BELARUS NOT DOING WHAT IS NEEDED TO PREVENT GSP

C O N F I D E N T I A L SECTION 01 OF 03 MINSK 001188

SIPDIS

SIPDIS
DEPT FOR DRL/IL BOB HAGEN

E.O. 12958: DECL: 11/13/2016
TAGS: ELAB PGOV ECON PREL PHUM BO
SUBJECT: BELARUS NOT DOING WHAT IS NEEDED TO PREVENT GSP
SUSPENSION

REF: A. 05 MINSK 1074

B. MINSK 1019

Classified By: Ambassador Karen Stewart for reason 1.4 (d).

Summary
--------------


1. (C) On October 12, the European Commission (EC) postponed
its decision to suspend the General System of Preferences
(GSP) for Belarus, giving Belarus more time to implement the
International Labor Organization's (ILO) 12 recommendations
to improve labor rights (ref A). According to some
estimates, suspension of the GSP would cost Belarus
approximately USD 500 million per year in trade revenue. The
GOB sent a high-level delegation to the ILO headquarters in
Geneva to demonstrate Belarus' commitment to improving labor
rights, but according to local ILO representatives, the
delegation's weak arguments only showed the GOB's lack of
commitment to meet the recommendations. Trade union
activists also view Lukashenko's decree to ease registration
requirements and his concept for a new trade union law as
empty promises designed to stall the GSP decision rather than
to fulfill the ILO recommendations. However, the reasons
behind the postponement most likely lie within the
bureaucracy of the EC. End summary.

EC Postpones GSP Decision, Gives GOB "One Last Chance"
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2. (SBU) On October 12, the European Commission (EC)
postponed its decision to exclude Belarus from the EU's
General System of Preferences (GSP) until after the
International Labor Organization (ILO) in Geneva reviewed the
labor rights situation in Belarus, which is scheduled for
November 15-17. According to the EC, the official reason for
postponing the GSP vote was to give Belarus "ample time to
reach a compromise with the ILO." However, according to ILO
sources, the true reason for the postponement was internal
disputes between EU countries over previous trade issues (see
para 9). When the EC first began proceedings to exclude
Belarus from the GSP in 2005, GOB officials shrugged off the
threats, claiming the loss would not affect the economy.
However, as the EC vote approached, Belarus' lobbying efforts
to stave off the GSP suspension increased.


3. (C) Economists and trade union leaders estimate that the
GSP suspension would cost Belarus approximately USD 500
million a year in trade revenue, significantly impacting the
country's lumber, textile, and metal works industries.
However, independent trade union activists, political
analysts, and government economists during an October 27
breakfast with Pol/Econ Chief and Poloffs noted that the GOB
was more concerned with the political fallout following the
GSP suspension. According to the participants, the GOB fears
that once GSP is lifted, some EU member states may be
motivated to implement bilateral economic sanctions against
Belarus. Given increasing economic pressure from Russia (ref
B),Belarus is deeply concerned about economic isolation from
the EU.

GOB Delegation Delivers Weak Arguments to the ILO
-------------- --------------


4. (C) On October 19, a high-level Belarusian delegation
headed by deputy PM Andrey Kobyakov and Deputy Head of the
Presidential Administration Nataliya Petkevich arrived in
Geneva to convince the ILO that Belarus was implementing the
ILO's 12 recommendations to improve labor rights. The
delegation included deputy minister of labor Elena Kolos,
economic advisor for the Council of Ministers Aleksandr
Rumak, deputy director of the Minsk Automobile Plant (MAZ)
Edvard Podolyak, and Minister of Justice Viktor Golovanov.
(Note: Golovanov and Petkevich are both on the U.S. and EU
visa bans. End note.)


5. (C) The outcome of the Belarusian delegation trip was not
mentioned in the state media nor would GOB officials comment
on the issues discussed. Moscow-based ILO representative
Sten Petersen (strictly protect) October 27 told Poloffs that
the Belarusian delegation made several pleas to the ILO to
not support the EC suspension of the GSP, but offered no
compromise in return. According to Petersen's sources, the
Belarusian arguments were weak, unsubstantiated, and at times
completely false.

