The default offset for external labels in GMF is 20pt which is a bit too far away for my taste. Also, it is hard-coded in the templates which means that it can only be changed by modifying the generated code directly - or modifying the templates. If you want to do the latter you need to:
close Eclipse
open the org.eclipse.gmf.codegen_xxx.jar plugin using a zip program (I use winrar)
extract the template located in templates\impl\diagram\editparts\NodeEditPart.xpt
open it with a text editor and go to line 347
replace new org.eclipse.draw2d.geometry.Dimension(-20, -20) with the settings of your preference (I've changed it to -5, -5)
put the template back in the jar
start Eclipse (the -clean switch may help)
(This works with the GMF version that ships with the Ganymede modeling distribution)
