On March 29th, the Office of the United States Trade Representative (“USTR”) announced the suspension of all U.S. engagements with Burma (Myanmar) under the 2013 Trade and Investment Framework Agreement (“TIFA”), effective immediately. Pursuant to this announcement, the United States will be suspending all government-to-government meetings following the military coup that occurred in February and the related escalation in violence by Burma’s military against its people. As a result of the announcement, U.S. federal agencies, including the Office of the United States Trade Representative and U.S. Customs Border Protection (“CBP”), will not be allowed to meet with their counterparts or other government officials in Burma to discuss trade or other issues until a democratic government is re-established.
Significantly, the suspension does not mean the United States is banning or prohibiting imports from Burma. However, we caution that the U.S. has placed sanctions through the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) on a number of Burmese Specially Designated Nationals (SDNs) that prohibit business with these SDNs as well as entities meeting certain ownership interests with the SDNs.
Also, as the importing community is aware, the Generalized System of Preferences (“GSP”) lapsed on December 31, 2020. We expect that Congress will pick up GSP renewal later this year. Nevertheless, if/when the GSP gets renewed, Burma may be excluded (again) due to ongoing labor concerns. If the current military regime is in place when the renewal is under consideration, then we would expect that Burma will be excluded from receiving GSP benefits.
We further believe that it would be prudent for importers to carefully review supply chains involving Burma for labor issues. As companies are aware, CBP has been more active in issuing Withhold Release Orders and this has continued into the Biden Administration with the recent forced labor finding on disposable gloves from Malaysia. For any company relying on goods from Burma, we recommend auditing the supply chain for labor issues and documenting the results.
Husch Blackwell will continue to monitor the situation in Burma and provide updates as more information becomes available. Should you or your company have any questions, please contact Robert Stang of Husch Blackwell’s International Trade and Supply Chain team.