MINSK 00001188 002 OF 003



GOB Makes Empty Promises?
--------------


6. (C) On October 9, Lukashenko signed a decree that softened
registration procedures for trade unions and agreed to a
"concept" of a draft law that would allow unions to exist
without a legal address and enter into collective agreements
with employers and authorities. Petersen criticized the
decree and concept as empty gestures, noting the difficulties
independent trade unions still face in registering local
chapters and the secrecy of the concept of a draft law, which
was not even in the form of a bill. According to Petersen's
sources in Geneva, the GOB delegation presented these two
developments to the ILO as proof that Belarus was fulfilling
ILO recommendations. However, the ILO discovered that
several points even within the concept actually violated ILO
standards.


7. (C) The delegation also indicated that the GOB wouLd
reinstate union activist Oleg Dolbik, an air traffic
controller and union leader fired in 2004 after testifying
before the 2004 ILO commission about labor rights abuses in
Belarus. Petersen admitted that offering Dmlbik his job back
would be a step in the right direction, but not enough to
justifiably prevent the suspension of GSP. A bolder move, inQPetersen's opinion, would be to offer all union and political
activists their jobs back. (Note: In a separate meeting with
Poloff on October 31, ILO-Belarus representative Nataliya
Varishagina confirmed that the GOB approached Dolbik, but the
Belarusian mfficials suggested to Dolbik that he would have
to meet "certain conditions" (i.e., abandon his union
activity) before getting his job back. To date, Dolbik is
qtill working as a chauffer. End note.)

ILO Does Not Buy GOB Story
--------------


8. (C) According to Petersen, the ILO is all too familiar
with Belarus' tactics to believe that the GOB is implementing
the recommendations. Lukashenko has had almost two years to
improve labor rights and has made little progress. Petersen
expressed relief that Belarus finally sent a delegation of
real decision makers from Lukashenko's close circle and not
powerless bureaucrats. However, Petersen reiterated that the
delegation's weak arguments proved Belarus was not generally
interested in improving the labor situation. Local ILO
representative Varishagina in a separate meeting agreed,
noting that during the delegation visit to Geneva, the GOB
continued to deny registration to union chapters in Borisov,
Bobruisk, and the Minsk MAZ factory.

Will the EC Act?
--------------


9. (C) The October 12 postponement on the GSP vote was the
EC's second failure to make a decision on Belarus. In
September, the EC was certain a decision for the suspension
would be reached, although there existed opposition from
Belarus' neighboring countries. However, Italy, angered by
non-related EC decisions on the shoe trade, voted against the
suspension of GSP in retaliation. After the October 12
postponement, reliable Embassy sources characterized the move
as a "face-saving" measure for the EC, which feared it did
not have enough votes for the suspension.


10. (C) The big talk and no action on the part of the EC
exacerbated doubts by many on Minsk that the EC would suspend
the GSP. During the breakfast, political analyst Valeriy
Karbolevich said economics were the only lever of pressure in
the EC's arsenal, so the EC was still debating whether to use
it. Petersen agreed that the GSP was the EC's only weapon
and that its delay in phe vote made the EC look weak.
However, he noted that Germany's latest decision to support
the GSP suspension (Germany abstained from the September
vote) and the unlikelihood that Italy would repeat its
September decision would give the EC enough votes to suspend
the GSP.

Comment
--------------


11. (C) Not all independent trade union activists support the
suspension of the GSP for Belarus, fearing that ordinary
Belarusians would suffer the most. However, many union

MINSK 00001188 003 OF 003


activists agree that the GOB has no intentions of improving
labor rights. In recent meetings with local union leaders,
Poloffs have heard that authorities continue to fire union
and political activists, deny them full wages and benefits,
and/or prevent them from carrying out their activities.


12. (C) The ILO is well-informed of the situation on the
ground; enough so to separate the truth from the lies in GOB
arguments. The high-level delegation to Geneva, the decree
to ease trade union registration, and the "concept" on union
rights are seen largely as last-ditch efforts to prevent or
postpone the EC's decision and not a genuine effort to
improve labor rights in Belarus. However, the EC's
hesitation to suspend the GSP in the first vote has likely
given the GOB confidence that European internal disagreements
will continue to stall adverse action.
Stewart