BELARUS NEWS AND ANALYSIS

DATE:

21/12/2006

EU to pull Belarus trade preferences

By AOIFE WHITE

BRUSSELS, Belgium

The European Union voted Thursday to withdraw trade preferences from Belarus unless it tackles what the bloc called serious violations of basic labor rights.

Scrapping the EU trade breaks would mean higher tariffs for the 12 percent of Belarus exports to the EU that currently have preferential rates.

"Where countries systematically flout core labor standards, we need to be prepared to act," EU trade commissioner Peter Mandelson said after EU nations voted in favor of sanctions.

The EU has largely cut contacts with the government of Belarus, imposing financial sanctions and a travel ban on President Alexander Lukashenko and other leaders it accuses of rigging elections and cracking down on opponents.

The EU's executive first suggested withdrawing trade preferences in 2003 when it found that the former Soviet republic was denying workers their right to join unions and to make collective deals with employers.

In 2004, an investigation by the International Labor Organization found that Belarus was not obeying ILO agreements it had signed.

"At the current time, Belarus has not made the requisite commitments to remedying this problem," the European Commission said.

"The regulation withdrawing trade preferences will come into force six months after its adoption unless the situation in Belarus changes significantly before then."

The International Trade Union Confederation applauded the EU's move to support workers' rights.

"This is a welcome decision from the EU and can only help bring the Lukashenko regime to realize that its repression of democratic and independent trade union has to stop," said ITUC General Secretary Guy Ryder.

Last month, the EU said it would broadcast a message to the people of Belarus holding out the prospect of increased trade, job opportunities, easier travel to the West, and EU aid to hospitals, schools, energy networks and the environment.

To gain the benefits of closer contact with the EU, Belarus would have to allow free elections and meet standards of free speech, human rights, independent media and judiciary, the EU said.

Trade between Belarus and the EU stands at only about 0.1 percent of total EU trade flows. But some euro4.99 billion (US$6 billion) of Belarus' total external trade of euro13.85 billion (US$16.7 billion) in 2004 was with the European Union, according to EU figures.

Top exports to the EU included mineral oils, lubricants and related materials, while top EU exports to Belarus were machinery and automotive products.

Belarus, however, is the main land transit route from EU countries to Moscow. Russian oil and gas pipelines to western Europe pass through the country, including part of the world's longest oil pipeline, which transports oil from central Russia to Germany.

Source:

http://www.businessweek.com/ap/financialnews/D8M5BABG5.htm