Report on U.S. Trade Sanctions Against Burma
Congressionally mandated report submitted to Congress on April 28, 2004.I. Introduction and Summary
Pursuant to section 8(b)(3) of P.L. 108-61 (the Burmese Freedom and Democracy Act of 2003), this report reviews bilateral and multilateral measures to promote human rights and democracy in Burma and assesses the effectiveness of the Actís trade-provisions relative to the improvement of conditions in Burma and the furtherance of United States policy objectives.
Over the past months, the import ban, combined with an array of other sanctions, has helped bring about some notable political responses. The Act initially encouraged ASEAN nations to take a critical stance on Burma. These pressures were likely a factor behind the junta's August announcement of a seven-step process for a democratic transition and the appointment of a new Prime Minister. While the Burmese government has released the majority of those arrested in connection with its attack on the National League for Democracy (NLD) on May 30, 2003, it has not yet released NLD leader and Nobel Peace Prize Laureate Aung San Suu Kyi and one other senior NLD leader.
Continued pressure by the U.S. government sends a clear signal to the junta that the U.S. seeks reform. Such pressure also serves as a strong symbol of support for the members of the democratic opposition, as they continue their struggle inside the country. Many of those who have fled from the oppression inside Burma have supported the U.S. position and have called for other countries to follow the U.S. lead.
The Administration continues diplomatic efforts, at all levels, to encourage other nations to sustain pressure on the Burmese junta. Some countries' governments are unlikely to do more than offer public support for a democratic transition, but it is through such sustained public messages that an atmosphere of change can come to Burma. U.S. punitive measures and calls for others to follow suit have not damaged U.S. relations with countries other than Burma. To date no other country has implemented U.S.-style economic sanctions. Cooperation on Burma issues with other members of the international community continues at the UN and in other multilateral fora, such as the International Labor Organization (ILO), and the Financial Action Task Force.
II. Bilateral and multilateral measures
The State Department also produces an annual report on the human rights situation in Burma. In 2003, the report noted that the Government's extremely poor human rights record had worsened, particularly highlighting the premeditated, government-sponsored, May 2003 attack on Aung San Suu Kyi and her supporters, in which government-affiliated agents killed as many as 70 pro-democracy activists. The report also noted that citizens of Burma still do not have the right to change their government, and that security forces continued to commit extrajudicial killings and rape, forcibly relocate persons, use forced labor, and have reestablished forced conscription of the civilian population into militia units. Other annual reports detail U.S. concerns for the situation in Burma in such areas as trafficking in persons, international religious freedom, and the control of narcotics.
In Burma itself, U.S. Embassy officials maintain frequent and active contacts with representatives of the democratic opposition and major ethnic groups to learn their views of the situation. Meetings with members of multilateral organizations and other diplomatic missions likewise help focus the international community's efforts in support of national reconciliation. Although Embassy officials have limited contact with Burmese government officials due to the poor state of U.S.-Burma relations, even limited contact is important to urging reform and facilitating communication by all parties. The continued detention of senior officials of the NLD as well as over one thousand political prisoners by the military junta blocks progress toward national reconciliation. The U.S. has repeatedly called and continues to call for the immediate and unconditional release of all political prisoners.
The U.S. coordinates with other members of the international community in support of democratic change in Burma. The U.S. has consistently co-sponsored resolutions at the UN General Assembly and the UN Commission on Human Rights that condemn the human rights situation in Burma and call for national reconciliation. Such resolutions support the ongoing efforts of UN Special Envoy Razali Ismail and UN Special Rapporteur for Human Rights Paulo Sergio Pinheiro. U.S. representatives participate in other UN discussions of Burma as part of the Informal Consultative Group on Burma and raised Burma at the Security Council under "Other Matters" in July 2003. Similarly, U.S. participants in the meetings of the ILO have been supportive of ILO efforts to eliminate the use of forced labor in Burma and to respect fundamental workers' rights.
Efforts by other governments
Canada has also expressed concern for the lack of progress in Burma and imposed visa and travel restrictions on Burmese officials in the wake of May 30. Under Canadian government and popular pressure, major Canadian investor Ivanhoe Mines is reported to be considering selling its operations in the country to Chinese investors.
Norway has sanctions similar to the EU, banning arms sales and enforcing a broad visa ban and asset freeze. In addition, Norway has been a supporter of the Burmese exile movement and hosts a radio service dedicated to providing uncensored information to those inside Burma.
Japan has frozen all new development assistance to the government in response to the May 30 attacks. However, Japan does continue funding, on a case-by-case basis, certain urgent humanitarian programs, democracy capacity-building projects, and those projects supporting economic structural reform. Senior Japanese officials, including Prime Minister Koizumi, have called for the release of Aung San Suu Kyi and progress toward democratization.
Since May 30, Australia has deferred its recurring human rights training program and put certain agricultural assistance programs on hold. Australian officials have also called publicly for Aung San Suu Kyi's release.
ASEAN nations issued an unprecedented call for change from fellow member state Burma at their June 2003 ministerial meeting. In mid-June, then Malaysian Prime Minister Mahathir issued a statement indicating the Burmese government's actions were creating a "dilemma for the [ASEAN] organization." However, at their October 2003 meeting in Bali, ASEAN states took a different path and welcomed "positive developments" in Burma, including the junta's road map to democracy. The U.S. continues its dialogue with countries in the region and has made clear the important role that ASEAN has to play in encouraging reform. Administration officials have noted to ASEAN counterparts that there would not be high-level U.S. participation in ASEAN events hosted by the Burmese junta in 2006 unless the country adopted significant reforms.
