EU Leaders React to U.S. Threat of Sanctions to Limit Trade

Leaders of the 15-nation European Union expressed “deep concern” Saturday over recent U.S. congressional actions that threaten to impose sanctions against foreign companies trading with Cuba, Libya or Iran.

In a communique issued at the end of a two-day summit here, they reserved the right to retaliate against the U.S. to defend their own interests.

That statement could sharpen the atmosphere when President Clinton meets four of his European counterparts face to face at the Group of 7 summit of leading industrial nations this week in Lyons, France.

However, at separate news conferences after the EU summit, two of those European leaders--Italian Prime Minister Romano Prodi and German Chancellor Helmut Kohl--made it clear that they want no blowup in Lyons.

“I see no confrontation coming on this at the G-7,” Kohl declared.

The leaders were reacting in part to the Helms-Burton law passed by Congress and signed by President Clinton in March after Cuba shot down two American light aircraft flown by Cuban exiles, apparently over international waters. That law imposes sanctions on specific foreign companies that continue to trade with Havana.

But Europeans are more concerned about another piece of legislation, unanimously passed by the House last week, that threatens sanctions against certain foreign companies that conduct business with Iran or Libya, countries where Europeans have traditionally been important suppliers of technology and development projects.

The U.S. State Department has listed both countries as sponsors of international terrorism. The House version of the Iran/Libya sanctions bill must be reconciled with one passed by the Senate six months ago before it is sent to the president for his signature.

Germany--a leading advocate of the EU’s policy of trying to moderate the views of militant regimes by engaging them in a so-called critical dialogue--has a thriving trade relationship with Iran.

The EU summit’s host nation, Italy, has companies trading with all three countries.

Prodi on Saturday described the U.S. legislation as “rather strange when measured against the yardstick of international law,” but he avoided tougher language. “We are hoping this law is applied wisely and in a less alarming way than it might seem,” he told reporters.

His comment reflected the fact that both Senate and House versions of the bill limiting trade with Iran and Libya give the president authority to waive the sanctions if he deems it in the national interest.

The European leaders here also seemed eager to avoid a dispute with the U.S. over the fate of Boutros Boutros-Ghali. They would like to see the U.N. secretary-general serve a second five-year term beginning in January, but the Clinton administration has threatened to block this.

French President Jacques Chirac, who will host the G-7 meeting, cut off a reporter asking him about the matter, stating, “Neither the G-7 nor this conference is a United Nations election meeting.”

At a working dinner here Friday night, EU foreign ministers reportedly discussed a compromise: giving Boutros-Ghali a second term but cutting it to one or two years.