5:53 AM Jun 6, 1996

EU, US "CONSULT" ON HELMS-BURTON LAW

Geneva 4 June (Chakravarthi Raghavan) -- The European Union and the United States held a round of consultations Tuesday on the EU complaint to the World Trade Organization that the US Helms-Burton law on foreign investments and business in Cuba violated the WTO trade rules.

The consultation is a preliminary step to bring the dispute before the Dispute Settlement Body and get a panel to adjudicate the dispute.

EC officials said that the consultations, and the US responses had not satisfied them, but that they expect another round of consultation before they decide to seek a WTO panel.

US President Bill Clinton signed the Helms-Burton bill into law in February.

While a storm of protests over the US efforts to legislate extra-territorially and sanction other countries for their economic relations with Cuba is continuing, Congress is moving towards setting up similar legislation over trade and economic relationships of countries with Iran and Libya. This has aroused even greater concern and anger.

But the EC clearly seems in not too much of a hurry to push the Helms-Burton Law issue to a WTO panel. It appears to be awaiting a decision by President Clinton on whether or not to notify Congress about a waiver -- which the law enables him to do every six months.

The US has already warned companies in Europe, Canada and Mexico that it would take action against them by barring entry into the US of their representatives unless they stopped operations in Cuba involving property claimed by the Cuban nationals in the US who fled that island when Fidel Castro-led revolution against the Batista dictatorship succeeded in the late 1950s.

The entire issue of the US law and moves figured at the recent OECD Ministerial meeting in Paris last month. But the US succeeded in blocking any references in the final communique to this issue.

And at the on-going meeting in Panama City of the Organization of American States, the US has been assailed by the other OAS members who are seeking a legal challenge. A resolution has been adopted at the OAS Assembly by 23 against 1 (US) and ten abstentions.

The US delegate at the OAS has been reported as visibly angry and using some harsh language ("diplomatic cowardice") against the OAS members who sponsored and pushed the resolution through.

Mexico and Canada have challenged the US law within the mechanisms of NAFTA.

At the Mexican initiative, the Rio Group of Latin American countries have set up a machinery to study the legal validity of the US law.