Introduction to the Conference Summary
It became clear during the course of the conference that opposition to the Helms-Burton Act was 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. 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. It was noted that while Democrats as well as Republicans in the Congress and the Democratic 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, Malcom Wallop and Lawrence Eagleburger, the latter calling it not only mistaken, but reflecting "an imperial policy."
There 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.
It became clear also 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.
In addition 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.
This, it was noted, was a dangerous attitude to take in this highly interdependent world in which U.S. economic sway was on the decline.
One of 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 noted 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.
Opponents 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 conference’s answer was that it could not. It could not possibly achieve its central stated objective.
Defenders of the act, and especially spokesmen for the Clinton administration, 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.
The Europeans 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.
Opponents 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.
Another fundamental conclusion was that Helms-Burton violates 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 is 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 could not 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 has been ignored.
European, Canadian and Mexican participants stressed that it was this quality, i.e., Helms-Burton's insouciance toward international law and treaties the U.S. 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."
It was for that reason that the European Union had felt compelled to file a complaint against the United States in the World Trade Organization. The U.S. had passed legislation which broke the rules. Like it or not, it had to be held accountable.
In sum, Helms-Burton had already cost the United States dearly and the cost was likely to rise. While virtually all conference participants were agreed that repeal was unlikely for yet several years at least, opponents felt that with continued international pressure, pressure from the U.S. business community and an educational campaign to acquaint the American public with the Act's full ramifications, Congress might be persuaded to make some ameliorative adjustments over the next couple of years and eventually consider removal of what Jimmy Carter has called "the worst piece of legislation" he has ever seen.
Dialogue: The United States and the European Union
Moderator - Robert White
Discussants
Ambassador Stuart Eizenstat - President Clinton’s Special Representative for the Promotion of Democracy in Cuba
Ambassador Hugo Paemen - Ambassador to the United States from the European Union
Ambassador Eizenstat said that the United States and its European allies share the objective of promoting democracy in Cuba. His mission is to build a multinational effort to promote that democracy. He had indeed encountered anger and hostility among U.S. allies over the implementation of the Helms-Burton Act, particularly with regard to Title III, the section which allows claimants to file suits against foreign companies profiting from confiscated property in Cuba. The hostility, he went on, had not ceased entirely, but he felt they’d been able to get past it and begin to work toward the common goal.
He went on to say that the Helms-Burton Act does not bar trade with Cuba; rather, it imposes sanctions against those who use confiscated U.S. property. Those sanctioned could have avoided the issue simply by exercising due diligence in determining that the property was encumbered by a registered U.S. claim.
As an example of how the Europeans and the U.S. are now working more closely together, he mentioned the recent passage of the European common position, which called for increased pressure on Cuba with regards to human rights and democracy. He also mentioned the pressure exerted on Castro at the Ibero-American Summit in Santiago where Latin American leaders had issued a tough call for fundamental change in Cuba. In the private sector, he said the Transatlantic Business Dialogue had called upon businesses to exercise their best business practices including safe working conditions and non-discrimination. This was expanded by the European delegation to call for businesses to urge the Cuban government to give them the right to hire and pay workers directly.
Ambassador Eizenstat went on to say that the administration had suspended the enactment of Title III in light of the recent efforts to promote democracy and human rights in Cuba and would continue to do so as long as the others continued to step up their efforts.
Ambassador Paemen responded that the European Union of course wished to promote democracy and a market economy in Cuba. They want to encourage change in Cuba, but they differ with the U.S. over the means of doing so.
He stated that their problems with Helms- Burton are on two levels: a political one and a legal one. On the political level, the European Union did not believe that sanctions were a good tool, unless the vast majority of the world community was involved. The unilateral U.S. embargo simply gave Castro a pretext to defend Cuba against a perceived threat. The embargo, and Helms-Burton in particular, only hurt the people of Cuba, while giving the government added political strength.
On the second level, the European Union disagreed with the Helms-Burton Act for legal reasons. The EU deemed it to be an extraterritorial application of what should remain a domestic law. Ambassador Paemen said the U.S., as a matter of sovereignty, would never accept such a law from any other country in the world. Neither would its allies. While the U.S. had a right to continue its unilateral sanctions it did not have the right to impose these sanctions on Europe or the rest of its allies.
Ambassador Paemen felt the establishment blocking statutes was a legitimate response to Helms-Burton. He reminded the audience that the U.S. had passed such statutes in similar circumstances some years ago (against the Arab boycott). He also felt that the European Union was justified in bringing the dispute before the World Trade Organization. He believed the issue to be primarily a trade matter, and said that even if there were a national security dimension between the U.S. and Cuba, he failed to understand how there could be one between the U.S. and Europe.
While he hoped that the dispute would not escalate to the point of an actual WTO finding, he defended the WTO as the appropriate venue to resolve the matter: There is a principle involved which simply cannot be overlooked. The rules of conduct must be adhered to by the member states. The U.S. agreed to those rules. If it were allowed so flagrantly to break them, then what would prevent others from doing so. No, he concluded, the law must be upheld.
Panel I: Is Helms-Burton Working?
Moderator -- Dean J. Browne, FOCAL
Panelists
Dan Fisk - Senate Foreign Relations Committee
Gareth Jenkins - Cuba Business Ltd, London
Michael Ranneberger - U.S. Department of State
John Kirk - Dalhousie University, Halifax
Wayne S. Smith - Center for International Policy
"There is a complete disconnect in Helms-Burton between means and ends. The principal stated objective is to bring about a transitional government without Fidel Castro. His ouster, then, is the end sought by the Act. The means is by increasing economic pressure on the island. Yet, there is no way that some relative increase in economic distress can achieve that objective. Castro is certainly not going to resign because of some drop-off in investments. How then is the objective to be obtained? Proponents of the Act cannot tell us." -- Wayne S. Smith
Economic Impact? Very Little
Mr. Dan Fisk opened the session by asserting that the LIBERTAD Act was working: The Castro regime was in overdrive to counter the Act; and if it were not working, "no one would be here [at this conference]."
