Burma Hopes for US Return to Textile Industry

Daniel Schearf
March 06,2013

RANGOON — Before the United States began imposing trade sanctions against Burma, more than half of the country's textiles were exported to American consumers. With the suspension of U.S. sanctions, hopes are high that U.S. orders will revive the market. But garment industry insiders say U.S. labor and safety standards mean the process will be a slow one.

Shaking off the dust

This is the first time Aung Win has returned to a former textile factory since U.S. sanctions forced it to close down a decade ago.

The vice chairman of the Myanmar Garment Manufacturer's Association says the factory used to produce polo shirts and other knit clothing for American retail giants such as Kmart and Walmart.

But, when U.S. orders stopped, he says more than half of Burma's 300 textile factories closed down and thousands of jobs were lost.

"The quantity that we are receiving for these last few years the order quantity is small and the style is so many. So, everyone is waiting for the U.S. order because the quantity is big," Aung Win said. "So, the factory can make more money.

Most of the remaining manufacturers switched to supplying Korean and Japanese markets.

That has kept the industry afloat, but many acknowledge Asian suppliers have looser factory labor standards that may not meet U.S. requirements.

Meeting U.S. standards

Park Choong Youl, owner of World Apparel company, says the return of the American market is an opportunity for all.

"If the United States lifts the sanction on Burma, then the level of the garment business will be upgraded," he explained. "I wish to receive orders from the U.S. as soon as possible. The owners of other companies also want the U.S. to lift sanctions as soon as possible so they too can work on orders for the U.S.

Garment association chairman Aung Win says reaching U.S. compliance requirements can take up to a year and can be expensive.

Costly generators, to deal with frequent power cuts, and having to source materials from China puts the squeeze on smaller companies like Princess Power Manufacturing.

Princess Power Manufacturing Director Tun Tun says they want to attract U.S. investment, management, and technology but they have to first meet standards for environmental protection, welfare, and labor.

"If we can meet those criteria they will place orders. But, we are now just on the beginning of the changes. Maybe some of our factories they have already established the criteria set by the U.S., I mean U.S. investors," Tun Tun said. "Maybe some of us are not ready yet. But, we have to make changes.

Economic officer at the U.S. Embassy in Rangoon Machut Shishak, says he thinks American businesses can regain their lost ground in Burma.

"I think part of that is a desire to diversify their source of production, out of China out of Cambodia, perhaps to reduce the exposure to different sole dependence on particular countries, to diversify that. And, also there are some advantages here despite the challenges.

Burma's garment manufacturers say once U.S. investment arrives their main concern will be increased wage costs and competition for workers.