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Commentary: Uncle Sam Isn't Playing Fair With The Wto


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COMMENTARY: UNCLE SAM ISN'T PLAYING FAIR WITH THE WTO

It has been a year since Cuban fighter pilots fired on two unarmed Miami-based Cessnas off Cuba's northern coast, killing four on board. But the reverberations from the attack continue.

Now, the repercussions are reaching the World Trade Organization, the Geneva body set up in 1995 to settle trade disputes. The U.S., which was a driving force behind creating the WTO, is jeopardizing the fledgling body by threatening to boycott a WTO panel investigating the Helms-Burton Act, an outgrowth of the Cessna incident.

Signed just weeks after the shoot-down, the law added two new provisions to 30 years of trade sanctions against Cuba. One allows the State Dept. to deny visas to executives of foreign companies that invest in Cuba. The other lets Americans sue in U.S. courts to recover damages from companies that "traffic" in expropriated property--even if they are foreign multinationals.

The defense of this heavy-handed Cuba policy has placed the Clinton Administration in an escalating trade dispute with some of America's closest allies. And while some in the Administration admit that its continuing attempts to isolate Cuba are an embarrassing mess, policymakers can't seem to find a way to extricate themselves.

NO-SHOW? The latest crisis came after the WTO appointed a three-member panel to hear a complaint from the European Union against U.S. policy on Cuba. "We just won't show up," vowed one senior Administration official on Feb. 20.

But a no-show at the hearing would encourage other nations to do the same. Moreover, the U.S.--which has filed 23 trade complaints with the WTO, more than any other country--could lose a potentially valuable crowbar for prying open foreign markets. In fact, U.S. trade officials announced their boycott of the WTO panel on the same day that they brought their most significant WTO case yet: charging that Japan is restricting foreign access to its photographic film and paper market. On Feb. 25, the WTO set up five more panels, four of them in response to U.S. complaints about market barriers in Europe and Latin America.

The Clintonites started down this slippery slope when the President signed the Helms-Burton bill. The U.S. law immediately raised the ire of European nations, which objected to the possibility that their multinationals could face thousands of lawsuits in U.S. courts if they continued to pursue trade with Cuba.

PALTRY PENALTY. Even worse than the law is America's refusal to attend any panel hearing on Helms-Burton. That is shortsighted. The U.S. is giving up a chance to set a better example. And it's overreacting: The WTO cannot rewrite U.S. laws. It can only levy a financial penalty. "Even if we lost the case before the WTO, the compensation we would have to pay to the Europeans would be minimal," argues Julius Katz, a former deputy trade ambassador.

The Administration, which is seeking new authority from Congress to expand the North American Free Trade Agreement throughout the hemisphere, believes it has to demonstrate toughness. But ignoring the arbiter of free trade is not the way to show resolve. "This is twisted logic if the goal is to expand hemispheric trade by destroying the best mechanism for preserving global free trade," says Philip J. Brenner, a Cuba expert at American University.

For the past year, the fallout from the "Cuban Cessna crisis" has only gotten worse. It's time for the U.S. to change the Helms-Burton law, negotiate a compromise with the EU, or show up and pay the fine.By Paul MagnussonReturn to top

TABLE

When America Needs Help, Who Does It Call?

The U.S. has brought 23 complaints before the World Trade Organization involving dozens of countries. Some of the biggest:

JAPAN: The U.S. claims that Japan blocks sales of foreign photographic film and paper with laws and regulations aimed at protecting Fuji Photo Film.

EUROPEAN UNION: The U.S. objects to a European ban on beef with growth hormones. It also opposes preferential treatment of banana producers in former British and French colonies.

BRAZIL AND INDONESIA: The U.S. wants to end Indonesia's limits on imported cars and the conditions that Brazil puts on auto importers.

PHILIPPINES: The U.S. wants the WTO to force the Philippines to deliver on an agreement it made in 1996 to provide more import licenses for U.S. pork.

DATA: OFFICE OF U.S. TRADE REPRESENTATIVEReturn to top


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