Myanmar coup to dampen U.S. trade, impact footwear companies, experts warn

Samsonite SA

01/02/2021 18:38

By Andrea Shalal
    WASHINGTON, Feb 1 (Reuters) - The coup in Myanmar is
expected to further dampen the already tepid interest of U.S.
and Western companies in investing in Myanmar, and may prompt
some big U.S. companies to pull out, trade experts and analysts
said on Monday.
    Total trade in goods between Myanmar 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% of total U.S. goods
imports, followed by luggage, which accounted for nearly 30%,
and fish, which accounted for just over 4%, according to
Panjiva, the supply chain research unit of S&P Global Market
Intelligence.
    Luggage maker Samsonite  1910.HK  and privately owned
apparel maker LL Bean are among the big importers of goods,
along with retailer H&M  HMb.ST  and Adidas  ADSGn.DE , Panjiva
said. 
    U.S. direct investment data is unavailable, the U.S. Trade
Representative's office said.
    In the early hours of Monday, Myanmar's army handed power to
military chief General Min Aung Hlaing and imposed a state of
emergency for a year, saying it had responded to what it called
election fraud.  urn:newsml:reuters.com:*:nL8N2K75GX
    The move sparked condemnation from Western leaders and
raised more questions over the prospect of the return of a
million Rohingya refugees.
    Lucas Myers, an analyst with the Woodrow Wilson
International Center for Scholars, said the coup would
exacerbate strains in the U.S.-Myanmar relationship following
sanctions imposed by Washington in December 2019 and would
further complicate trade ties.
    "On trade, the Rohingya situation and Myanmar's troubled
human rights record rendered investment less attractive for
Western firms as compared with China," Myers said.
    The administration of U.S. President Joe Biden on Monday
threatened to reimpose sanctions on Myanmar's military leaders.
 urn:newsml:reuters.com:*:nL1N2K71SB
    William Reinsch, a former senior U.S. Commerce Department
official and trade expert with the Center for Strategic and
International Studies think tank, said U.S. companies could opt
to pull out of Myanmar, 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
Myanmar 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. 
    The American Footwear and Apparel Association and the U.S.
Chamber of Commerce had no immediate comment. 

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Coup prompts outcry from Myanmar as West ponders how to respond 
   urn:newsml:reuters.com:*:nL8N2K75GX
Biden under pressure for strong U.S. response to Myanmar coup   
 urn:newsml:reuters.com:*:nL1N2K71SB
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 (Reporting by Andrea Shalal; additional reporting by Simon
Lewis; Editing by Heather Timmons and Rosalba O'Brien)
 ((andrea.shalal@tr.com; +1 202-815-7432;))