The fall-off in investments and impact on the Cuban economy were undeniable, Mr. Fisk continued. Mr. Ranneberger agreed. At least twelve companies had pulled out of Cuba, he said, and the number was probably much higher. Clearly, the Cuban economy was suffering.
The other panelists disagreed that Helms-Burton was working. Mr. Smith took issue with Mr. Fisk's opening statement by noting that the conference had been convened because of the harm the Act was wreaking on U.S. relations with its closest trading partners, not because of any harm it was doing to Cuba. Yes, they all agreed, Helms-Burton had had some initial chilling effect on the investment climate in Cuba, but this was already receding.
Mr. Jenkins said he was unaware of any European companies already present in Cuba that had pulled out; a few large companies that had been thinking of investing had indeed backed off because of Helms-Burton, but, small and medium size companies were already taking their places. Banks had pulled back on financing, but companies were finding other sources. The results spoke for themselves: Cuba's growth rate for 1996, despite Helms-Burton, had been 7.8%. It might not be that high in 1997, but would be quite respectable. One could hardly say, therefore, that the economic impact of Helms-Burton had been significant.
Mr. Kirk said he didn't know what twelve companies Mr. Ranneberger had reference to, but what he could say was that Canadian investments in and trade with Cuba have actually increased considerably in spite of -- and possibly even because of -- Helms-Burton. Canadian exports to Cuba were up almost 10% and imports from Cuba over 30%. He noted that when in November of 1996, the Sherritt Company, realizing that bank financing would be difficult, had come out with a public debenture issue hoping to raise some $300 million for new investments, the issue had been oversubscribed within hours to the tune of $1.3 billion. Sherritt had decided to take $600 million. Clearly, there was little problem in Canada with financing; thus, investments could be expected to increase still further. In terms of its economic effectiveness, then, Helms-Burton had to be judged a failure.
Mr. Smith agreed that the initial chilling effect of Helms-Burton was already passing. Foreign companies would give less and less attention to Helms-Burton, he predicted, as it became apparent that Title III (under which U.S. nationals supposedly can take foreign entities to court over properties lost in Cuba more than 30 years ago) would probably not stand up in U.S. courts even if it were implemented, and that in fact it was not likely ever to be implemented. Implementation would trigger all the retaliatory legislation passed by Canada, Europe and Mexico, thus causing chaos in international commercial circles. It would also clog U.S. courts (since State Department estimates are that upwards of 200,000 suits would be filed). And, most compellingly, it would also result in hundreds of Palestinian-Americans filing class action suits demanding an equal right to sue the Israeli government over lands lost on the West Bank and in Gaza (as was to be discussed in a later panel). These consequences would be unacceptable to any U.S. Administration and therefore Title III would remain in a state of suspension.
A Necessary Form of Pressure?
Mr. Ranneberger put forward the proposition that without pressure, there would be no reforms. The U.S. judged the Cuban government to be unwilling to institute reforms except under pressure; hence, the purpose of the U.S. was to increase economic pressures against Cuba to the point that the latter had no alternative but to institute reforms.
Mr. Fisk agreed, noting that the tinkering with the economic system so far had been only tactical in nature and the small resulting changes were easily reversible. He argued that economic power did not necessarily lead to political power, pointing to the fact that the South African apartheid regime, the de facto Haitian military regime, and the Chinese regime in Beijing, were and are willing to allow their citizens some economic space, but that did not and does not translate into social and political rights.
Mr. Jenkins, however, said he had read the plan for a post-Castro Cuba just put forward by USAID with disbelief. It revealed a staggering ignorance inside the U.S. government as to what was in fact going on in Cuba. The collapse of the Soviet Union and Cuba's consequent loss of the preferential trading relationship it had once had with that country was all the incentive Cuba had needed to begin a process of reform, which was now quite advanced, though of course much more remained to be done. Many of the reforms proposed in the USAID plan for the future, such as banking reforms, monetary reforms and reforms to provide market mechanisms, were in fact already being implemented, and European technicians were assisting in their implementation.
Not only was U.S. pressure unnecessary, Mr. Smith, suggested, but it was actually counterproductive. Given the history between the two countries, when the U.S. tried to exert pressure, the Cuban government's instinctive response was to resist. Thus, rather than stimulating change, U.S. pressure impeded it.
An Instrument to Improve Human Rights in Cuba?
Mr. Fisk focused his remarks on the repressive nature of the Castro regime and on how the LIBERTAD Act had contributed to the international community's recent attention on Castro's human rights record. He argued that there had been "a deafening silence" from the international community in the face of massive repression and violations of human rights in Cuba, especially when compared to the international outcry over repressive governments in Haiti and South Africa. The LIBERTAD Act was forcing an end to the international complacency towards Castro's repression, as noted already in the changed attitude of the Europeans, who have elevated through the "Common Position" their commitment to pursue with the Cuban government, inter alia, respect for human rights and release of political prisoners, as well as specific and concrete progress towards democracy in Cuba. Mr. Fisk noted that while the EU had downplayed the "Common Position" as a reflection of existing policy, the fact was that the EU policy was codified after the enactment and as a result of the LIBERTAD Act.
Taking a somewhat different position, Mr. Ranneberger said it was not that the Europeans, Canadians and others had never done anything to advance the cause of human rights; rather, it was that the United States wanted to see a more concerted effort on their part. Ambassador Eizenstat seemed to have won their support on that score and Castro was now hearing a more united chorus than ever before calling for change and greater respect for human rights. In that sense, Helms-Burton was obviously working.
