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

Samsonite SA

01/02/2021 21:50

(Adds comment from trade group, H&M)
    By Andrea Shalal
    WASHINGTON, Feb 1 (Reuters) - The coup in Myanmar is
expected to 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%, said 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 big importers, 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.
    Myanmar'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.  urn:newsml:reuters.com:*:nL8N2K75GX 
    The move sparked condemnation from Western leaders and a
threat of renewed sanctions by the U.S. government, and raised
questions about the outlook for a million Rohingya refugees.
 urn:newsml:reuters.com:*:nL1N2K71SB
    Lucas Myers, analyst with the Woodrow Wilson International
Center for Scholars, said the coup would exacerbate strains in
U.S.-Myanmar ties following sanctions imposed by Washington in
December 2019 and would further complicate trade relations.
    "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.   
    William Reinsch, 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. 
    Stephen Lamar, president of the American Apparel & Footwear
Association, said many of the trade group's members did business
in 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.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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 in Washington and Anna Ringstrom in Stockholm; Editing by
Heather Timmons and Rosalba O'Brien)
 ((andrea.shalal@tr.com; +1 202-815-7432;))