Reuters-WTO sets up dispute panel o (r)

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WTO sets up dispute panel on Mass. law on Myanmar
09:54 a.m. Oct 21, 1998 Eastern

By Stephanie Nebehay

GENEVA (Reuters) - A Massachusetts law targeting foreign companies investing
in Myanmar will be examined by a panel created Wednesday by the World Trade
Organization's dispute settlement body in response to complaints by Japan
and the European Union.

The EU and Japan argue that Massachusetts application of a ``pricing
penalty,'' an effective tax, on goods and services offered to the state by
foreign companies doing business in the junta-ruled former Burma breaks WTO
rules on government procurement.

U.S. Ambassador Rita Hayes, expressed regret the two trading powers had
taken the step at the closed-door talks and cited human rights grounds to
justify the first-in-the-nation law ``The U.S. will defend this measure,''
she told reporters.

``We regretted that the EU and Japan have taken the step of requesting a
panel given the strong interest all three parties have in improving the
human rights situation in Burma. ``The U.S. remains concerned about the
extensive abuses of human rights by the SLORC regime in Burma, which has
been internationally condemned,'' the U.S. trade envoy added.

She was referring to the ruling State Law and Order Restoration Council,
which has ignored the results of a May 1990 general election won by the
opposition National League for Democracy (NLD), which is led by Nobel
laureate Aung Suu Kyi.

The panel was automatically established under rules of the 132-member WTO
because it was a second request to examine the Massachusetts law. Washington
blocked the previous bid on Sept. 22.

The three-member panel will have six months to decide if Massachusett's
action contravenes or is consistent with WTO rules.

Hayes said the European Parliament last month approved a resolution calling
on the European Commission to impose economic sanctions that would end all
trade, tourism and investment in Myanmar. She said the text also criticized
the commission decision to insist on creation of a WTO panel on the U.S.
law. In addition, the International Federation of Chemical, Energy, Mine and
General Workers Unions -- representing more than 20 million workers in the
15 EU member nations -- has called on EU Trade Commissioner Sir Leon Brittan
to sever all trading links with Myanmar until democracy was restored,
according to Hayes.

``It is unfortunate that the EC chose to ignore the requests of the European
Parliament and one of the largest EC workers' unions and have continued to
pursue this dispute to a panel,'' Hayes said.

European Union foreign ministers said earlier this month that they were
weighing tougher measures against the Myanmar leadership in view of a
deteriorating rights situation By Oct. 29, they are due to renew a
two-year-old sanctions policy, which now consists of a ban on visas to the
Burmese leadership and suspension of high-level government visits and an
arms embargo.