Dashing U.S. hopes for a delay, the European Union is forging ahead with a legal challenge to the Helms-Burton Act on Cuba that could poison Washington's relations with its top Western trade partners.
The EU move means that unless there is a compromise, the Geneva-based World Trade Organization will be forced to rule by mid-August on whether the latest U.S. sanctions against Cuba restrict international trade.
A U.S. defeat would not only boost Cuba's international standing but might force Washington to disobey the ruling, weakening an agency that has favored U.S. free-trade policies in almost all its previous rulings.
Washington officials had hoped the 15-member European Union would slow down its WTO challenge after President Clinton signed a second six-month delay of the most troublesome part of Helms-Burton in December.
But they were wrong.
`Wrong assumption'
``If that was the assumption, it was a wrong assumption,'' said a diplomat at EU headquarters in Brussels with firsthand knowledge of U.S.-EU contacts on the issue.
The Helms-Burton section at stake would allow U.S. citizens to file suit in American courts against foreigners who ``traffic'' in properties seized by Cuba's revolutionary government. Virtually every nation has harshly condemned the section, and the EU had filed its challenge with the WTO in November.
U.S. and EU officials met quietly some three weeks ago to discuss the three-member panel that would be appointed by WTO Director Renato Ruggiero, an Italian, to hear and rule on the Helms-Burton dispute, EU officials said.
But the U.S. side rejected all seven names put forward by Ruggiero, arguing that Helms-Burton is not a trade dispute but a foreign policy issue that cannot be judged by the WTO, the officials added.
European envoys then returned to Ruggiero on Monday and requested that he unilaterally appoint a panel, as specified under WTO rules. Ruggiero now has 10 days to name the panel, which will have up to six months to make a ruling.
`Not an act of hostility'
``This is not an act of hostility. It is absolutely stock, normal procedure,'' said Peter Guilford, a spokesman for Sir Leon Brittan, the EU commissioner supervising the Helms-Burton dispute.
``We haven't changed the speed of our complaint or ratcheted up the pressure,'' Guilford said. ``It would be wrong, and a shame, for the United States to read into this any brinkmanship or game of chicken.''
U.S. officials could not be reached for comment on the EU move.
But they have privately acknowledged that the 123-member WTO is likely to rule against Washington. Under the organization's rules, the United States could then reject the ruling on national security grounds.
But that defense would severely undermine the WTO, which has ruled in favor of U.S. trade interests in five of its six rulings involving U.S. claims so far. Another 15 or so U.S. claims await WTO action.
Whatever the outcome, the dispute over Helms-Burton was revived at a time when U.S. and European policies on Cuba appeared to be moving closer after decades of wide divergence.
The EU adopted a ``common policy'' in December linking relations with Havana to Cuba's human rights record, while European nongovernmental groups founded a coalition to press for democratic reforms on the island.
``Our whole policy of improving human rights in Cuba is now in line with American policy,'' said one EU official. ``But now Washington should move its trade policy on Cuba to our side if they want to stay friends.''
Copyright © 1997 The Miami Herald