Taking issue vigorously, Mr. Kirk said there had never been any "deafening silence" from the Europeans and Canadians on the issue of human rights. The Canadians had consistently raised human rights issues with the Cubans, pressed for improvements, been parties to resolutions in various international fora on the subject, and in many other ways worked for "a better human rights situation." They would continue to do so. They had not needed Helms-Burton to point them in the right direction.
Canada, he noted, had a consistent foreign policy. The United States did not. It was only in the Cuban case that the U.S. used economic isolation as an instrument. It gave Most Favored Nation treatment to China, had warm and friendly relations with Indonesia and various other countries that were no more democratic than was Cuba and that had worse human rights records. Indeed, he said, Cuba's record paled in comparison with Peru, with its 4,200 "disappeared people," and also with Colombia, Brazil, and probably Mexico.
"Selective Indignation," he concluded, should not be the basis of foreign policy. In Canada's case, it was not.
Mr. Smith noted that pressing for human rights improvements had been part of European and Canadian policies in Cuba long before Helms-Burton. The European common position adopted in December of 1996 simply formalized what had already been the policies of the member states. Further, he noted, if bringing about some liberalization in Cuba had been the objective of Helms-Burton, it clearly had not only failed but had had the opposite result. What we have seen in Cuba since its enactment is not liberalization but an internal crackdown. This was to be expected. As noted above, any time the U.S. pushes, the Cubans dig in. When the U.S. threatens (and a policy which aims at the ouster of the Castro government can only be seen by them as threatening), the Cuban government invariably demands greater internal discipline.
Can Helms-Burton Achieve its Larger Objectives?
Mr. Fisk argued that "the LIBERTAD Act had raised the stakes on Cuba," both by raising the pain threshold, in a moral sense, and financially for those who would economically engage with the Castro regime, and by setting back the agenda of those who seek to have the United States accept Castro's regime. And it had advanced four broad policy objectives: (1) halting the drift in U.S. policy; (2) stimulating the global isolation of the Castro regime; (3) complicating Castro's foreign investment schemes (and in so doing, protecting the property rights of American citizens who were victimized by Castro's property takings and elevating international attention to property rights); and (4) having the United States prepare for Cuba's democratic transition.
Mr. Ranneberger said the Administration had two overriding objectives in implementing the Helms-Burton Act. The first was to promote democratic transition by discouraging foreign investment. The second was to protect the property rights of U.S. citizens. He believed both efforts were right on track.
Mr. Smith, however, noted that if protecting property rights was an objective, there were better ways to achieve it. If we wanted compensation for those who were American citizens at the time they lost their properties back in the 60's, then we should negotiate for it, like every other country that had claims against Cuba had done. Cuba had consistently indicated its willingness to negotiate a compensation agreement with the U.S. The U.S. always sidestepped -- for reasons which Smith said he fully understood: achievement of a compensation agreement would be a long step toward normalization, a step the U.S. was unwilling to take. Still, to suggest that Helms-Burton was needed to protect our property rights was ludicrous.
What puzzled him most, however, was how proponents of the Act expected it to bring about the ouster of the Castro government without massive bloodshed. There was a complete disconnect in Helms-Burton between means and ends, he noted. The principal stated objective was to bring about a transitional government without Fidel Castro. His ouster, then, was the end sought by the Act. The means was by increasing economic pressure against the island. Yet, there was no way that some relative increase in economic distress could achieve that end. Castro was certainly not going to resign because of some drop-off in investments. How then was the objective to be achieved? Proponents of the Act could not tell us.
Assuming for a moment that Helms-Burton were having such devastating impact on the Cuban economy that it might lead to a 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 throughout the region. That should be the last outcome the U.S. would want. Fortunately, Helms-Burton was not working and therefore was not likely to produce such an outcome, for which we should all be grateful.
Further, Smith pointed out, were Cuba moving toward some kind of systemic crisis as the result of economic pressures exerted by Helms-Burton, could anyone seriously believe Castro would not 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 we do not want floods of Cuban boat people on our shores. Yet, with Helms-Burton, we were trying to create the very economic conditions which might cause them to take to the boats again. That might strike some as irrational.
Even more irrational, however, was to place at risk our critically important commercial relations with Canada, Europe, Mexico and several other states, over Cuba, a tiny island which in the post-Cold War world should not even be on the radar screens of U.S. foreign policy concerns.
Mr. Kirk said it was indeed difficult to understand the U.S. obsession with Cuba, a country that posed no security threat whatever to the United States. Its efforts to isolate Cuba were serving only to isolate the U.S. Surely it was time to admit that nine U.S. presidents have had it wrong and to drop these bullying tactics in favor of something else.
With a question from the floor, a member of the audience took issue with Mr. Smith's assertion that international pressure was counterproductive. Hadn't international pressure produced the desired results in South Africa, Chile and a number of other cases?
International pressure could indeed be effective, Smith confirmed, provided it were the kind of pressure being applied by the Canadians and the Europeans, i.e., that was respectful of Cuban sovereignty. It was precisely the kind of pressure applied by the U.S. that was counterproductive -- pressure which had as its objective the ouster of the Castro government and thus would be responded to defensively by Havana.
Smith noted, moreover, that in the cases of South Africa and Chile, the United States had never broken diplomatic relations, imposed a total trade embargo or refused discussions with those governments. Thus, if there was any inconsistency, it was in our Cuba policy, not in our earlier policies toward those other countries.
Panel II: Helms-Burton and International Law
Moderator - Willem van't Wout, Netherlands Trade Promotion Council
Panelists
Alberto J. Mora - Holland & Knight
Robert L. Muse - Muse and Associates
Gary Hufbauer - Institute for International Economics
Jeannette M.E. Tramhel - Secretariat for Legal Affairs, OAS
"Without any question, Helms-Burton does violate international law." -- Robert L. Muse
Does Helms-Burton Comply With International Law?
