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U.S. Resumes Consideration of Adding Burma as GSP Beneficiary

Wednesday, November 11, 2015
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative has reportedly resumed a review initiated in 2013 to determine whether to designate Burma as a beneficiary and/or least-developed beneficiary developing country under the Generalized System of Preferences. Burma’s previous designation as a GSP beneficiary was suspended in July 1989 due to worker rights issues. USTR launched a review of whether to restore Burma’s GSP eligibility in April 2013, but that review was put on hold when GSP itself lapsed. This past summer Congress retroactively reauthorized GSP through Dec. 31, 2017.

The decision to resume the USTR review could signal a renewed effort to further open up U.S.-Burma trade after decades of restrictions. In 2012 and 2013 the Obama administration took a number of steps to re-establish trade links with Burma in response to reforms implemented by that country’s ruling military regime. New investments in Burma were authorized and a long-standing U.S. ban on imports from that country was lifted. U.S. officials also raised the prospect of negotiating a bilateral trade and investment framework agreement and discussed potential opportunities under the Expanded Economic Engagement (E3) Initiative, a framework designed to expand trade and investment ties between the U.S. and the Association of Southeast Asian Nations.

A Reuters article notes that these changes helped increase two-way trade from less than $10 million in 2010 to more than $185 million in 2014. However, the article adds, that trend could soon be reversed because “Western banks are cutting trade finance in [Burma] after learning that part of the country’s main port is controlled by a man” subject to U.S. sanctions. According to the article, the Office of Foreign Assets Control is “considering possible solutions.”

On the other hand, Burma’s first free elections in 25 years were held this week and are expected to yield the first democratically-elected government there since the 1960s, with the party headed by Nobel laureate Aung San Suu Kyi set to oust the party run by the military junta.

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