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EU "Might Seek" WTO Over U.S.-Burma

By Robert Evans 

GENEVA, Dec 17 (Reuters) - European Union officials said on Wednesday they
would be considering in the coming weeks whether to ask the World Trade
Organisation (WTO) to set up a dispute panel to look into a Massachusetts law
on business with Burma. 

The officials, who asked not to be named, were speaking after a third and
final round of talks with U.S. officials on the issue under the WTO's dispute
settlement procedure. 

The officials said there had been ``no progress on substance'' in the
discussions. Asked if the EU would now seek a panel, one replied: ``That is a
question we will have to ask ourselves in the next few weeks.'' 

The Massachusetts law sets a pricing penalty on state procurements -- or
purchases of goods and equipment by state authorities -- from companies that
do business with Burma and its military government. 

Purpose of the law, one of several against Burma and other countries viewed as
violating human rights being passed by state and city legislatures across the
United States, is to discourage U.S. and foreign firms from exploiting ``slave

The EU, supported by Japan, argues that the measure violates WTO rules and the
1994 Government Procurement Agreement, part of the global trade treaty that
set up the WTO. 

All three powers were signatories to the agreement, which bars discrimination
on political grounds in assigning official contracts. 

The EU says it shares U.S. concerns about the human rights situation in Burma,
and has itself withdrawn the special trading preferences it grants to
developing nations. 

One EU official said there had been no indication at the Wednesday talks of
how the U.S. administration was seeking to influence the Massachusetts
government to ensure the law did not violate WTO rules. 

U.S. officials had also provided no time frame for a solution, the official

The next meeting of the WTO's Dispute Settlement Body is set for late January,
and Brussels would have to give 10 days notice if it wanted to put the issue
on the agenda. 

U.S. Trade Representative Charlene Barshefsky has strongly criticised the EU
decision to start up the WTO dispute process, saying this was ``a counter-
productive step'' while efforts were under way to solve the problem. 

But the EU argues that the growing ``sanctions'' movement in the United States
has to be challenged when states and cities championing it take measures that
in effect extend their legislative reach to foreign firms. 

Brussels and Washington have been discussing for over a year the so-called
Helms-Burton law passed by the U.S. Congress in 1996 aimed at preventing most
investment in Cuba, and the EU has suspended WTO action while a solution is

However, that dispute has been aggravated by new legislation aimed at
penalising foreigners who invest in the oil industries in Libya and Iraq --
viewed by Washington as terrorist states. REUTERS