Burma in the dock at EU hearings

Date: 03/10/1996

By Elizabeth Wiseand Ole Ryborg

THE EU is now actively considering a move which could make trade history and throw it into conflict with its Asian partners.

The European Commission this week began an investigation into labour conditions in Burma which could result, for the first time ever, in the Union revoking privileges it has given to a trading partner.

Acting on a complaint lodged last year by the International Confederation of Free Trade Unions (ICFTU), the Commission held three days of closed-door hearings this week, taking testimony from some 40 representatives of non-governmental organisations (NGOs) on alleged forced labour practices in Burma.

If the Commission deems that the Burmese government or its military are forcing civilians, prisoners and children to work, it may recommend to EU governments that they remove Burma from the list of countries on the Union's Generalised System of Preferences (GSP), a set of tariff preferences for developing countries designed to encourage them to manufacture and export.

Rangoon's arrest of some 500 democracy activists in the past week has strengthened the Union's resolve to act. Member states which pre-viously opposed such EU sanctions are now supporting the move.

The financial and economic repercussions of removing Burma from the GSP list would be minimal - it exported some 66-million-ecu worth of goods to the Union in 1995, with the GSP providing a 2&percent; to 5&percent; discount on the import tariffs. Officials estimate that the end of GSP would cost the country 5 to 10 million ecu.

The political ramifications could, however, be much greater.

By removing GSP benefits from Burma in protest at labour conditions, the Union would be linking its trading policy to social standards.

That is precisely the issue that is wreaking havoc in EU-Asia relations as the two trading regions argue over whether the link should be formally recognised in World Trade Organisation (WTO) rules.

While some argue that the Union would not be imposing sanctions on Burma, but only repealing a special privilege it once gave Rangoon, speculation that the EU will introduce its own “social clause” before WTO members can debate the issue is so rife that the Union will probably try to avoid any such step before the WTO ministerial meeting in Singapore in December. Not only do Asian trading partners fiercely object to such a social clause, but some EU governments oppose the idea as well.

The Commission has until the end of January 1997 to draw up its recommendation. If it calls for an end to Burma's GSP status, it will then be up to EU governments to take a final decision on whether to revoke it.

Commission officials say they may hold a second round of hearings, and perhaps even conduct a fact-finding mission in Burma, before coming forward with a proposal.

But NGO witnesses who testified at this week's hearings said that Commission officials appeared to believe that Rangoon was guilty of using forced labour for infrastructure projects, and that they only sought details to strengthen their case for action.

EU officials admit it is already too late to stop the process of punishing Burma for its labour abuses.

“By starting the hearings you have in reality started an irreversible process,” said one. “If, after the hearings, the EU says the evidence is not sufficient, it would amount to recognising that the Burmese military regime does nothing wrong by using forced labour.”

The rolling snowball may soon gather even more impetus.

The option of imposing sanctions under the GSP regime has only been available to the EU for the past year and the Burmese case, triggered by the ICFTU, is the first test for the new rules.

If the trade unions succeed with this case, they may try to repeat the process for China, which is also on the GSP list.

Levying sanctions against China would be a highly controversial move - much more difficult both politically and economically than taking action against Burma.