By Andrew Quinn and Susan Cornwell
WASHINGTON (Reuters) - The United States is looking at easing sanctions on Myanmar, but needs to see more democratic progress including a smooth April by-election before it can start unwinding decades of overlapping economic and political bans on the country, U.S. lawmakers said on Tuesday.
U.S. officials have said they are encouraged by Myanmar's reforms thus far, which have included the release of hundreds of political prisoners and spurred the European Union and Australia to begin easing their own sanctions.
But the U.S. sanctions, launched in 1988 and expanded by five laws and four presidential directives, could prove tough to unravel quickly as the Obama administration monitors whether Myanmar genuinely embraces democracy, promotes civil liberties and ends strife with ethnic groups.
"We're looking at it. We're reviewing right now what's available to the president, what's available to Congress, what makes the most sense," said Democratic Senator John Kerry, who chairs the Senate Foreign Relations Committee.
"I think we have to take some measures in response to what is happening over there. But I don't think anybody's yet decided on exactly what the sequencing is," he said.
U.S. Secretary of State Hillary Clinton this month announced Washington would return an ambassador to Myanmar after an absence of two decades, a significant step in the quickening but still tentative re-engagement with the country formerly known as Burma.
Clinton, who visited Myanmar in December, has promised to match further reform steps with more U.S. gestures, hoping to encourage political change undertaken by the new civilian-led government after decades of military rule.
Those reforms, unveiled rapidly in recent months, have included freeing longtime pro-democracy leader Aung San Suu Kyi, launching peace talks with ethnic rebels, relaxing strict media censorship, lifting bans on trade unions and protests, and pulling back from the powerful economic and political orbit of neighboring China.
But Myanmar's generals still effectively control parliament after a deeply flawed 2010 election and the constitution, written in 2008, guarantees the military's dominant role in politics.
U.S. sanctions on Myanmar include a ban on investment and trade, a freeze on the assets of certain Myanmar officials and a block on U.S. support for loans from international financial institutions.
"There is a whole elaborate maze of sanctions that has been built up, and to dismantle it is going to take some time and effort," said Suzanne DiMaggio, vice president of global policy programs at the Asia Society and a Myanmar expert.
In Congress, leading lawmakers said the United States could begin loosening some sanctions soon - but probably not before the April 1 by-elections in which Suu Kyi is set to run for parliament.
"We could act fairly soon," said Republican Senator John McCain, just back from a trip to Myanmar, adding that both political parties and the Obama administration itself were consulting on the steps forward.
"The president can act on some, Congress has to act on some," McCain told Reuters.
U.S. officials have said they are looking for concrete progress on a number of fronts, including further prisoner releases, sustained peace initiatives with ethnic rebel groups and a halt to Myanmar's military cooperation with North Korea.
Senate Minority Leader Mitch McConnell, a Republican who since 2003 has been a co-sponsor of annual legislation placing sanctions on Myanmar's government, said the April election would be an important test of the durability of reform.
"I recommended to them that they have international observers there. That's not uncommon in countries that are having first-time elections," McConnell, who this month visited the country for the first time, told reporters.
"If that (election) goes well, then we'll continue to take a look at what additional steps they need to take in order to warrant the removal of some or all of the sanctions."
WAIVERS AND OTHER STEPS
Analysts say the United States could take initial steps such as requesting waivers to existing sanctions, including some to permit travel by senior officials to match the move taken this week by the European Union.
Another possible step would be an administration request for a waiver to a law which requires the United States to block any full re-engagement with Myanmar by the World Bank and the International Monetary Fund.
Some sanctions might be amended, but still others would require progress on issues ranging from drug trafficking and money laundering to preventing the use of child soldiers.
DiMaggio of the Asia Society said it would be important for the United States to maintain its flexibility while encouraging further reform, particularly on the economic front.
"What is needed right now are ways and means of responding quickly," DiMaggio said. "There is an urgency because right now a lot of important decisions are being made, a lot of reforms are being implemented, and they need assistance."
(Editing by Mohammad Zargham)