While we share with Thailand the goal of advancing democracy in Burma, our approaches differ. Thailand is unlikely to change its policies or adopt sanctions against Rangoon. Thailand, however, has played a critical role for many years as a refuge to Burmese fleeing their country, and we have stressed to the Thai the importance of continuing to fulfill this role and supporting UNHCR in its work with Burmese refugees. The Royal Thai Government has also organized the "Bangkok Process," envisioned to be a series of meetings of interested governments discussing political reform with the Burmese government. At the initial December 2003 meeting, all participants except India called on the Burmese junta to release Aung San Suu Kyi and include the democratic opposition in the democratic reform process. Neither the United States nor Burmese opposition groups were invited to the initial meeting, although some European countries participated. The United States did not seek to participate in this meeting.
China continues to be Burma's primary financial and one of its primary military supporters. Chinese officials participated in the Bangkok Process, though they did not make any public statements critical of the government's presentation. China has, however, expressed support for national reconciliation and according to some observers, is encouraging reform in discussions with the Burmese government.
India has neither provided strong public support for the democratic opposition nor called for an improvement in the human rights situation. Since the 1990s, India has vied with China for influence in Burma, sending high-level delegations, including a July 2003 visit by the Commerce Minister and a November 2003 visit by the Vice President, and offering significant financial and diplomatic support. Burma has also cooperated with India on the question of Indian insurgent groups operating out of Burmese territory.
United Nations efforts
The UN country team inside Burma has focused its efforts on a range of humanitarian issues. The United States backs UN initiatives to address the HIV/AIDS epidemic, support returned refugees, and fight narcotics. UN High Commissioner for Refugees (UNHCR) provides protection and humanitarian assistance for the communities of Muslim Burmese in Northern Rakhine State [Rohingya] who have returned to Burma after fleeing to Bangladesh in 1991. UNHCR representatives recently gained access to areas in the east of the country to begin measures to create the necessary conditions for the large-scale return of refugees from Thailand. U.S. officials in Rangoon maintain close communication with UN counterparts.
III. Effects of trade-related measures
Political and economic situation
In September 2003, Aung San Suu Kyi was moved from prison to house arrest, and in November, five of the NLD's most senior leaders were allowed out of their homes. Two more were released from detention in April 2004. Aung San Suu Kyi and one other senior NLD leader remain under house arrest. NLD officials who participated in the Convention in the mid-1990s have been invited to attend the one that will convene in May. The NLD Central Executive Committee has called for the procedures of the Convention to be in line "with democratic principles."
In recent months, the military junta and Burmaís largest remaining ethnic insurgent group, the Karen National Union (KNU), entered into serious cease-fire negotiations. KNU leader General Bo Mya visited Rangoon in January, and subsequent talks in February helped to secure progress toward a lasting cease-fire. If a final agreement between the parties is reached, it could end over five decades of conflict, and could open up Karen and Mon States for badly needed international economic and humanitarian assistance and the eventual voluntary repatriation of thousands of refugees from Thailand with UNHCR involvement and return home of thousands of internally displaced persons. Over twenty groups have concluded cease-fire agreements with the junta.
It is the Burmese junta's dismal economic policies that have led to widespread poverty and the flight of most foreign investors from the country. Likewise, Burma's dreadful employment situation reflects decades of economic mismanagement by the Burmese government. However, the 2003 U.S. ban on Burmese imports had an impact on at least one sector of the economy: the garment industry. More than 100 garment factories, already in dire economic straits, that had relied on exports to the United States have now closed. There has been an estimated loss of around 50,000 to 60,000 jobs. However, new orders from importers in EU member countries helped remaining factories continue production.
Our expanded sanctions represent a clear and powerful expression of American opposition to the developments in Burma over the past year and signal strong support for the pro-democracy movement. Sanctions are a key component of our policy in bringing democracy to Burma and have been a key source of support for the morale of many democracy activists.
IV. Effects of sanctions policy on broader policy interests and relations
It is U.S. steadfastness that sends a clear signal to the junta of U.S. support for change. The measures in place have the broad backing of Burmese democracy activists.
Although the EU and others have taken some steps, no other country has taken measures similar to those of the U.S. We continue diplomatic efforts at all levels to urge other countries to adopt broad sanctions similar to ours or targeted approaches to dealing with Burma. We have found that many in the international community have a different view on how best to achieve our shared goals in Burma.
The trade-related sanctions implemented pursuant to the Burmese Freedom and Democracy Act of 2003 have had limited impact on U.S. relations with other nations. Although some foreign businesses have complained about the impact on their operations, all who have invested in Burma have done so recognizing the difficult operating environment and overall poor economic climate fostered by the junta. Furthermore, many U.S. and other companies had already pulled out of Burma prior to the passage of the Burmese Freedom and Democracy Act of 2003.
International pressure and support for the Burmese democracy movement is essential for promoting change in Burma. However, the import ban implemented in 2003 would be far more effective if countries importing Burma's high-value exports (such as natural gas and timber), which also tend to have closer economic links with the SPDC, would join us in our actions. Other U.S. measures, such as the ban on new investment in Burma and the ban on the export of financial services to Burma would also be more effective were the EU and others to take similar steps. The Administration remains unwavering in its support for the establishment of democracy and a greatly improved human rights situation in Burma.