Mr. Mora maintained that Helms-Burton was consistent with international law. The expropriation of properties on the part of the Cuban government back in the 1960's violated Article 17 of the Universal Declaration of Human Rights which defined ownership of private property as a basic human right. Helms-Burton represented a legitimate response to that violation on Cuba's part. Indeed, there was a consensus in the making within the international community that the expropriation of private property without compensation violates international law. Within the next few decades, acts such as the Cuban expropriations would without question be seen in that context. Even now, common sense and precedent place them in that category. After all, theft and trafficking in stolen goods were universally regarded as crimes.
Further, while it was true that U.S. law forbids measures of an extraterritorial nature, the fact was that Helms-Burton did not pretend to have extraterritorial reach. Under its provisions, in order for foreign firms to be brought before U.S. courts under Title III, it would have to be established that they have sufficient contact so that the courts have jurisdiction. This might mean that few foreign companies could be brought before U.S. courts, but it also showed the clear intention to act within the law.
Cuban-Americans, Mora concluded, see this as a question of human rights. The rights of the Cuban property owners have been violated.
Mr. Muse, however, pointed out that the Universal Declaration of Human Rights was not a binding document and therefore cannot be the basis for deciding that a measure was in violation of international law. There was nothing in subsequent binding covenants (such as the convention on civic and political rights) that recognizes the right to own private property. Such arrangements were left to the sovereign decisions of each state. Hence, a government's expropriation of the property of its own citizens did not fall within the purview of international law. This was confirmed by the U.S. Supreme Court in the Palacio's case. For the U.S. government to advance the claims of those who were Cuban citizens at the time they lost their properties had no standing whatever under international law. On the contrary, it was a clear violation.
The original American property owners, i.e., those who were American citizens or incorporated companies at the time they lost their properties -- some of whom Mr. Muse represented --, by and large were opposed to the passage of Helms-Burton because they realized it was inconsistent with international law and would reduce the possibilities that they might be compensated for their losses.
And on the question of jurisdiction, it should not be forgotten that Helms-Burton opened the way to suits in U.S. courts not only against foreign companies but against the Cuban government itself.
Without any question, then, Helms-Burton did violate international law. We should be trying to strengthen rule of law in the international community. Rather than that, with Helms-Burton we were moving toward a form of unilateralism that was inconsistent with our real interests and values.
Finally, he noted, if Helms-Burton was about human rights, it had a limited view of whose rights should be respected. In order to advance a claim under Title III, Cuban-Americans must demonstrate that the lost property was valued at more than $50,000. In other words, this was a matter of human rights, but only for the relatively wealthy.
Jeannette Tramhel agreed that Helms-Burton violated international law. She explained that after analyzing a hypothetical law which would be the mirror image of Helms-Burton (in order to avoid pronouncing on the internal legislation of a member state), the Inter-American Juridical Committee (IAJC) had concluded unanimously that such legislation would not be in conformity with international law. Ms. Tramhel then began to outline the approach one might take to determine whether such a look-alike law met the criteria for legitimate countermeasures.
Mr. Hufbauer noted that in the past, the U.S. had been on both sides of the secondary-boycott issue, sometimes respecting them, sometimes saying they were illegal, and always convinced that it was right, even though its positions have been contradictory. Most recently, of course, the U.S. was highly offended by the Arab secondary boycott of U.S. firms that traded with Israel and in the 1970s it passed anti-boycott legislation -- legislation which in a sense was the precursor of the Canadian and European retaliatory legislation prompted by Helms-Burton. Offended though it was by the Arab boycott, however, the U.S., with Helms-Burton, had now come forward with a secondary boycott of its own.
A member of the public asked if Helms-Burton represented a departure from or dilution of the Act of State doctrine?
Mr. Muse said that it directly contradicted that doctrine -- a doctrine to which in the past the U.S. had always adhered. For that matter, he noted, it also violates that provision in the OAS Charter which forbids one member from using economic or political coercion against another in order to force a change in the other's internal system.
Panel III: The American business community: Helms-Burton and other sanctions legislation
Moderator - Dieter Dettke, Friedrich Ebert Foundation
Panelists
William Lane - Caterpillar Inc.
Toby Roth - Flippo, Roth, and Associates
Willard Workman - U.S. Chamber of Commerce
Marino Marcich - National Association of Manufacturers
T. Peter Blyth - Radisson Development Worldwide
"Perhaps the biggest cost of unilateral sanctions isn’t what they do, but what they allow policy-makers not to do. Even though unilateral sanctions don’t work and carry a high cost to U.S. workers, they do give the impression that the United States is "doing something." As a result, sanctions take the political heat off our policy-makers to take the tough actions needed to resolve the underlying problem." -- William Lane
Trend Towards Unilateral Sanctions
All of the panelists were in agreement that the missed opportunity to do business in Cuba was not currently a terribly costly one, but that the real issue was the growing use of unilateral sanctions that hurt U.S. business without affecting the foreign policy outcome. Mr. Lane asserted that the U.S. businesses were increasingly seen as unreliable suppliers because of these sanctions. When one signs a contract with a U.S. company, one wonders whether imposition of a sanction would prevent it from delivering. Mr. Marcich agreed, mentioning the stigma placed on U.S. companies due to the growing trend in the use of sanctions. This had already cut exports, he pointed out.
