WASHINGTON—The coup in Burma is expected to dampen the already tepid interest of U.S. and Western companies in investing in Burma, and may prompt some big U.S. companies to pull out, trade experts and analysts said on Monday.
Total trade in goods between Burma and the United States amounted to nearly $1.3 billion in the first 11 months of 2020, up from $1.2 billion in all of 2019, according to U.S. Census Bureau data.
Apparel and footwear accounted for 41.4 percent of total U.S. goods imports, followed by luggage, which accounted for nearly 30 percent, and fish, which accounted for just over four percent, said Panjiva, the supply chain research unit of S&P Global Market Intelligence.
Luggage maker Samsonite and privately owned apparel maker LL Bean are among big importers, along with retailer H&M and Adidas, Panjiva said.
U.S. direct investment data is unavailable, the U.S. Trade Representative’s office said.
Burma’s army on Monday handed power to military chief General Min Aung Hlaing and imposed a year-long state of emergency, saying it had responded to what it called election fraud.
The move sparked condemnation from Western leaders and a threat of renewed sanctions by the U.S. government.
Lucas Myers, analyst with the Woodrow Wilson International Center for Scholars, said the coup would exacerbate strains in U.S.-Burma ties following sanctions imposed by Washington in December 2019 and would further complicate trade relations.
William Reinsch, trade expert with the Center for Strategic and International Studies think tank, said U.S. companies could opt to pull out of Burma, given new developments and the Biden administration’s vow to focus more on human rights.
While some U.S. companies had moved work from China to Burma in recent years to take advantage of lower wages, the country’s infrastructure was still lacking, which had kept investment from booming, he added.
Most of the U.S. work was in relatively low capital-intensive industries and could be relocated fairly easily, Reinsch said. “It’s not semiconductors. These factories are relatively easy to set up,” he said.
Stephen Lamar, president of the American Apparel & Footwear Association, said many of the trade group’s members did business in Burma, also known as Myanmar, and found the coup deeply concerning.
“We urge the full and immediate restoration of democratic rights and institutions,” he said. “Our hearts and prayers are with the Myanmar people for a swift, peaceful, and democratic resolution to this crisis—one that does not take away the economic progress made by the hardworking people of Myanmar.”
A spokesperson for H&M said the company was monitoring events and was in close contact with suppliers, but had no immediate plans to change its sourcing strategy. “We are closely following the developments, but refrain from speculating about what this will mean for us going forward,” the official said.
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