HELMS-BURTON ACT: A LOOSE CANON?
Wayne S. Smith
10-11, 1997 the Center for International Policy, the Canadian Foundation
for the Americas (FOCAL), and the Institute for European - Latin American
Relations (IRELA) co-hosted a conference in Washington on the pros
and cons of the Helms-Burton Act.
large the conference concluded that the Helms-Burton Act was not working
as its authors intended. It has had insignificant impact on the Cuban
economy, certainly not sufficient to force a change of government
or even a process of reform. On the contrary, the effect in Cuba was
seen to be an internal crackdown and a slowing of reforms. Rather
than improving the human rights situation, Helms-Burton worsened it.
spokesmen for the Clinton administration, including Ambassador Stuart
Eizenstat, maintained that the law was working inasmuch as other countries
were paying more attention now to the questions of democratization
and human rights in Cuba. They cited especially the common position
adopted by the European Union in December, 1996, as evidence of this,
since it conditioned an economic cooperation agreement with Europe
on reforms in Cuba. Europeans and Canadians, however, said they were
already giving attention to those issues well before Helms-Burton
was enacted and that the common position was simply a matter of formalizing
what had all along been their approach.
the conference found, international reaction to the law was one of
outrage. The law was seen as a blatant violation of international
law and treaties the United States was bound to uphold, and as extraterritorial
in nature. Concern in the international community went well beyond
Helms-Burton, conference participants found. It was seen as but one
symptom of a trend in the United States toward unilateralism -- toward
ignoring rule of law and relying increasingly on unilateral sanctions.
American business especially was concerned that this trend would have
costly consequences for the United States.
to the bill was found to be bipartisan and growing. Virtually all
conference participants were agreed that repeal was unlikely for several
years to come. Opponents believed that with continued international
pressure, pressure from the U.S. business community, and an educational
campaign to acquaint the American public with the laws full
ramifications, Congress might be persuaded to make some ameliorative
adjustments over the next couple of years and eventually consider
removal of what former president Jimmy Carter has called "the
worst piece of legislation" he has ever seen.
SUPPORT AND OPPOSITION CUT ACROSS POLITICAL LINES
discussed during the course of the conference, and indeed reflected
by the participants themselves, was that opposition to the bill is
deeply and broadly bipartisan. This was not a liberal-conservative
issue, much less one between Democrats and Republicans. On the contrary,
strongest opposition -- and concern -- at the conference was expressed
by conservative businessmen, including representatives of the U.S.
Chamber of Commerce and the National Association of Manufacturers.
Few of these had any interest in doing business with Cuba, or even
any particular interest in U.S. policy toward Cuba itself. Rather,
they saw Helms-Burton as being bad for international business in general
and as putting at risk U.S. trade ties with its principal friends
and trading partners and undermining such organizations as the World
Trade Organization, over the essentially extraneous issue of Cuba.
noted that while Democrats as well as Republicans in Congress and
the Clinton administration, defended the legislation, a minority of
both parties in the Congress strongly opposed it. Opposing also were
Democrats such as Jimmy Carter, Jesse Jackson, and George McGovern,
and Republicans such as James Baker, Malcolm Wallop and Lawrence Eagleburger,
the latter calling it not only mistaken, but reflecting "an imperial
was a sense also among most American participants that while the measure
was approved by a lopsided majority over a year ago, there was now
little enthusiasm for it except in the Congress, the Administration,
and perhaps in Miami. Even so, the consensus was that there was little
prospect for repeal -- at least in the near term.
AND UNANIMOUS INTERNATIONAL REACTION
Canadian and Mexican participants pointed to the fact that international
reaction was strongly opposed to Helms-Burton. Not a single other
government supported it. Canada, Mexico and the European Union had
all enacted retaliatory legislation to enable their citizens and businesses
to countersue any U.S. entities who took them into U.S. courts over
properties lost in Cuba more than thirty years ago. The Organization
of American States had unanimously condemned Helms-Burton and the
Inter-American Juridical Committee had ruled that this kind of legislation
would violate international law on at least eight counts.
governments regarded Helms-Burton as not only in violation of international
law but also extraterritorial in nature. "Canadian businesses
will adhere to Canadian law and trading practices, not be dictated
to by a foreign power," was the way one Canadian participant
summed it up.
OVER TREND TOWARD UNILATERALISM
clear during the course of the conference that the central concern
of opponents, both American and foreign, went well beyond Cuba or
U.S.-Cuban relations. Rather, European, Canadian and Mexican participants,
as well as American businessmen, legal experts and academics, all
expressed deep concern that Helms-Burton represented an acceleration
in the developing trend in the United States, and especially in Congress,
toward unilateral sanctions as a primary foreign policy response.