More than Lost Jobs
Mr. Lane suggested that when people examine the cost to businesses of embargoes, such as that against Cuba, they should go beyond the obvious. Certainly there was a loss to American firms in terms of revenue and market share caused by the loss of sales that ultimately leads to a loss of American jobs. But in addition to this loss, U.S. businesses were ceding important markets to competitors. This serves to make the American firms less competitive while making the foreign companies more competitive when they meet in other markets. Mr. Marcich agreed, noting that American businesses were perceived as political risks because of the growing use of unilateral embargoes. This, he said, induced foreign purchasers to buy non-U.S. products to assure themselves of the companies continued presence so as to offer product support. Mr. Workman added that the loss of jobs extended beyond the high-profile international companies to their sub-contractors.
Mr. Blyth added two ideas in terms of costs to American businesses. First, that American firms doing business in Europe were subject to retaliation because of the Helms-Burton Act and its treatment of European companies in Cuba. Second, he compared the business environment of the 1950’s, where alternatives to U.S. suppliers were not always available, to today’s business environment were competitors were ever present, making it harder for American companies to re-enter markets after being forced to leave.
Mr. Marcich agreed and noted that important business relationships could not be "turned on and off like a light switch", but must be built and preserved with care. All were in agreement that all of these costs were incurred by U.S. companies, while unilateral sanctions had little impact on the target governments.
Pressure to Act
Mr. Roth explained to the audience that as a member of Congress he had voted for the Helms-Burton Act out of the need to do something. The circumstances surrounding the shootdown on February 29th left members with no other political option but to react by voting for the legislation. He wished that Congress could be more proactive, rather than reactive. He acknowledged that unilateral sanctions were ineffective and cost U.S. jobs, but at the time the vote was taken on Helms-Burton there was a need to do something, short of sending in the army, to voice displeasure with the Castro regime. Other options needed to be presented to Congress.
Mr. Workman challenged Mr. Roth to "send in the businessmen rather than the army". Through their profit motive, they could work with the Cuban citizens in reforming their society. He contended that certain economic reforms, even if instituted to increase profits, would naturally induce the Cuban people to ask for other types of reform as well. Mr. Lane called unilateral sanctions dangerous. He said that they may satisfy the need for action, but they have not proven themselves as viable solutions to ending unacceptable behavior on the part of the offending country.
Growing Business Interest ?
Mr. Workman challenged the popular misconception that U.S. business was "chomping at the bit" to invest in Cuba. Cuba, he said, violated all of what he referred to as the "twelve commandments of investment". These commandments were standard criteria that an investor uses to judge the stability of a proposed investment. He gave as examples: Cuba’s lack of a rule of law, its lack of an independent judiciary, its peoples’ poverty, its miseducated workforce, and its lack of a free economic press. He made exception for the mineral extraction and entertainment industries, including hotels, due to their ability to recoup capital expenditures in a timely and irreversible manner. Mr. Blyth said the business community’s silence should not be taken as a sign of disinterest. Businesses may not be forthcoming with their development plans due to the competitive nature of their industries, but such plans did exist. He also stated that the best way to enter a developing market was at the beginning. Entering in the beginning of a market’s development not only offered an advantage over rivals, but also an opportunity to help shape the country’s economic evolution. He warned that it was now European and Latin American companies shaping reforms in Cuba as well as signing the contracts for development.
Panel IV: Coping With Helms-Burton
Moderator - Cynthia McClintock, George Washington University
Panelists
Matthew Horn - Institute for Entrepreneurship in Emerging Economies
Jean Anderson - Weil, Gotshal & Manges
Joy Olson - Latin American Working Group
"Helms-Burton opens a Constitutional Pandora's box." -- Matthew Horn.
How Best to Overcome Helms-Burton?
Mr. Horn noted that Helms-Burton violates so many U.S. laws and constitutional protections that if Title III were ever implemented, the whole Act would quickly be overturned in a flurry of court cases. But it was precisely because of that that the Administration was not likely to implement Title III and allow cases to be brought before the courts. Among other constitutional problems, Mr. Horn said, the Act violated the equal protection clause. Allowing those who were not citizens at the time they lost their properties to sue in U.S. courts over those properties lost in a third country violated all past U.S. precedents as well as international law. And in addition to that, that right could not be given to one group of naturalized citizens, the Cuban-Americans, and not to any others. If you give it to one, you must give it to all. Thus, there were now other ethnic groups -- Vietnamese-Americans, Chinese-Americans, and, most importantly, Palestinian-Americans, who were ready to file class action suits to demand that right should Title III ever be implemented . In the case of the Palestinian-Americans, they would demand the right to sue the government of Israel for properties lost on the West Bank and in Gaza, just as the Cuban-Americans have been given the right to sue the Cuban government over properties lost in Cuba. Of course, he noted, it seemed most unlikely that Title III would ever be implemented, hence these Palestinian-American class action suits would doubtless never be filed.
Jean Anderson disagreed that equal protection cases would result in overturning Helms-Burton, since U.S. courts did not require Congress to treat all countries identically. She noted that WTO and NAFTA cases may help build pressure against Helms-Burton, and that corporate actions (such as restructuring) may help some firms avoid liability. Because Helms-Burton was political, however, she thought the most effective -- though long-term -- action would be a broad-based campaign by business, foreign policy organizations and others to educate the Congress and the public to the statute's serious consequences for companies and for U.S. foreign policy.
Joy Olson noted that there was little political space for the Administration to act on changing Cuba policy this year. Congress was tired of the Cuba issue.
Those who want to tighten U.S. policy towards Cuba would have trouble in Congress because the new chair of the House Western Hemisphere Subcommittee does not share their views. Furthermore, there could be little enthusiasm in either body to repeat last year’s floor debate, Those who want to move toward normalized relations did not control Congress and would not get floor time for their issues.
Nonetheless, there were now several draft bills floating around aimed at lifting the embargo on the sale of foods and medicines and lifting travel controls. Congressman Jose Serrano alone was pushing five bills.
