U.S. plot to thwart Cuba trade
aggravates partners

May 29, 1996
Web posted at: 11:59 p.m. EDT (0359 GMT)

WASHINGTON (CNN) -- The United States has officially rankled some of its major international trading partners, according to State Department spokesman Nicholas Burns. Three companies in three countries have been notified that if they don't change their trading practices, they may be in violation of the Helms-Burton Law, Burns said.

The Helms-Burton legislation seeks to put economic pressure on Cuba by imposing sanctions against overseas companies that use or profit from property confiscated by the Cuban government after the 1959 revolution.

If companies are deemed to be trading in such properties with Cuba, the United States can keep their stockholders, key executives, and their families from entering the United States.

The companies informed of their potential violation are the Canadian mining and energy firm Sherritt International Corp.; Italian communications firm STET Spa; and Mexican conglomerate Grupo Domos (the Domos Group).

Mexico, one of the world's top three investors in Cuba, is incensed by the U.S. ultimatum. Mexico has interest in everything from Cuban tourist resorts to telephones. Grupo Domos specifically has invested over a billion dollars to redo Cuba's decrepit telephone system.

Mexican business leaders vow to resist the law, which is designed to force companies to choose between doing business with Cuba or the United States, Mexico's largest trading partner.

"For Mexico, with its 3,000-kilometer border with the United States and a free trade agreement (NAFTA), there is no question what the choice would be," said Carlos Abascal of the Mexican Business Confederation. "But there is also no question about Mexico's sovereignty and the right to choose with whom to do business."

Mexico and Washington's other NAFTA partner, Canada, complain bitterly that the United States has no right to apply its laws outside of its own territory. "Everybody in the world is concerned because Cuba today, who tomorrow? It's a very dangerous precedent," Gurria said.

The Mexican government says it is studying every option to defend its companies from U.S. sanctions, including suing the United States through the World Trade Organization. Dutch and British foreign ministers also protested the barely veiled U.S. threat in visits to Washington Wednesday.

British Foreign Secretary Malcolm Rifkind told a National Press Club gathering, "No one country has the right to tell companies in another country how they should behave in third countries."

And Dutch Deputy Prime Minister Hans van Mierlo said the United States "should not underestimate problems that are going to arise in the coming months on this point." The European Union has formed a working group to study appropriate retaliatory action against the United States.

Unfortunately for U.S. trading partners, Washington appears determined to impose its legislation no matter what the international courts and community think.

Mexico City Bureau Chief Lucia Newman and State Department Correspondent Steve Hurst contributed to this report.

Related stories

• Mexico bucks U.S. pressure to drop Cuba trade - May 29, 1996
• Clinton agrees to fresh sanctions on Cuba - February 28, 1996

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