This was already making the U.S. less competitive and was cutting
into exports. Helms-Burton could only worsen the situation.
to the economic consequences, Helms-Burton was found to lead away
from the kind of international system based on rule of law and clear
rules of the game that many Americans had hoped would come to characterize
the post-Cold War period. It was pointed out that Helms-Burton was
being interpreted by other governments as a signal that the United
States, being the only superpower left in the world, did not intend
to abide by international law or even treaties and agreements to which
it recently became a party. It would do as it wished.
it was noted, was a dangerous attitude to take in this highly interdependent
world in which U.S. economic sway was on the decline.
SEEN AS NOT ACHIEVING ITS STATED OBJECTIVES
the major substantive conclusions reached by the conference was that,
except in a very narrow and limited sense, Helms-Burton was not working.
According to the language of the act itself, its purpose was to increase
economic pressures on the island so as to replace Fidel Castro with
a transitional government that would lead the island to full democracy.
Defenders of the act maintained that it had indeed led to a drop-off
in investments and bank loans. Opponents agreed that the act had had
some early and limited impact on the economy, but pointed out that
this was already receding. A few companies had pulled out, but others
had already taken their place and the Cuban economy continued to recover,
its growth rate for 1996 being over 7 percent. Canadian investments
and trade had actually increased in the wake of Helms-Burton. Further,
more and more companies would ignore Helms-Burton as it became apparent
that Title III would not stand up in U.S. courts even if implemented,
and that in fact it was not likely ever to be implemented. In one
of the most interesting revelations of the conference, it was pointed
out that one reason it would not be implemented is that there were
already other ethnic groups, including hundreds of Palestinian-Americans,
ready to file class action suits the moment it might be enforced --
the latter claiming an equal right to sue the Israeli government for
lands taken from them in Gaza and on the West Bank.
also pointed out that Helms-Burton suffered from an almost total disconnect
between means and ends. The relatively minor degree by which it might
increase Cuba's economic distress would certainly not induce Fidel
Castro to resign and go live in exile, nor would it bring about so
severe a crisis as to lead to an uprising or even a civil war. How
then was Helms-Burton to produce a transitional government without
Fidel Castro? The conferences answer to that was that it could
not. It could not possibly achieve its central stated objective.
of the act, and especially spokesmen for the Clinton administration,
including Ambassador Stuart Eizenstat, insisted that it had already
led to a more coordinated defense of human rights on the part of the
Europeans, and to some extent of the Canadians and Latin Americans.
The common political position adopted by the European Union last December
was presented as prima facie evidence of this.
and Canadians, however, insisted that in their discussions with the
Cubans, they had always raised the question of human rights and urged
improvements. Thus, they said, there was nothing really new in their
positions as the result of Helms-Burton. As Mr. Sweder van Voorst
of the Netherlands foreign ministry put it: "Ambassador Eizenstat
would have us believe the European common position was in response
to Helms-Burton, but this is absolutely not the case."
also noted that if Helms-Burton were intended to improve the situation
of human rights in Cuba, it had had the opposite effect. Since its
passage, there had been an internal crackdown, not a loosening up.
This was to be expected, for the Cuban government always responded
to increased pressures from the United States by calling for greater
internal discipline and exercising heightened control.
Browne of FOCAL pointed out that conference participants who were
proponents of Helms-Burton seemed to have adopted a whole new set
of objectives for it -- objectives considerably more modest than those
first indicated. While at the time the act was signed the public was
told that the objective was to choke off investments and increase
economic pressures to the point of producing a change of government,
it was now told that the purpose was simply to get other governments
to focus more attention on human rights in Cuba. Dan Fisk of Senator
Jesse Helms's staff said that the act was succeeding because it had
advanced four major policy objectives: (a) halting the drift toward
normalization in U.S. policy, (b) stimulating the global isolation
of the Castro regime, (c) complicating Castro's investment schemes,
and (d) having the United States prepare for Cuba's democratic transition.
any moves toward normalization was not described as one of the act's
objectives a year ago, the conference noted. As for isolating Castro,
Helms-Burton had isolated the United States considerably more. And
as for preparing the United States for Cuba's democratic transition,
there was no explanation at all as to how Helms-Burton was to bring
about that transition. Mr. Fisks saying that the act was designed
to "complicate" Castro's investment schemes rather than
choke them off, also seemed to be a matter of downsizing the act's
objectives to unimportant dimensions and then declaring victory.