In the final analysis, however, none of these bills, not on the one side or the other, was likely to pass, and certainly not this year.
There was talk in the corridors of a strategy for repealing Helms-Burton, but that was for the future. For the moment, things were likely to remain on dead center.
Panel V: Reaction of U.S. Trading Partners to Helms-Burton (Part I)
Moderator - Wolf Grabendorff, IRELA
Panelists
Ana Covarrubias - El Colegio de Mexico
Hon Doug Lewis - Cuba-Canada Business Committee
Wilfried Richter - German Foreign Ministry
Peter Kittelmann - Member of the European Parliament
"...if you want to lead the band, you've got to come to practice." -- Doug Lewis
Ana Covarrubias noted that historically Mexico had opposed U.S. policies toward Cuba. She did not, however, equate this to support for the Cuban government. Indeed, Covarrubias said that Mexican diplomacy had distinguished between defense of principles and defense of the Cuban government. Overall, the Mexican government supported the principles of nonintervention and self-determination and rejected the extraterritorial application of the law and its unilateral imposition by the United States. She referred to the balance sought by the Mexican government between opposing the Helms-Burton Act and yet not defending Cuba. Attempting to distance itself from Castro, while standing for nonintervention in Cuba.
Not surprisingly then, the Mexican Congress, like its Canadian and European counterparts, was quick to pass retaliatory legislation which made it illegal for Mexican companies to adhere to Helms-Burton. The law had been implemented via the cooperation of the Ministry of Foreign Affairs and the Ministry of Trade and Industrial Promotion. It was too early to assess the impact of Helms-Burton on the determination of Mexican companies to invest in Cuba, she said. Grupo Domos had been singled out by the United States; Title IV of Helms-Burton was imposed against its executives some time ago. But the fact was that Domos was already having financial problems of its own completely unrelated to Cuba or to Helms-Burton. Whether it continued operations in Cuba would be determined far more by these other factors than by Helms-Burton.
Another Mexican company, CEMEX, had decided to pull out of its Cuban operations. Here again, however, this should not be taken as an indication of the attitude of other Mexican companies.
Covarrubias emphasized that Mexico believes Helms-Burton to be in violation of the NAFTA accords, and to violate also the rules of conduct overseen by the World Trade Organization. Mexico may indeed take the United States to the NAFTA dispute resolution panel. It would prefer, however, to resolve the problem through bilateral agreements and diplomacy. Mexico, she stressed supports the expansion of free trade. Helms-Burton impeded such a process. Another reason Mexico so strongly opposes the measure.
This does not mean, Covarrubias said, that this dispute with the United States had had major consequences in Mexican-U.S. relations. She stressed that the dispute had remained isolated in more broad cordial relations. Furthermore she said that the dispute was not exclusively between the United States and Mexico. Protest had come from a variety of U.S. trading partners. Thus making it politically safer for Mexico to continue its dispute. Ambassador Eizenstat placed limits to this protest when he warned that, "invoking NAFTA would not be very wise since the treaty was not concerned with political issues.
The Honorable Doug Lewis began by stressing Canada's close friendship and economic relations with the United States. These historical ties have in the past led the two allies to work closely together toward many common international goals, such as the creation of NAFTA and of the WTO.
The passage of Helms-Burton, however, in the view of Canadian business, placed all that in jeopardy and began to reverse all the work to expand free trade. Thus, Helms-Burton was, at best, "a contradictory signal with global implications."
Canada, Lewis believed, was attempting to play a positive and dynamic role with respect to present day Cuba through the development of economic relations and the pursuit of its own independent foreign policy. There was a unique opportunity now to do business and to influence the outcome there. It was a wide open situation with lots of possibilities. Most of these at the moment were in joint ventures with Cuban entities, but in the near future the way was likely to be opened for small and medium enterprises on the island. That would open important new areas in which Canadian business people were very interested in playing a part.
Lewis noted that the Clinton Administration was calling on its allies to form a common front toward Cuba, but the fact was that most of them already had a common policy, or front. The problem was, he pointed out, that "...if you want to lead the band, you've got to come to practice." The others were in sync. Their front was one of engagement. Only the U.S. does not positively engage with Cuba. Therefore, there was no way it could lead the band.
Of necessity, U.S. policy toward Cuba would eventually change, Lewis predicted. He noted, however, that it might take time, for "politicians that are not fond of admitting defeat." In the world of today, he concluded, it was important to lead by example, not by the stick.
Wilfried Richter expressed his full support for the position taken earlier by Ambassador Paemen. The EU, he went on, was united in its support for expanding free trade. Helms-Burton runs counter to that. It obstructs the movement of goods and capital. It impedes free trade. This was one of the reasons the Europeans so strongly opposed it. It was good that President Clinton had again postponed implementation of Title III of Helms-Burton, but it was certainly not enough to satisfy Europe. The fact was that postponed or not, the law, including Title III, was still on the books. The only real solution was to repeal it.
This, Richter said, was a difference of opinion over tactics, not over objectives. Germany also wants to see Cuba move toward a more open political system, with respect for the civil rights of its people. It strongly disagreed, however, that economic pressure and efforts at isolation were the best way to encourage such movement. On the contrary, it believed that U.S. policy was counterproductive. The European Union had a common position: one of expanding dialogue with Cuba. At the same time, negotiations on a full economic cooperation agreement could not begin until there was some change in Cuba. Richter concluded by predicting that European policy would help bring change to Cuba. U.S. policy would not.
Panel VI: Reaction of U.S. Trading Partners to Helms-Burton (Part 2)
Moderator - Wolf Grabendorff, IRELA
Panelists
John Godfrey - Member of Parliament, Canada
Peter Milliken - Member of Parliament, Canada
Eric Hayes - U.S. Relations, European Commission
Sweder van Voorst - Western Hemisphere Department, Dutch Foreign Ministry
Scott Armstrong - The Information Trust, Washington, D.C.
