EU says won't be pushed into lifting Myanmar sanctions

Stuart Grudgings, Reuters, 9:32 a.m. EDT, March 30, 2012 ...

PHNOM PENH (Reuters) - Fair elections in Myanmar this weekend will be a major step toward the lifting of European Union sanctions but the bloc will not be rushed by big business into lifting the full range of trade restrictions, its trade commissioner said on Friday.
Whether trade curbs are lifted or not will depend heavily on an international report on forced labor in Myanmar, Karel de Gucht told Reuters in an interview.

The former Belgian foreign minister said the EU would not be forced into lifting sanctions more quickly by investors who want to rush into the rapidly opening economy that has huge potential in energy, financial services, telecoms and tourism.

"You should not overestimate pressure by private companies and certainly you should not overestimate the influence this has on the decision-making of politicians," said De Gucht, who is in Cambodian capital Phnom Penh for a regional summit.

EU diplomats have said pressure is already building for a quick decision, with major corporations lobbying their foreign ministries to make the commercial argument.

The report by the International Labor Organization (ILO) is expected "within months" and is unlikely to be ready in time for a meeting of the EU Foreign Affairs Council on April 23, De Gucht said.

A successful election at the weekend could be a trigger for the European Union and other Western nations to end wide-ranging sanctions on Myanmar that have given Asian businesses a vital head start in tapping the country's dramatic opening.

The council is widely expected to lift some sanctions on Myanmar on April 23 if Sunday's election is judged fair.

Still, any decision to end Myanmar's suspension from the EU's Generalised System of Preferences (GSP) for poorer countries, including tariff-free imports under the "Everything But Arms" initiative, is likely to rest heavily on the ILO report, De Gucht said.

"If that is positive, and by positive I mean that it would state there is an evolution in the right direction ... then the European Commission will very seriously consider granting GSP back to Myanmar," he said.

He declined to say which sanctions the EU council was likely to lift, but said any decision could take effect immediately.

Diplomats say some U.S. restrictions such as visa bans and asset freezes could be lifted quickly if the election is credible, and the EU may end sanctions that ban investment in timber and the mining of gemstones and metals.

The EU is well placed to relax its curbs on investment sooner than Washington, as most of its "restrictive measures", which also include asset freezes, are up for review on April 23.

De Gucht said that Sunday's by-election was only one of the "first steps" for Myanmar to show that it was genuinely moving towards democracy.

"These are only the first steps - it's very important they continue in that direction but also that it also happens in a sustainable way," he said.

(Reporting By Stuart Grudgings; Editing by Daniel Magnowski)

Copyright © 2012, Reuters

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