8:40 AM Mar 19, 1996

US ANTI-CUBA LAW ASSAILED AT WTO

Geneva 19 Mar (Chakravarthi Raghavan) -- The latest anti-Cuba trade and economic sanctions law in the United States, the Helms-Burton law, came under sharp criticism at the World Trade Organization Tuesday during the meeting of the WTO's Trade in Goods Council.

The issue came up under 'any other business' -- a format enabling countries to make their views known, but without any decisions required.

Two other questions that figured were Brazil's announcement of its intention to seek waives from the WTO over its automobile sector restrictions put in place last December, and the US restrictions to be effective 1 May of imports of wild harvested shrimps.

In raising the Helms-Burton legislation signed into law last week by President Clinton, and in reserving Cuba's rights, the Cuban Ambassador, Mr. Eumelio Cabellero Rodriguez, said that the latest US law violated the MFN provisions of the WTO/GATT, breached Art. XI of GATT on quantitative restrictions, Part IV of the GATT, the GATS, and in particular the financial services accord, and generally violated the rules, principles and objectives of the international trading system.

A number of countries took the floor to share the concerns and criticise the US actions.

Mexico said the new law was extremely complicated and it had not yet been possible to study its full implications. But Mexico had sought consultations with the US in terms of the NAFTA.

Canada while condemning the Cuban shooting down of the US 'civil aircrafts', nevertheless felt that the US response was not an appropriate one and that the legislation seemed aimed to "chill" foreign investments and might also affect trade. Like Mexico, Canada too had sought consultations within the NAFTA and hoped the US would fully respect its international obligations.

Chile saw the US action as violating the UN charter and the WTO.

The European Communities said that it had conveyed its concerns to the US administration before the legislation was signed into law. The EU was concerned over the extra-territorial implications and it was particularly unacceptable to the EU that a third country is to direct the EU's foreign trade. The EU was monitoring how the provisions of the law would be applied.

Nicaragua was also concerned over its extra-territorial application, while India, in sharing concerns of others, stressed its consistent opposition to unilateral trade sanctions and felt the US actions would adversely affect rights of other WTO members. India urged the US to reconsider its action and withdraw the measures.

The US, in reply, insisted that the US law was a proper response to the shooting down of its civil aircraft by Cuba. On the investment front, in the US view, persons knowingly and intentionally doing business in Cuba, and using confiscated property, were supporting wrongs committed against former owners of such property and the actions were not in the interests of the US. The administration was still working on mechanisms and guidelines for implementing these measures.

A careful reading of the legislation, the US said, would show that the law introduced no measures in the area of trade in goods of a type which "would" appropriately be taken up by the Goods Council. The remarks of some delegations appeared to be based on an earlier version of the bill, the US representative said. This was presumed to be in reference to the deletion from the final version of a provision under which any produce with Cuban sugar content was barred into the US market.

On Brazil's move to seek a waiver -- indicated to the WTO in December, but on which the Brazilian delegation told the Council it was in the process of circulating a document and request -- Japan expressed its serious concerns. This concern was also shared by Canada and the US. South Korea said that the measures introduced in December had already had a serious effect on South Korean exports of autos to Brazil, and trade damage had been inflicted. Before pursuing its waiver request, Brazil should first rescind the order already in place.

On the shrimps, Philippines raised the issue on behalf of Asean.

The Philippines complained that as a result of a decision of the US Court on International Trade issued on 29 December last, exports of wild harvest shrimps to the US after 1 May this year would be embargoed if exporting countries did not adopt the sea harvest conservation programs compatible with the US program. The US Public Law 101-162, by Section 609, requires other nations exporting wild harvest shrimps to the US to have comparable programs. The US program includes mandatory use of sea turtle excluder devices (TEDs) on all commercial shrimp trawlers and effective enforcement of the measure.

While the ban from 1 May is restricted to exports to the US of wild harvested shrimps, and does not cover aquaculture shrimp, each shipment of the latter has to carried a declaration and government certification.

The Philippine statement viewed the US actions as violating the WTO rules. While Asean nations were, like the US, cognisant of the need to protect sea turtles, both as a natural heritage and for their economic importance, they felt that imposing a program comparable to that of the US on others raised questions of extra-territorial jurisdiction.

The Philippines referred in this connection to the tuna-dolphin case in the GATT (where a panel ruled against the US) and said that while some Asean countries may comply with the US and provide certification, they were doing so under protest and reserved their WTO rights.

A number of other countries expressed support and shared the concerns expressed by the Philippines. These countries included India, Hong Kong, Mexico, Pakistan, Australia, Venezuela, and Korea. Mexico suggested that the US action was really protectionist one.

The US denied that its action was protectionist, and said that its actions were motivated by the need to conserve an endangered species and such need for protection was recognized by most members under the CITES treaty. The US however said that the US court decision had not yet become effective, and the US administration (Justice Department) was considering actions to seek court clarification and modification of the order.

According to US media reports, the US program would require shrimp trawl boats installing the TEDs -- basically a $400 device for each net to enable sea turtles to escape the trawling. The program does not affect, as the Philippines pointed out, aqua-culture shrimp farming. However, the media reports noted, that the aqua-culture shrimp farming and use of various chemicals for this, results in discharge of toxic wastes into the sea which affects the sea turtles.