Commentators
Fernando de Galainena - Spanish Ministry of Foreign Affairs
Hernan de Jesus Ruiz Bravo - Mexican Foreign Ministry
Bert Hoffman - Institute for Iberoamerican Studies, Hamburg
"Ambassador Eizenstat would have us believe the European common position was in response to Helms-Burton, but this was absolutely not the case." -- Sweder van Voorst
Specific European Responses
Mr. Hayes emphasized that Europe's objection was to the extraterritorial provisions of Helms-Burton, not to U.S. policy toward Cuba as a whole, or even to the U.S. embargo. Those matters were the business of the United States -- and of Cuba. U.S. efforts to apply its law beyond its own borders was something else again. Here Europe had no choice but to object and respond.
Its response had been on four main tracks:
A) The first had been in the World Trade Organization (WTO). As the European Union saw it, the United States had violated the rules of conduct. Accordingly, the Europeans in October requested, in accordance with the WTO's usual dispute resolution procedures, that a panel be formed to consider the matter and reach a judgment. The United States had objected that this was not a trade dispute but a matter of U.S. national security. Mr. Hayes noted that while it was conceivable that there might be some security issues between the United States and Cuba, there were certainly none between the United States and Europe. On the contrary, most of the European states were NATO allies of the U.S. How then could the U.S. claim that this dispute with the Europeans was a matter of its national security. The Europeans rejected the argument and would press ahead for the constitution of the settlement panel. When one violated the established rules, one had to expect to be called to account.
B) The Europeans were considering a retaliatory measure that would in effect mirror Title IV of Helms-Burton, under which the executives of companies supposedly guilty of "trafficking" in nationalized U.S. properties were denied entry into the United States. The European provision would in turn deny entry to the executives of U.S. firms that brought suit against European firms.
C) The European Union had approved retaliatory, or "blocking," legislation in response to Helms-Burton. This forbids European companies from complying with Helms-Burton, even to the point of barring them from providing information to U.S. courts. It also provides for counter suits in European courts against any U.S. entity that sues a European company in a U.S. court. Hence, even if a U.S. company won a judgment in a U.S. court under Title III of the Act, that company would lose an equal amount in the counter suit. Further, that company's assets would be exposed in any European country, no matter what the nationality of the European company originally sued. Say a Danish company had been sued but the U.S. company only had assets in Great Britain. Under the legislation approved in October of 1996, the Danish company could go after those assets.
D) Finally, the Europeans were drawing up a watch list of U.S. companies that indicate an intention to file suit or that actually file. Information on those companies, and especially as regarded their assets, was being compiled for use in future counter suits.
The Common Position is not a Response to Helms-Burton
Mr. van Voorst pointed out that the European Union had for some time been pushing the Cubans on the issue of human rights. Indeed, it was doing so before there was any Helms-Burton bill. There was nothing new in the common position adopted by the European Union in December. It simply formalized what had already long been their position. Mr. van Voorst noted that Ambassador Eizenstat would have us believe the European common position was in response to Helms-Burton. "But," he emphasized, "this was absolutely not the case."
Mr. van Voorst acknowledged that Cuba was a dictatorship. Europe would like to see it move toward a more open society, freeing political prisoners and reforming the courts as it goes. But Europe's position was that this could best be encouraged not by coercive measures but through a dialogue with the Cuban government and people. In this, it obviously differs markedly with the U.S. approach.
More on the Canadian Response
Messrs. Milliken and Godfrey described the legislation they have presented to the Canadian Parliament in response to Helms-Burton. Both were descendants of American Tories who went to Canada after the American Revolution. Their families' properties were seized by the new government. Under the Treaty of Paris of 1783, the U.S. had agreed to return those properties or pay some compensation for them. In fact, however, the matter was never fully resolved. Thus, there were now about three million Canadian Tory descendants with potential property claims against the United States running over six trillion dollars. Now, since the Helms-Burton Act gives Cuban-Americans the right to sue in U.S. courts over properties they lost in Cuba years ago and before they became American citizens, one could see the parallels. If the U.S. believes those Cuban-Americans could use U.S. courts to assert their claims, then it stands to reason that these three million Tory descendants, Milliken and Godfrey included, should be able to assert their claims through Canadian courts. "My family owned a really swell house near Williamsburg," Mr. Godfrey declared, "and I'd like to have it back."
Mr. Milliken noted that their legislation was far more democratic than the Helms-Burton Act in that it allows any Canadian with a claim to sue, no matter how small the claim. Helms-Burton, on the other hand, only looks at claims above $50,000.
Mr. Godfrey described the Helms-Burton Act as part of a "waltz of the dinosaurs: Helms and Castro" and said he and Milliken had put the bill forward to illustrate just how absurd and hypocritical the Act really was.
Commentary
Commenting on the remarks and analysis of the speakers in panels V and VI, Mr. Armstrong noted that the Clinton Administration had counted on a relatively weak European response, and so far it had been at least partially right. The retaliatory legislation passed by the European Union was useful, as was the complaint filed against the United States in the WTO, but there were other fora in which action could be initiated and there were more forceful counter measures available. He wondered why they hadn't been utilized. He also thought it a mistake for the Europeans to limit their attacks against Helms-Burton to the trade issue. It was the totality of the Act that was unacceptable and that should be emphasized.
Helms-Burton had been approved by the U.S. Congress, he explained, because the latter was badly informed and lacked support for any alternative. As for the Administration, it had not been seriously lobbied nor educated on the issue; it simply reacted to its instincts as to what was in its domestic political interests. So far, it had had no reason to change its mind. This being the case, we were probably stuck with Helms-Burton and with present U.S. policy toward Cuba for the foreseeable future. There were, however, a number of scenarios that might change that:
A) Castro's death would probably open up possibilities of change, though what kind of change was an open question.
