* EU taking steps to suspend Myanmar sanctions
* West welcomes rapid democratic transition
* Suspension of sanctions underscores caution
* Arms embargo to remain, diplomats say
(Adds details, background)
By Justyna Pawlak
BRUSSELS, April 19 European Union governments
are to suspend most sanctions against Myanmar next week, EU
diplomats said on Thursday, in recognition of rapid political
and economic reforms after decades of military dictatorship.
Envoys of EU governments reached a preliminary deal on the
issue late on Wednesday and foreign ministers of EU states are
expected to approve the move formally at a meeting in Luxembourg
on April 23, after which it can take effect, diplomats said.
The suspension of EU sanctions, which include a ban on
investment and trade related to timber and mining, is likely to
open doors to a flood of investment in the country which
neighbours the world's two biggest markets, China and India.
"There is now agreement in principle (on) ... a suspension
of all sanctions, except for the arms embargo," one EU diplomat
said, speaking on condition of anonymity.
EU diplomats say sanctions are being suspended - not lifted
altogether - to maintain pressure on Myanmar's quasi-civilian
government to keep up democratic transition.
Opposition leader Aung San Suu Kyi, long an advocate of
sanctions imposed for human rights abuses by Myanmar's military
rules, has spoken in support of such an approach.
British Prime Minister David Cameron also urged caution,
when addressing parliament on Wednesday about Myanmar:
"While it is clear that the ... regime is making some steps
towards greater freedom and democracy, we should be extremely
cautious and extremely careful," he said.
"We want to see the further release of political prisoners,
we want to see the resolution of ethnic conflicts, we want the
democratisation process to continue."
EU governments are keen to ease access to Myanmar for their
businesses, hoping to capitalise on the country's rich natural
resources, proximity to large markets and vast tourism
potential. European firms fear Asian rivals are securing a
foothold and already boosting their presence.
The U.S. Treasury on Tuesday relaxed sanctions on Myanmar to
permit financial transactions to support certain humanitarian
and development projects.
(Reporting by Justyna Pawlak; additional reporting by Adrian
Croft in London; editing by Rex Merrifield)