The United States will lift sanctions in the wake of Myanmar's return to democracy, US President Barack Obama said Wednesday after a White House meeting with Aung San Suu Kyi, leader of the elected government that took power in March.

Following more than 60 minutes of talks in the Oval Office, Obama told reporters that he was "now prepared to lift sanctions that we have imposed," in response to the "remarkable social and political transformation" in Myanmar.

The White House earlier announced that Obama would restore trade preferences granted to Myanmar as one of the world's poorest countries. The benefits were suspended in 1989 during the country's military regime.

Reopening economic relations is "the right thing to do to ensure that the people of Burma see rewards for a new way of doing business," Obama said.

Suu Kyi thanked the US Congress for helping to pressure Myanmar's past government to restore human rights. She said the time had come for the United States to lift sanctions and urged investors to seek opportunities in Myanmar.

Obama attended the annual summit of leaders from the 10-country Association of South-East Asian Nations (ASEAN) last week in Vientiane, Laos. Myanmar is an ASEAN member.

Suu Kyi, who was awarded the 1991 Nobel Peace Prize for her opposition to Myanmar's long-ruling military junta, is officially state counsellor but de facto leader of the government. Her party won a sweeping victory in November in the country's first free elections in decades.

"When I was first elected [in 2008], Aung Suu was still under house arrest," Obama said.

Myanmar's transition from military rule to democracy began six years ago under former president Thein Sein.

"We have reached a point where, as President Obama said, people didn't expect us to be five years ago," Suu Kyi said.

Obama, seeking to encourage the opening of the country, became the first president to visit Myanmar in November 2012.

"I could see the tremendous potential about to be unleashed," he said, recalling the visit.

The Myanmar government in early September concluded a peace conference with 17 of the country's 21 rebel groups. Numerous ethnic groups fought the military regime for decades and remain suspicious of the central government.

In a joint statement, Suu Kyi said she was hopeful of achieving "a lasting peace with armed ethnic groups."

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