NEWS - EU, Japan to Seek WTO Panel

[TheTruth@xxxxxxxxxxxxx]

EU, Japan to Seek WTO Panel Over Massachusetts Law

            Reuters
            09-SEP-98

            BRUSSELS, Belgium (Reuters)- The European Union and Japan
plan
            to ask the World Trade Organization to investigate a
Massachusetts
            law limiting business with Myanmar, a European Commission
source
            said Wednesday. 

            Massachusetts officials have said the law, which took effect
at the
            beginning of 1997, is aimed at discouraging American and
foreign
            firms from exploiting "slave labor" in Myanmar, formerly
called Burma. 

            The source said the EU and Japan would ask the WTO Dispute
            Settlement Body at a Sept. 22 meeting to set up a panel to
see
            whether the state law broke global trading rules. 

            The 15-nation EU strongly objects to the Massachusetts law,
which
            sets a pricing penalty on purchases of goods by state
authorities from
            companies that do business with Myanmar and its military
            government. 

            The EU, supported by Japan, argues the measure violates WTO
rules
            and the 1994 Government Procurement Agreement, part of the
global
            trade treaty that set up the WTO. It accuses the United
States of
            breaking its international commitments under these
agreements. 

            The source stressed the EU's move had nothing to do with the
            economic bloc's policy toward Myanmar. The union has said in
the
            past it shared U.S. concerns over human rights in the
Southeast Asian
            nation. 

            "This is not a question of policy towards Burma. It could be
any
            country. It's a question of the U.S. failing to meet its
international
            obligations in terms of the WTO," he said. 

            The decision to seek a dispute panel comes after the EU and
Japan
            filed complaints with the WTO last year over the
Massachusetts law
            and held consultations with the United States, the first
step in the
            WTO's disputes procedure. 

            Three rounds of talks failed to produce a solution. 

            A U.S. diplomatic source in Brussels said Washington had
been
            encouraging Massachusetts to reconsider its position and
called the
            EU decision to seek a panel "regrettable." 

            Both the EU and the United States had a strong interest in
improving
            the situation in Myanmar, the source said, adding: "I don't
believe that
            taking this to the WTO is going to help us do that." 

            The United States, which already maintains strict sanctions
on
            Myanmar, said Tuesday it was seeking ways to increase
pressure on
            the country following the arrest of the opposition
activists. 

            EU officials see the Massachusetts law as part of a trend by
U.S.
            federal, state and local governments to impose their
political goals on
            non-U.S. companies. 

            The EU and the United States reached agreement in principle
in May
            to end a long, bitter dispute over two U.S. sanctions laws
that the EU
            also saw as "extraterritorial" in scope. 

            They were the Helms-Burton Act, aiming to curb foreign
investment in
            Cuba, and the Iran-Libya Sanctions Act, discouraging
investment in
            those countries' energy sectors. 

            The EU and Washington also agreed last May to launch a new
            initiative, the Trans-Atlantic Economic Partnership, to
strengthen trade
            and remove technical trade barriers at the root of many a
trade
            disputes in recent years.