Belarus has fallen off the radards somewhat, following Lukashenka’s victory in this spring’s Presidential elections and subsequent European Union’s ban on travels of senior Belarusian officials and freeze on their assets within its borders. But, it seems, the EU is not yet finished, annoucing this week that
Belarus is on the way to joining Burma as the second country in history to get kicked out of the EU’s Generalised System of Preferences (GSP) on trade, with the European Commission dropping hints it will recommend the move to member states in June or July.
The reason?
The decision hinges on Belarus violating ILO rules on workers’ rights such as freedom of association, with an ILO report on 12 June and an International Confederation of Trade Unions’ report in May stating things “changed for the worse” in the past year despite an ongoing EU probe.
The impact?
The suspension would see higher EU import tariffs on Belarusian minerals, textiles, clothes and wood products worth €390 million a year. But it would not cover EU imports of petrol and gas worth almost €1.9 billion a year. The EU was Belarus’ second largest export destination after Russia last year, buying €3.3 billion a year of goods and providing 37 percent of Minsk’s foreign income. It is set to become the largest destination this year.
And consider what happens if Russia acts on its threat to increase prices on natural gas, sold to Belarus at way-below-the-market prices for years,
The €390 million GSP blow is threatening to hit Minsk at a time when Russian supplier Gazprom is calling to quadruple gas prices from $47 per thousand cubic metres to $200 from January 2007 onward. The move would “tear a hole of around $2 billion [€1.6 billion] in the Belarusian budget,” Russian agency Ria Novosti reports.
Earlier news suggest that trade unions have played their part in pushing for the GSP expulsion of Belarus.
On the one hand, having access to the benefits of free trade is a powerful incentive for countries to liberalize – and some believe that using the “free trade” card to demand changes in political and economic environment of a particular country is an option worth pursuing. On the other hand, limiting access to trade only worsens economic conditions in a country – and there are others who believe that actions such as trade barriers/economic sanctions only hurt the citizens -often already living in poor conditions – and hardly ever have an impact on the leaders of countries, who are ultimately the target of those very actions.
I know where I stand in this debate. Do you? Comments welcome…
Published Date: June 16, 2006