Ranneberger of the State Department said Helms-Burton had two major
objectives. The first was to promote democratic transition by discouraging
foreign investment. The second was to protect the property rights
of U.S. citizens.
Smith of CIP retorted that, as had been stated before, there was no
indication as to how some small decline in investments was supposed
to bring about democratic transition. And the rights of American property
owners could have been advanced more effectively by negotiating a
compensation agreement with the Cuban government. The latter recognized
its obligation to compensate those owners and had on several occasions
indicated its willingness to negotiate an agreement -- as it had done
with every other country that had claims against Cuba. The United
States did not wish to negotiate such an agreement because that would
be perceived as a long step toward normalization, Smith noted. It
was this political calculation, and not protection of American property
rights, that underlay the U.S. position.
several participants expressed thanks that Helms-Burton was not working
as its proponents had hoped. If it were having the kind of devastating
impact on the Cuban economy that might lead to some sort of explosion,
it was clear that Castro would fight rather than quit and that many
would fight with him. To speak seriously of Castro's ouster, then,
was to speak of armed conflict and massive bloodshed, perhaps even
a full-scale civil war, with all that implied in terms of tens of
thousands of refugees on Florida's beaches and disruptions of commerce
and communications throughout the region. That should be the last
outcome the United States would want, participants believed. Fortunately,
Helms-Burton was not working and was therefore unlikely to produce
such an outcome.
were Cuba moving toward some kind of systemic crisis as the result
of economic pressures exerted by Helms-Burton, participants were concerned
that Castro would again open the refugee floodgates before the situation
reached critical mass. Again, fortunately, Helms-Burton gave no evidence
of an ability to produce such an outcome. That its purpose was to
increase economic distress, however, would seem to work directly against
U.S. interests and objectives. The 1995 refugee agreement with Cuba
was clear proof that the United States did not want floods of Cuban
boat people on its shores. Yet, with Helms-Burton, it was trying to
create the very economic conditions which might cause them to take
to the boats again. This can only be seen as counterproductive, if
CLEARLY VIOLATES INTERNATIONAL LAW
fundamental conclusion of most participants was that Helms-Burton
violated international law. Defenders of the act pointed to Article
17 of the Universal Declaration of Human Rights as the basis for their
claim that there was an internationally recognized right to own property,
a right whose violation by the Cuban government justified the actions
taken under Helms-Burton. Opponents, however, noted that the Universal
Declaration was not a binding document and that the right to own property
was not written into any of the binding covenants. No such right existed
under international law, nor did a government's nationalization of
its citizens' properties, with or without compensation, fall within
the purview of international law. Further, the United States itself
had always recognized that a state cannot advance the claims of those
who were not its citizens at the time they lost their properties.
The U.S. Claims Commission noted that this was so enshrined a concept
of international law that it required no further discussion. But now,
with Helms-Burton, that enshrined principle was being ignored.
Canadian and Mexican participants stressed that it was this quality,
i.e., Helms-Burton's dismissal of international law and treaties the
United States had considered binding, that was intolerable to them.
As one participant put it, "Helms-Burton seems to assume the
United States is above the law. If we accept that, then the whole
international system begins to break down."
for that reason that the European Union had felt compelled to file
a complaint against the United States in the World Trade Organization.
The United States had passed legislation which broke the rules. Like
it or not, it had to be held accountable. As Ambassador Hugo Paemen
of the European Union put it, there was a principle involved that
could not be overlooked. The rules of conduct must be adhered to by
all. The United States had agreed to those rules. If it were allowed
so flagrantly to break them, then what would prevent others from doing
so? "No," said Ambassador Paemen, "the law must be
upheld." And, he suggested, the WTO was the proper venue in which
to uphold it.
Tramhel of the Inter-American Juridical Committee agreed fully that
Helms-Burton violated international law. She explained that after
analyzing a hypothetical law which was the mirror image of Helms-
Burton (in order to avoid reaching a judgment on the internal legislation
of a member state) the committee had concluded unanimously that such
legislation was not in conformity with international law. In fact,
the committees report had indicated it to be in violation on
at least eight counts.
