23rd Oct 2016

Belarus joins Burma as EU trade outcast

Belarus at midnight on Thursday (21 June) became the second ever country to be kicked off the EU's 36-year old "GSP" trade scheme, but some EU states believe the move is ill-judged.

The suspension of Belarus from the 1971 Generalized System of Preferences (GSP) on trade will see extra tariffs of up to 3 percentage points imposed on imports to the EU of products such as forestry and textile goods.

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The move comes after the Geneva-based International Labour Organisation (ILO) said Minsk had fulfilled just four of 12 necessary pro-trade union reforms, with the extra tariffs set to cost the country around €400 million a year.

Asian dictatorship Burma in 1997 was the only other country ever to have faced GSP sanctions, despite the fact that other GSP beneficiaries - such as Uzbekistan - have worse workers' rights records than Belarus.

The GSP suspension is reversible, but it is much harder to get back into the system than to stay in: the months-long process would involve a new ILO report, a new European Commission recommendation and a new EU state decision.

Minsk in a statement said the "short-sighted step taken by the EU towards its immediate neighbour affects in the first place the interests of ordinary Belarusian citizens" and called for the EU to "reverse it immediately."

Belarus has also queried Brussels' claim the decision was a purely "technical" process based on ILO compliance. "It was a political decision - the ILO said we made progress, but this was not taken into account," a diplomat said.

The position has been echoed by Belarus' EU neighbours, Latvia, Poland and Lithuania, who had fought the move at EU-level, saying the Belarusian nomenklatura's income comes from arms and energy sales - not covered by GSP.

An EU official said that close personal ties between senior ILO and EU officials have helped Brussels get the kind of ILO reports it wants, with other issues such as political prisoners also impacting the reading of ILO texts.

"It's well known that if they had released all the political prisoners, things would have been different," the EU contact said.

First millionaire

Ordinary Belarusians live on $170 a month. But Polish daily Dziennik reports the country's tax authorities this week saw an unnamed Belarus citizen post an income of $9 million - the first official millionaire in the country's history.

The US state department believes that president Aleksander Lukashenko has skimmed off a personal fortune of over $1 billion, part of which had been stashed in Serbia but is now kept in unknown locations.

Another Polish paper, Rzeczpospolita, writes that senior Belarus official Viktor Sheiman could be posted to Venezuela in order to transfer Lukashenko's fortune to Caracas, should the Belarusian president one day seek asylum.

"Our number one interest in Venezuela is in the energy sector," the Belarusian diplomat said, calling the Rzeczpospolita article "fantastic speculation."

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