In its constant search for cheaper and cheaper production bases around the world, there are few places the apparel and textile industry has left untouched. But could Burma - also called Myanmar - be the next frontier?

"We are all searching for the next China," admits Henry Tan, CEO and president of Hong Kong's largest listed garment manufacturer Luen Thai Holdings Ltd.

"There is a lot of talk about Burma," he told delegates at the recent Prime Source Forum in Hong Kong, adding: "In the last ten weeks there has been more talk about Burma than in the last ten years."

And discussions are likely to intensify even further following the decision yesterday (23 April) by the European Union (EU) to suspend most of its sanctions against the country for the next year.

The move is in recognition of the "historic changes" that have taken place over the past 12 months and is also aimed at encouraging the reforms to continue.

But while the EU's decision is likely to open up Burma to renewed scrutiny from fabric and garment firms, industry executives seem to agree it is unlikely to present a major sourcing opportunity in the short term. Indeed, the US continues to impose a total ban on the country's imports.

"The leash holding it back is not only the sanctions, but also the business environment and the infrastructure," says Michael Blakeley, executive director at the Source ASEAN Full Service Alliance (SAFSA), an initiative helping manufacturers in Southeast Asian nations collaborate by creating virtual vertical factories.

Henry Tan, too, believes "it will be a risk to go in. The infrastructure in Burma is a problem; there needs to be investment in infrastructure, ports, power supplies, roads, trucks, banks."

But he concedes that "over the longer term Burma could be big."

Likewise, Blakely adds: "You cannot ignore a country in this region that officially has 60m people, but unofficially some think closer to 80m, and wages of $1 a day.

"For some of the customer members of our organisation, that's got their interest, but they've got to balance that out with all the other challenging things like social compliance, infrastructure etc.

"But Asean investment into Myanmar is happening, and rapidly. The Thai government is encouraging its garment industry to make those investments in Myanmar, and they're encouraging them sooner rather than later.

"So with that increased investment, and foreign investment that hopefully brings with it norms and standards of operating in other regions of the world, there is great potential in Myanmar."

Stampede into an elevator
Others remain to be convinced though. "What I'm seeing is a stampede into an elevator," observes Stephen Forte, managing director of global sales at Coats.

"Moving garment and footwear manufacturing for tariff and duty is a reality, the mathematics are there are there and are policy driven. Moving it for geographic location, to respond to the markets faster, that makes sense too. Packing up and moving it to Myanmar because today it's $1 but tomorrow will be $10, doesn't seem to make sense."

Likewise Mike Flanagan, CEO of industry consultancy Clothesource, wrote on just-style earlier this month: "You would have thought the illegality of exporting anything made in Burma to the US would deter anyone relying on exports from moving garment production there."

Not only is the EU lifting lift trade and economic sanctions against the country, but it is hopeful of reinstating the Generalized System of Preferences (GSP) for Burma "as soon as possible" once the International Labour Organization (ILO) has assessed its labour standards.

And if GSP tariff preferences were reinstated, that would mean products such as clothing made in Burma would be eligible for duty-free access to the EU.

At the moment, though, the EU imposes full import duty on Burmese products, while it offers duty-free access to the world's other 48 poorest countries, such as Cambodia and Laos.

It is also worth remembering that the EU has suspended - rather than ended - sanctions, which suggests they could be reimposed if reforms stall. In particular there are calls to free remaining political prisoners and remove restrictions on those already released, as well as ongoing concerns about human rights abuses.

US unlikely to follow on sanctions
The US - which has imposed a total ban on imports from Burma since 2003 - is moving even more slowly. Earlier this month it said some travel restrictions would be relaxed, and that there would be "a targeted easing of the ban on the export of US financial services and investment.

"Burma, right now, is a very long way from meeting the conditions the US Administration has laid down for trying to persuade Congress to withdraw the sanctions that really affect our industry," Flanagan writes.

"There appears very little likelihood a US president will propose lifting import sanctions against Burma before Burma's full elections in 2015. Even then, I wouldn't put money on Congress agreeing open trade with yet another Asian low wage economy - unless its current anti-trade mood changes radically."

According to information presented at this year's SAFSA Member Conference in Hong Kong, Burma's garment exports have soared 45.5% in the last five years, from US$418m in 2007 to $608.3m in 2011.

The main export markets are Japan (with a 57% share), South Korea (38.2) and Turkey (1.5%). Other destinations include Malaysia, Colombia, South Africa, Australia, Switzerland, Serbia and France.

Wages of US$1.1 per day in Burma compare with $2.48 in Vietnam, $4.99 in Indonesia, $9.84 in Thailand, $7.13 in the Philippines, and $17.62 in Malaysia.