NATURE OF HELMS-BURTON
of the act, both American and foreign, expressed concern at the apparent
willingness of the Clinton administration and the U.S. Congress to
ignore international law, the opprobrium of the entire international
community, and condemnation in both the United Nations General Assembly
and the Organization of American States. This suggested not only a
turn toward unilateralism, but an arrogance which was entirely misplaced
in this increasingly interdependent world. Perhaps even more disturbing
was the fact that the United States was defying world public opinion
in order to push forward legislation which was not working and could
not achieve its stated objectives. Indeed, even if it had the capability
of achieving those objectives, the consequences would be disastrous
for the United States itself: tens of thousands of Cuban refugees
on U.S. shores.
evidence of its irrationality, however, was that it placed at risk
critically important U.S. commercial relationships with Canada, Europe,
Mexico and several other states and the future of the World Trade
Organization over Cuba, a tiny island which posed no security threat
whatever to the United States and which indeed in the post-Cold War
world should not even be on the radar screen of U.S. foreign policy
SUBSEQUENT TO THE CONFERENCE
mid -April, the United States and the European Union reached a preliminary
agreement which had the effect of at least postponing until October
their confrontation in the WTO. For its part, the EU agreed to hold
off its complaint before the resolution panel of the WTO for six months,
and during that time to use the Cuban case as a precedent in establishing
global standards for resolving disputes over confiscated property
and foreign investments in them. This will be done within the context
of the Multilateral Agreement on Investment (MAI), now being negotiated.
its part, the United States agreed to continue to postpone implementation
of Title III, under which foreign entities can be sued in U.S. courts
for "trafficking" in lost U.S. properties, and to seek new
legislation to give President Clinton waiver authority for Title IV,
under which executives of "trafficking" foreign companies,
and their wives and children, could be denied visas to enter the U.S.
an agreement on how to handle nationalized properties can be reached
in the MAI remains very much to be seen. One spokesperson for the
EU described U.S.-EU discussions on the matter as "purely exploratory."
whether the Congress will give President Clinton waiver authority
for Title IV also remains very much to be seen. The preliminary agreement,
in other words, may not hold up. Meanwhile, the effect has been to
render Helms-Burton impotent. As one observer noted, without Titles
III and IV, the Helms-Burton Act has no teeth.
in mid-April, corporate America, including representatives who participated
in the February conference, launched a campaign against unilateral
trade sanctions such as Helms-Burton. With the participation of some
of the country's largest corporations, and with the support of former
president Carter and Republican senator Richard Lugar, a new coalition,
USA Engage, was formed to persuade policy makers that unilateral
sanctions are counterproductive. The coalition, led by the National
Foreign Trade Council, said trade sanctions should only be used as
a foreign policy alternative of last resort. The new coalition plans
to mount a major lobbying effort against unilateral sanctions, including
PROGRAM OF EVENTS
Massachusetts Ave., NW
a year later: Is it working?
Fisk, professional staff member, Senate Foreign Relations Committee
Jenkins, president, Cuba Business (London)
Ranneberger, director, office of Cuban affairs, US Department
Kirk, professor of Latin American Studies, Dalhousie University
Smith, senior fellow, Center for International Policy
international law and a closer look at trade embargoes.
Muse, attorney, Muse & Associates
Mora, attorney, Holland & Knight
Tramhel, legal division, Organization of American States
Hufbauer, fellow, Institute for International Economics
The American business community, Helms-Burton and other sanctions
Lane, Washington Director Governmental Affairs, Caterpillar, Inc.
Roth, partner, Flippo, Roth and Associates
A. Workman, vice president, international, U.S. Chamber of Commerce
Peter Blyth, president, Radisson Development Worldwide
Marcich, director for international investment, National Association
Coping with Helms-Burton
M. Horn, Institute for Entrepreneurship in Emerging Economies,
Anderson, partner, Weil, Gothsel & Manges, LLP.
Olson, Latin America Working Group, Washington, D.C.
Ways & Means Subcommittee
House Office Building B-318
Ave. & S. Capitol St., SW
Reaction of US trading partners to Helms-Burton.
Covarrubias, El Colegio de Mexico
Doug Lewis, chairman, Cuba-Canada Business Committee of the Canadian
Council for the Americas
Richter, director, Latin American affairs, German foreign ministry
Kittelman, member of parliament, European Union
Retaliation or Retreat? The international community responds to
Godfrey, Member of Parliament, Canada
Milliken, Member of Parliament, Canada
Hayes, chief for U.S. relations, European Commission
Van Voorst, deputy director, Western Hemisphere department, Dutch
Armstrong, The Information Trust, Washington, D.C.
de Galainena, Spanish subdirector general for international economics,
Mnistry of Foreign Affairs
de Jesus Ruiz Bravo, director of U.S. law, legal advisors
office, Mexican Foreign Ministry
Hoffman, Institute for Iberoamerican Studies
Is an open society in Cuba advanced by a policy of isolation?
Gunn Clissold, director, Caribbean Project, Georgetown University
Smith, professor of history, Yale University
Kaufman Purcell, vice president, Americas Society
Thomas, former British undersecretary for the Americas and ambassador
Conference summary and comments.