Global Policy Forum

By David E. Sanger

Washington - In a rebuff to the Clinton administration five weeks before the election, the European Union said Tuesday it would challenge in a new court of world trade the American law that has imposed sanctions on foreign companies doing business with Cuba. The court was created under the auspices of the World Trade Organization, which seeks to promote fair trading practices among its members.

The action Tuesday came only weeks after President Clinton sent a special envoy, Stuart Eizenstat, on a tour through Latin America and Europe seeking to stop any action against the United States. Eizenstat told the European Union that any effort to take its case to the World Trade Organization would be "ill-advised." But he met intense opposition to the American action from presidents and prime ministers who complained that the United States was using its economic power to extend laws beyond its shores.

Under the law known as the Helms-Burton Act, the State Department has already banned several leading Canadian and British executives from entering the United States because their companies are now operating facilities that were seized from American firms nearly four decades ago, during the revolution that brought Fidel Castro to power. Under pressure from Cuban-Americans in Florida and New Jersey -- key states in the election -- President Clinton also gave American citizens the right to sue those companies in American courts, though he suspended the suits until at least next spring. A similar law, also recently enacted, imposes sanctions on foreign companies that invest more than $40 million in Libya and Iran.

While the Helms-Burton Act and the Iran and Libya sanctions have caused a furor overseas, they have hardly been mentioned in the presidential election. But the European action Tuesday could ignite a related issue: Bob Dole and other Republicans have declared that the United States should not be subject to rulings by foreign judges on the World Trade Organization challenging American laws.

The World Trade Organization does not have the power to overturn an act of Congress. But it could authorize European nations, along with Canada and Mexico, to take counter-action American companies or executives. Even before the case is formally started, several countries are doing just that.

In Mexico City Tuesday the national Congress overwhelmingly approved a Helms-Burton "antidote" law that imposes fines of up to $301,000 on Mexican companies that comply with the American legislation or even provide information to U.S. officials under its terms.

In Washington the acting U.S. trade representative, Charlene Barshefsky, said that the European action would "heighten tensions" between Europe and the United States. No one is expecting a trade war to actually break out over the Cuba sanctions. But the failure of Washington to persuade its allies to put pressure on the Castro government is an example of how alliances have fractured in the post-Cold War world.

"We are asking our allies to see this our way," said Eizenstat, who was ambassador to the European Union until he took a post as undersecretary of commerce for international trade administration. "We have spent 50 years and untold billions of dollars defending freedom and democracy in Europe. We've always been there when the Europeans needed us. It is not asking too much to ask for some help in an area we consider in our national interests."

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