BELARUS NEWS AND ANALYSIS

DATE:

20/06/2007

Belarus: No More EU Trade Preferences

By Luke Allnutt

June 20, 2007 (RFE/RL) -- A recent EU decision to end trade preferences for Belarus is about to go into effect.

The Generalized System of Preferences (GSP) benefits will be suspended on June 21 as punishment for the Belarusian government's failure to implement the International Labor Organization's (ILO) recommendations regarding the country's trade unions.

The Geneva-based ILO has said that in Belarus union bank accounts have been frozen, union activists fired from their jobs, and there have been limitations on the right to strike.

Those charges led the European Union to announce on June 15 that Belarus would be removed from the GSP. The "preferences" are intended to benefit developing countries by lowering tariffs.

'Not Isolation'

Stephen Adams, a press officer for the EU's Trade Commissioner Peter Mandelson, says that the EU's intention isn't to isolate Belarus.

"The intention is simply to apply a little bit of pressure in a way that encourages Belarus to ensure that workers in that country are granted the labor rights, the rights to freedom of association that they're entitled to under Belarus's own ILO commitments," Adams says.

But the Belarusian Foreign Ministry has said the measures will hurt ordinary Belarusians.

The government-funded Federation of Trade Unions of Belarus (FPB) said in a May statement that the European Union's "sanctions" would "result, first of all, in workers' decrease in incomes, reduction of social guarantees, [and] loss of jobs."

'Double Standards'

Mikalay Belanouski, the head of the Minsk branch of the Federation of Trade Unions of Belarus, accuses the EU of double standards.

"There are many countries in the world where the rights of workers and trade unions are simply nonexistent. But nobody takes such measures against them today," Belanouski says.

The EU has placed travel bans on senior officials, like President Lukashenka (RFE/RL) The EU says it has given Belarus plenty of chances.

Press officer Adams says that the EU has had 4 1/2 years of dialogue with Belarus on this issue and in December 2006 gave Belarus a six-month grace period -- the last chance to make good on its ILO commitments.

In the past, the EU has accused the Belarusian regime of rigging elections and clamping down on the political opposition. It has hit Minsk with financial sanctions and placed a travel ban on senior Belarusian officials.

EU-Belarus Business

Belarus does a significant amount of business with the European Union, its second-largest trade partner. According to EU figures for 2004, Belarus did $7 billion worth of export trade with the EU -- out of a total of $16.7 billion.

Only 12 percent of Belarus's products exported to the EU benefit from the preferential tariffs.

Among the exports to be affected would be farm machinery and chemicals, but not oil and gas from Russia that travels to Europe via Belarus.

The head of the Belarusian Congress of Democratic Labor Unions, Alyaksandr Yarashuk, told AP that the country could lose between $270 million to $540 million a year.

But an economist at the Vilnius-based independent Belarusian Institute for Strategic Studies, Kiryl Haiduk, says that figure is likely to be much smaller.

In fact, he says, the impact on the Belarusian economy will be "very small."

"The most pessimistic estimate of losses is from $52.2-$66.6 million per year and the optimistic, and I would say more realistic, estimates range from $23-$36 million per year," Haiduk says.

Haiduk says that, even with the withdrawal of preferences, Belarus's exports to the EU are concentrated in sectors that have relatively low tariffs anyway.

Whatever the impact, the EU has made clear that it is prepared to reinstate the preferences in the future.

"If the ILO was to rule, to demonstrate to the European Union that Belarus had brought its practice in line with its ILO obligations, [then] the trade preferences could be reinstated very very quickly," Adams says.

(RFE/RL's Belarus Service contributed to this report)

Source:

http://www.rferl.org/featuresarticle/2007/06/0c75b987-c1e6-40c4-899b-7ba510d389ba.html