(Reuters) – The European Union is considering trade sanctions on Myanmar over the Rohingya crisis, potentially stripping the country of tariff-free access to the world’s largest trading bloc, three EU officials said.
The sanctions, under discussion at the European Commission, would include Myanmar’s lucrative textile industry and potentially put at risk thousands of jobs there but would not come into effect immediately, giving the EU leverage to stop what the West says is ethnic cleansing of Muslim Rohingya.
Even by triggering a six-month review process on whether to impose trade sanctions, which could be reversed if Myanmar met humanitarian and democratic targets, the bloc would mark a significant shift in policy.
The impetus for the move was a U.N. report in August, which accused Myanmar’s military of carrying out killings of Rohingya with “genocidal intent”. That, and the rare U.S. step of putting sanctions on two entire military units, have put an onus on the European Union to act, officials said.
“We are concerned about the impact on the population from our potential measures, but we cannot ignore a U.N. report describing the military campaign as genocide,” said one EU official of the debate within the European Commission, the EU executive responsible for the bloc’s trade policy.
Until now, the EU has imposed travel bans and asset freezes on several members of the Myanmar military, but has shied away from slapping sanctions on Myanmar’s commander-in-chief, Senior General Min Aung Hlaing, who the United Nations said should be prosecuted along with five others for genocide and crimes against humanity.
Myanmar has rejected the U.N. findings as “one-sided”. It says military action which followed militant attacks on security forces in August last year was a legitimate counterinsurgency operation.
Myanmar government spokesman Zaw Htay did not answer telephone calls seeking comment on the possible EU move on Wednesday. He said last month he would no longer speak to the media over the phone, only at a biweekly conference.
EU officials believe the formal threat of losing tariff-free access would quickly hit foreign investment in the apparel industry, where European manufacturers take advantage of relatively low labor costs in Myanmar.
“Removing this duty-free access is a measure of last resort, but we must act if other measures are not delivering,” said one EU official involved in the discussions.“In light of the deteriorating situation on the ground, the Commission is currently assessing possible ways of escalating its political and economic response,” a Commission source said.
European firms sourcing apparel from Myanmar include retailers Adidas, C&A, H&M, Inditex, Next and Primark.
Rights groups say the targeted EU sanctions so far have not forced the military or civilian leader Aung San Suu Kyi to protect civilians, resettle refugees or stop attacks on press freedoms that have included the imprisonment of two Reuters reporters for breaching a law on state secrets.
The European Parliament last month called for the Commission to review Myanmar’s trade preferences.
Within the Commission there are differences, with the EU Trade Chief Cecilia Malmstrom leaning toward starting the process of imposing trade sanctions while