Chambers of Commerce and Industry as calling the lifting of sanctions “a good opportunity for the country because we lived in a closed system for 50 years, without good access to international trade.”

“The more open a country is to foreign trading, the more it will develop," added the businesswoman, who will also enter parliament next year as a lawmaker for the NLD.

Reuters news agency cited a senior U.S. official as saying the move would lend support to the NLD, and was “potentially the single most important thing that we can do on the economic front immediately to give the NLD some breathing space over the next several months as it forms its government.”

The official said the freeze on much of Myanmar’s trade with the West was most punishing on regular citizens of Myanmar, such as rice farmers whose trade transactions are “held up and the rice ends up rotting in the docks.”

The Treasury Department’s announcement comes a week after Myanmar’s Ministry of Commerce said it would allow limited onshore imports by international firms for the first time and amid relaxed restrictions for U.S. companies interested in doing business in the country.

The six-month lifting of the trade ban will conclude in June next year, at which point the NLD is expected to have its new government in place and ministers appointed. U.S. President Barack Obama’s administration can then decide whether to renew the order, let it expire or further ease barriers to trade.

Reported by Thin Thiri for RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Joshua Lipes.

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