US and Europe close to deal on Cuba conflict

Ambassadors from the 15 EU member states meet in Brussels today to give their verdict on a deal which the European Commission hopes could resolve the bitter dispute with the United States over Cuba, ending one of the most difficult chapters in the recent history of transatlantic relations.

But while Friday's proposed agreement, defusing a threatened clash in the Geneva-based World Trade Organisation, represents an important breakthrough after weeks of tense negotiations, talk of a definitive settlement of the Helms-Burton row is still premature. Italy and Spain, the EU member states most affected by the Helms-Burton Act - which penalises foreign companies accused of "trafficking" with Cuba - indicated over the weekend that they are not fully satisfied with the deal.

The accord leaves the Helms-Burton law on the statute books, although President Clinton is to seek an amendment to how it will apply to European companies. Ambassadors will today be seeking further clarification from Sir Leon Brittan, the EU trade commissioner, about the extent of the concessions won and may request a special meeting of EU foreign ministers to consider them.

Even if approved by the 15 member states, the deal is premised on agreement by the US congress that European companies and company executives will be shielded from the effects of legislation against Cuba, but also Iran and Libya. President Clinton's ability to deliver is far from guaranteed.

Congress may insist that existing EU investments in Cuba - safeguarded under the deal - be liquidated. Senator Jesse Helms, the Republican senator who co-sponsored the anti-Cuba act, has already indicated he would press for this requirement before voting to amend application of the legislation. Congressional agreement to grant an EU waiver to a clause in the Act - which bans executives from companies doing business with Cuba from visiting the United States - also hinges on the outcome of new talks on future investments. Negotiators will have to tackle the principle of extraterritorial application of trade laws, the biggest bone of contention in the Helms- Burton dispute.

In the immediate term, the outline accord averts an acrimonious EU-US confrontation in the World Trade Organisation. Sir Leon Brittan will recommend that Brussels requests a suspension of the WTO disputes panel, which was scheduled to hear its complaint against the US today.

The US has assured that President Clinton will continue to suspend the Helms-Burton provision which allows American citizens to sue foreigners doing business in property or assets seized when Fidel Castro came to power.

The EU's complaint to the WTO on the D'Amato legislation, which penalises foreign companies with energy investments in Iran and Libya, also deemed "hostile" to the US, is also being suspended, but will be reinstated if any part of the package unravels.

President Clinton enacted the Helms-Burton law last year after Cuba shot down two planes flown by Cuban exiles from Miami.