A prominent U.S. lawmaker has said he plans to let sanctions legislation against Myanmar lapse, making the announcement as Myanmar President Thein Sein wrapped up a historic visit to Washington that saw the two countries ink an unprecedented trade and investment agreement.
Senate minority leader Mitch McConnell voiced his support for dropping the sanctions Tuesday after meeting Thein Sein along with several other legislators who have helped to shape U.S. relations with the country also known as Burma, including Senators Harry Reid and Lindsay Graham.
On Monday, Thein Sein became the first leader of Myanmar to visit the White House in nearly five decades and was hailed by his counterpart President Barack Obama for the democratic changes he has implemented since taking power from the country’s military junta in 2011.
While Obama has waived the majority of sanctions against Myanmar enacted to punish rights abuses by the former regime, the legislation enabling the sanctions has remained in place, with Congress using the threat of their renewal as leverage meant to encourage further reforms.
But McConnell—the Republican Party’s lead senator who had pushed for sanctions against Myanmar over the past two decades—said he would no longer support a ban on imports from the country when it comes up for renewal.
A lapse in legislation would mean that Washington could not reimpose the ban if Myanmar backtracks on reforms.
“I believe renewing sanctions would be a slap in the face to Burmese reformers and embolden those within Burma who want to slow or reverse reform,” Agence France-Presse quoted the lawmaker as saying.
“Many of us who have followed Burma for years never thought reform would come to this troubled country. This is an important moment and I believe it is time for Congress to take responsible action," he said.
McConnell said that not renewing the trade restrictions would also allow U.S. companies looking to invest in Myanmar to gain an equal footing with their Western competitors in the European Union, which last month lifted its economic sanctions against the former pariah nation.
He said Congress would retain leverage on Myanmar through other sanctions that remain on the books.
Trade agreement
McConnell’s change of tack followed an announcement by the Office of the United States Trade Representative (USTR) Tuesday that Washington and Naypyidaw had signed an agreement to promote cooperation on trade and investment.
“As part of this dialogue, the two sides will work together to identify initiatives that support the ongoing reform program and promote inclusive development that benefits the people of Burma, including the poorest segments of its population,” the USTR said.
U.S. Trade Representative Demetrios Marantis, who signed the pact along with Myanmar’s deputy commerce minister Pwint San, said that Washington is in support of far-reaching economic reforms by Myanmar’s new leadership, which is seeking greater investment from the U.S. and other nations.
“Economic reforms and trade are mutually supportive. Stronger institutions, transparency, and rule of law create stronger foundations for commercial transactions, trade, and investment,” Marantis said.
On Wednesday, the International Monetary Fund (IMF), which is the investment arm of the World Bank, said that reforms in Myanmar had grown the country’s economy by 6.5 percent last year and are likely to fuel additional acceleration.
The IMF predicted that Myanmar’s economy would grow by around 6.75 percent in the 2013-2014 financial year, driven by gas production and investment.
“The authorities’ ambitious reform program is bearing fruit, with macroeconomic stability and high investor interest,” the IMF’s Matt Davies said, marking the end of a mission this month to the country, whose economy had stagnated for decades due to misrule by the former junta.
“International reserves will continue rising as foreign direct investment inflows outweigh a widening current account deficit,” he said.
Myanmar is expected to draw significant foreign investment as companies look to cash in on the country’s huge amount of extractive and timber resources, as well as its large population.
Hurdles remain
But while the U.S. government and the international investment community have showered praise on Myanmar’s leadership for its ambitious reforms, hurdles remain for the fledgling government as the country pushes forward on its path to becoming a democratic nation.
On Tuesday, members of the U.S. House of Representatives pressed Thein Sein to release the country’s estimated 200 remaining political prisoners, who rights groups say have been used as a form of leverage in matters of international diplomacy.
His government has also faced criticism for falling short of pledged reforms and failing to address abuses, including ethnic violence against Muslims in Rakhine state and central Myanmar over the past year.
Two outbreaks of violence in Rakhine state last year left nearly 200 dead and hundreds of thousands of ethnic minority Muslim Rohingyas displaced, while clashes in central Myanmar this spring killed dozens.
Thein Sein’s government has yet to forge a lasting peace with several ethnic minority militias in the country’s borderlands, including with the Kachin Independence Army (KIA) in northern Myanmar’s Kachin state.
Protesters had gathered outside the White House on Monday during Thein Sein’s unprecedented visit with Obama at the Oval Office, warning that Washington’s welcome of the ex-general was likely to take pressure off of his government to proceed with reforms.
U.S.-based Human Rights Watch cautioned that “if the U.S. keeps delivering carrots on the same schedule while Burma breaks its promises, Burma’s leaders will conclude that they are no longer under serious international pressure to follow through on reforms.”