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Clinton runs into G7 wall on Cuba

Robert Evans Reuter

Financial Post, Weekly edition, Sat 29 Jun 96

Leading global powers, scrapping over U.S. measures to cut international trade with Cuba, Iran and Libya, pledged Friday to avoid actions violating the rules of the World Trade Organization.

In a statement on economic policy at their summit in Lyon, the Group of Seven -- the U.S., Canada, Britain, France, Italy, Germany and Japan -- also called for the WTO's first ministerial conference in Singapore in December to look at widening its scope to cover investment and competition policy.

But the statement was issued after U.S. President Bill Clinton ran into what one official described as "a solid wall of opposition" over the U.S. effort to limit trade and investment in Cuba.

U.S. officials, who in recent weeks had adamantly refused to recognize the strength of feeling abroad on this issue, appeared to be backing off their earlier stance and called for "understanding" for Clinton's position.

National Security Council official Sandy Vershbow on Friday quoted Clinton as saying that if the European Union put more pressure on Cuba to liberalize politically it would help him to get changes in controversial legislation.

Criticism from Canada and the other five powers was focused on a measure drafted by anti-communist hardliners in Congress and signed into law by Clinton earlier this year, allowing for action in U.S. courts against foreign firms doing business in Cuba.

Similar, although less wide-ranging, action aimed at trade and investment in Iran and Libya is nearing finalization in Congress.

Leaders argued that trade sanctions, particularly imposed unilaterally by one power and aimed at firms in third countries, were inappropriate.

"We don't think it is acceptable to have unilateral action that has extra-territorial consequences," Prime Minister Jean Chretien told reporters.

Italy's Prime Minister Lamberto Dini told a news conference that the U.S. "cannot, should not, and I don't think can afford to, go it alone on matters like this, so there will be a thinking over of the entire problem in the coming months."

The summit statement said the participants "reaffirm our commitment to working to strengthen the confidence in and credibility of the multilateral trading system by avoiding taking trade and investment measures that would be in contradiction with WTO rules . . ."

This satisfied Washington, which argues that the U.S legislative moves are covered by WTO accords allowing for unilateral action to defend national sovereignty.

The European Union has challenged the Cuba measure in the WTO, and European Commission president Jacques Santer said the statement "has given an unambiguous signal that go-it-alone tactics are not the way to settle one's trade questions."

This information is provided by the Financial Post.

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