Belarus Risks Becoming only State Stripped of EU Trade Preferences
Published: 14 February 2013
In response to the country's unprecedented reforms, the European Commission has recently proposed to reinstate EU's preferential trade for Myanmar.
When this happens, Belarus will remain the only country deprived of EU trade preferences system because of labour rights violations.
With historical changes taken place in Myanmar for the last two years, Belarus occupies discreditable ratings previously held by the South-East Asian country.
The EU's Generalised System of Preferences (GSP) is a preferential trade regime that provide tariff preferences when selling on the EU market. The GSP scheme can be suspended, however, for serious violations of core human rights or labour rights conventions.
Until 2007, when Belarus made Myanmar a company, this South-East Asian country was the only developing country that the EU stripped of its preferential trade benefits for gross violations of labour rights.
In 1997, the EU punished Myanmar this way for the wide-spread use of forced labour. A decade later, Belarus followed the case for violations of trade union rights. The decision came after nearly three years of monitoring of freedom of associations for workers and the government's reluctance to implement the International Labour Organisation recommendations.
Quarter Billion Dollars of Direst Economic Loss Since 2007
The GSP suspension resulted in an EU tariff increase of up to four per cent on Belarus-made goods and affected around ten per cent of Belarus exports, including the country's lumber, textile, and metal works industries. According to some estimates lost trade revenues reached $300 mln annually. However, more accurate estimations indicate that the GSP suspension inflicted the direct overall annual loss at $40-50 mln.
This makes a quarter billion loss since mid-2007 when the GSP suspension became effective, quite a big money for the Belarus's economy. The indirect damage as missed foreign investment opportunities for the GSP suspension-related country's gloomy image may have been as much.
The government's hopes to reverse the suspension by fulfilling the ILO recommendations fell short, despite numerous trips of the Belarus officials to Geneva and a couple of legal initiatives that the ILO officials found empty gestures.
Minsk occasionally flopped in its attempts to look conscientious about improving the situation even during the ILO's Executive Director Kari Tapiola's visit in 2007. The main state newspaper "Sovetskaya Belarus" then blamed leaders of independent trade unions in "stealing money from Belarusian children with a cheeky grin".
Tapiola had to react asking the Belarus officials not to transfer the responsibility over the GSP suspension onto the trade unions leaders' shoulders.
What's Wrong With Trade Unions in Belarus?
Tough treatment of the trade unions in Belarus finds its traces in the Soviet system when trade union were the 'social pillars' of the state. Currently, they function under the direct control of the presidential administration. Ironically, the head of the pro-government Federation of Trade Unions of Belarus (FTUB) Leonid Kozik was a deputy head of the presidential administration before occupying a seat at the FTUB in 2002.
Independent trade unions face significant legal hurdles in Belarus and little has changes since 2007, despite initial Minsk intention to bring the EU's GSP back. In Belarus, trade union registration is compulsory and registration procedure is burdensome and complicated.
To register a trade union has to provide the official headquarters address. Since the law does not allow register the home address of their leaders as the trade union's legal address and commercial rent is high, the premises of the enterprise left as an option.
However, this makes an association completely dependent on the good will of the employer that, in turn, is subservient to the executive. Besides, the minimum membership requirement levels are too high, especially when seen against the background of dominating fixed-term work contracts that discourage workers from joining independent trade unions.
If a trade union fails to register, its activities are banned and the organisations has to be dissolved. The ILO views the registration process as the most important indicator of Minsk willingness to fulfil the ILO recommendations.
However, no tangible progress was made by Minsk. The restricting legislation remained in place and compulsory dissolution of independent trade unions on the grounds incompatible with the international standards, continued.
Myanmar and Belarus Moving in Opposite Directions
In mid-2012, the ILO recorded a significant progress by Myanmar in eliminating forced labour, although the problem still persists. Quite opposite, Belarus not only failed to change its laws incompatible with core ILO conventions, but additionally aggravated the situation by recently adopted legislation.
Seemingly, official Minsk fully gave up the attempts on bringing the freedom of association closer to international norms. The latest report of the ILO’s Committee on Freedom of Association of November 2012 is deeply concerned by the government’s lack of cooperation and regrets that no progress has been made in improving the situation of trade union rights in the country.
Belarus even stopped sending formal replies to the Committee’s recommendations and to the new allegations of violations of freedom of association.
The decree of December, 2012 on the employment at woodworking companies was labelled by some as a 'return to serfdom'. The law requires all employees to sign fixed-term labour contracts which afterwards shall be prolonged by the maximum possible period.
Employees cannot quit a job without the employer's consent and those fired for performing their duties improperly will have to repay all of their monthly bonuses. Although no formal complaint over the controversial law was yet lodged to the ILO, Kari Tapiola suggested that the decree could run counter to the 1930 Forced Labour Convention that entitles workers to the right to accept and reject a job.
Without necessary political will, Belarus remains far from fulfilling International Labour Organisation nine recommendations of 2004. Moreover, Belarus may soon face a new ILO inquiry. This makes the reinstatement of the EU's trade preferences unfeasible in the near future.
Belarusian Institute for Strategic Studies