BRUSSELS, Dec 18 (Reuter) - The European Commission called on Wednesday for special trade benefits for Burma to be scrapped following an investigation into the use of forced labour by the military regime in Rangoon.

The decision is a blow to Rangoon's pride, but will have little effect on its wallet. Burmese industrial exports to European Union countries totalled just $30 million in 1995, and special low tariffs saved it no more than $365,000, the Commission estimates.

"It is symbolic," said one Commission official. "But the symbolism is vitally important to SLORC."

SLORC, the State Law and Order Restoration Council which governs Burma, came under fire again earlier this week when the EU issued a statement condeming police brutality while dispersing recent student demonstrations in Rangoon.

The symbolism may be important in an international context, too, as this was the first case to draw a direct link between trade and abuse of basic workers' rights, an issue which greatly excercised a meeting of world trade ministers last week.

Developing countries are concerned that linking the two issues will open a back door for protectionists wanting to keep products made by low-paid workers out of their home markets.

Under European law, however, trade benefits which are unilaterally granted to developing countries to encourage economic growth can be suspended if beneficiaries are shown to force people to work against their will or without pay.

The Commission's recommendation will likely be approved by EU finance ministers in January.

"Benefits will not be reinstated until SLORC can prove to us that there is no more forced labour in Burma," said a Commission spokesman. "The onus is very much on them. And frankly for the paltry sums involved, we don't expect them to be making the effort any time soon."

SLORC refused to allow Commission officials to visit Burma, saying that there was nothing to investigate.

So investigators instead spent a year poring through thousands of pages of presonal accounts and hearing testimony from people who say they have been made to work as virtual slaves, often on infrastructure and hotel projects which SLORC hopes will bring in much-needed foreign exchange.

According to the International Confederation of Free Trade Unions (ICFTU), which launched the complaint, 800,000 Burmese are forced to work without pay or against their will, contributing around a tenth of the country's economic output.

The ICFTU has more bad news for Burma. The current rules apply only to industrial production. But as of January 1, 1997, preferential tariffs on agricultural imports can also be suspended if workers' rights are abused, as long as an independent body lodges a complaint.

"We have a complaint ready to deliver to the Commission on January 2," said Janek Kuczkiewicz of the ICFTU. Wiping out special tariffs on agricultural products would hit another $19 million worth of important rural exports to the EU such as shrimps and rice.

(c) Reuters Limited 1996

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