Administration to Seek to Amend Helms-Burton Act

The Clinton administration reached an understanding with the European allies Friday that defuses at least until October an explosive transatlantic dispute over trade with Cuba.

Under the accord, the administration would press Congress in the next six months to water down the Helms-Burton law, which penalizes certain foreign companies investing in Cuba. In return, the European Union would take action against dealings in property confiscated by Havana and other regimes.

The agreement is tentative, requiring a great deal of further negotiation and approval by both U.S. lawmakers and European governments, and some key details have not been spelled out. The authors of the American law, Sen. Jesse Helms (R-N.C.) and Rep. Dan Burton (R-Ind.), said they had not agreed to dilute their anti-Cuban measure and would carefully examine the Europeans’ commitments.

Moreover, hours after the deal was made public Friday afternoon, a controversy erupted over whether the administration agreed as part of it to grant the Europeans a waiver of sanctions aimed at curbing investment in Iran.

But the agreement may provide a framework for healing a serious irritant in U.S.-European relations over whether Washington has the right to use economic leverage to force other countries to accept its policy of isolating Fidel Castro’s government.

It also averts a clash between the two economic superpowers at the World Trade Organization that posed the danger of eroding the WTO’s authority just two years after it was formed to referee global trade disputes.

The action came three days before what U.S. officials described as a “drop-dead date” on Monday, when the Europeans were scheduled to make their first submission to the WTO in a case arguing that Helms-Burton violates global trade rules. The U.S. side was planning to boycott the WTO proceedings on grounds that the WTO is not fit to judge a dispute that is primarily related to foreign policy rather than international business.

That scenario--which would have been acutely embarrassing to the fledgling trade organization--will not materialize Monday because the Europeans agreed to suspend their WTO case until Oct. 15.

The understanding was reached at around midday Friday after 50 hours of negotiation, according to Stuart E. Eizenstat, the undersecretary of commerce who has served as the administration’s point man on Helms-Burton.

“This understanding will help to promote a transition to democracy and the protection of property rights in Cuba and avoids bringing a foreign policy dispute before the WTO in Geneva,” Eizenstat said at a news conference.

But Eizenstat acknowledged that the deal faces major hurdles as negotiations move forward on details. In particular, it is unclear whether the Europeans will sufficiently impress Capitol Hill with the still-unspecified measures they have agreed to take against dealings in property confiscated by the Castro regime and others.

The lure to Congress is the proposed extension of such restrictions beyond Cuba to other countries. If it is not satisfied, Congress may not fulfill the U.S. part of the proposed bargain by taking some of the sting out of Helms-Burton. The law, passed last spring, penalizes foreign companies for “trafficking” in land and factories that the Cuban communists expropriated from U.S. citizens.

Eizenstat said that he had consulted with leading members of Congress, including Helms and Burton, and had won broad support, though he stressed “there is no guarantee” lawmakers will go along with the deal.

Helms emphasized that he “in no way agreed to any dilution of the Helms-Burton law” and will “carefully examine any proposed deal that is reached.”