04/24/2012 01:41 EDT | Updated 06/24/2012 05:12 EDT

Canada Suspends Myanmar Sanctions, Cites Democratic Progress

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OTTAWA - Canada has suspended most of its sanctions against Myanmar in recognition of the country's moves towards democracy.

Foreign Affairs Minister John Baird said Tuesday he has seen encouraging steps in Myanmar since the former political prisoner Aung Sang Suu Kyi won a parliamentary seat in historic elections there earlier this month.

Baird said Canada's sanctions on imports, exports and financial transactions will be suspended, although an embargo will be maintained on sales of arms and military technology.

The minister visited Myanmar, also known as Burma, last month and personally conferred honorary Canadian citizenship on Suu Kyi, a Nobel laureate.

Baird also met members of Myanmar's new, reform-minded civilian leadership, and though impressed, said at the time he wanted to wait before easing restrictions on the repressive, military-ruled, South Asian country.

"This is progress, but much more remains to be done," said Baird.

He said the pace of reform remains fragile and Canada will be watching developments hopefully, but cautiously.

"We put in sanctions to try to encourage and force change," he said. "This is probably one of the best examples in the modern era where sanctions have proven very effective. Given the government has taken such significant reforms, we're prepared to give them a shot."

He said Canada would readily reinstate sanctions if reforms are reversed or abandoned. Myanmar has released hundreds of political prisoners and the media has been given more freedoms.

Earlier this week, the European Union suspended some sanctions against Myanmar for a year, but retained an arms embargo.

In the last year, the pace of change has been surprisingly swift in the South Asian nation of 60 million people.

Myanmar is a resource-rich country that has been largely off limits to Western companies, something Baird signalled is about to change.

"We hope there will be opportunities there. Obviously Burma is one of the poorest countries in the world and it's in desperate need of foreign investment to create jobs and create employment so people can provide for themselves and their family," he said.

"We hope the political reforms will lead to an opening up of the economy. And that would be good for the Burmese people."

The EU's suspension of economic sanctions against Myanmar has riled exiled activists. They are urging the United States to press for further reforms before following with its own easing of sanctions.

Baird defended Canada's course of action, saying Suu Kyi herself has called for it. "We'll take advice and counsel from her."

Baird said he planned to call his Burmese counterpart and Suu Kyi to personally deliver the news.

Baird said he asked his counterpart, Wunna Maung Lwin, in a previous meeting last summer to ensure Suu Kyi's safety and let her travel around the country.

When Baird emerged last month from meetings with Myanmar President Thein Sein, he noted that divisions remained within the military-dominated ruling party over the pace of change. He said Tuesday's easing of sanctions was intended to change minds.

"Some people are for reform ... some are sitting on the fence. And we want to say to those people sitting on the fence to join the camp for reform."

U.S. Secretary of State Hillary Clinton visited Myanmar in December, the first by a secretary of state in 56 years.

The U.S. has taken the lead in engaging Myanmar, but is moving more slowly than the EU in lifting sanctions.

It is upgrading diplomatic ties and plans to allow U.S. investment in some sectors, but only in areas it judges would benefit the broader population.