B) That Helms-Burton created enough of an economic crisis (though this seemed unlikely) to spur another wave of rafter refugees and provoke a crisis response from the Administration, probably along the lines we have seen before, i.e., a bilateral agreement to staunch the flow.
C) That a constituency emerges in the U.S. to demand a change of policy -- a constituency, in other words, to balance the influence of the right-wing Cuban exiles. At the moment there was no such constituency -- not among the business community, not within the foreign policy establishment, nor anywhere else. Under present circumstances, the Cuban issue does not directly affect enough people for there to be one.
D) Or, another possibility would be that Helms-Burton causes the U.S. so much pain and embarrassment that it becomes an acute public relations problem for the Administration. It was within this context that raising the issue in international fora and taking action such as that now launched against the U.S. in the WTO was so useful. Bring enough international pressure to bear in the right way and you may begin to change the equation -- but so far, not nearly enough had been exerted.
Mr. Armstrong agreed with previous speakers who had said the implications of Helms-Burton go far beyond Cuba, or even U.S.-Cuban relations. This may indeed be something of an historical turning point. Helms-Burton turns us away from an international system based on rule of law and points us toward models out of the past in which one dominant power ignored the rules of the game and simply bullied other states to do its bidding.
Comments
Fernando de Galainena congratulated speakers in the previous two panels for their excellent presentations. He could only add, on the subject of compensation for nationalized properties, that Spain had had the second largest claims against Cuba -- after only the United States -- and yet had reached a compensation agreement satisfactory to both sides. By and large, Cuba had made its payments regularly. Such problems, in other words, could be resolved.
Hernan de Jesus Ruiz said he agreed with and associated himself with the remarks made by his countrywoman, Ana Covarrubias. The attitude behind Mexico's blocking legislation was clear and firm and essentially was a matter of saying, "if you file a lawsuit against me, then I'll file one against you."
Bert Hoffman said it was unfortunate that the property issue was now clearly the central driving force behind U.S. policy, rather than human rights or democratization. Property issues were always complicated and the most difficult to solve. Title III would create major problems for many years to come.
Panel VII: Is an open society in Cuba advanced by a policy of isolation?
Moderator - Robert White - The Center For International Policy
Panelists
Gillian Gunn Clissold - Caribbean Project, Georgetown University
Gaddis Smith - Yale University
Susan Kaufman Purcell - Americas Society
David Thomas - Former British undersecretary for the Americas
"The Answer to the Question before us: ‘Is an open society in Cuba advanced by a policy of isolation?’, quite obviously is no." –David Thomas
Transition to Democracy
David Thomas noted that a transition to democracy in Cuba was most likely to be peaceful if the present regime initiates the process. He said that just as the revolution was home grown, so too should be its transformation. This, he said, requires that outside powers follow a policy of constructive engagement rather than isolation.
Mr. Thomas also pointed out that the Helms-Burton Bill was entirely silent on how the actual transition would come to Cuba or how Helms-Burton would produce the fall of the current regime. Gaddis Smith agreed, adding that Helms-Burton offers no inducement to Castro to move toward democracy and allows no place for the Castro brothers in a transitional Cuban government.
Gillian Gunn Clissold added that Cuba’s configuration during and after transition must be up to the Cuban people to decided, even if that decision included the current regime.
David Thomas and Gaddis Smith described the Helms-Burton Bill as both intrusive and subjective. The bill does offer a "well behaved" transitional government (i.e. one without Castro) a suspension of the embargo and a return of the Guantanamo naval base. But, as Helms-Burton was written, does it address the responsibility and, more importantly, the ability of a transition government to compensate individuals and entities with outstanding property claims? The question persists: if a transition government does not have the ability to compensate, how would that affect a normalization process between the United States and Cuba? The bill further discusses the role of the Cuban military and offers U.S. aid in helping its transition to an appropriate democratic role. Gaddis Smith wondered what form such aid would take.
Track Two
Susan Kaufman Purcell said that the point of the Track Two initiative, as laid out in the Torricelli Bill, was to establish and maintain contact with groups in Cuba so as to undermine the Castro dictatorship. She wondered why the practice was used without dispute in Eastern Europe and other parts of the world, while it was objectionable to some participants in the case of Cuba. David Thomas replied that one reason was that the tactic had been implicit in Eastern Europe, while in the case of Cuba, the Clinton Administration loudly stated that its objective was to undermine the existing governments through academic exchanges and cultural contacts, thus turning those legitimate activities into subversive ones in the eyes of the Cuban government.
Gillian Gunn Clissold wished it were possible to separate the two types of contacts that were being classified as track two: those meant to establish contact with dissidents and counter-revolutionary groups within Cuba, and the others intended solely as academic exchanges. Raul Castro’s March 23, 1996 speech made it clear that after the passage of the Helms-Burton Bill, many in the second, the academic category, would suffer because of reaction to those in the first category.
Political Space
Gaddis Smith said that while he does not fear an outright reimposition of the Platt Amendment, the provisions of the Helms-Burton Bill were incompatible with Cuban self-determination. He said that despite the bill, however, there was movement toward an open society in Cuba. At the same time Helms-Burton continues to isolate the U.S. and obstruct U.S./Cuba relations.
Gillian Gunn Clissold believed that internal pressure for economic reform would be stronger if the U.S. pressure were less. If Cuba did not have to adopt such a siege mentality, it would be more willing to experiment with reform. Gaddis Smith stated that Helms-Burton legitimizes a closed society in Cuba by solidifying an external political enemy for the Castro regime.
Susan Kaufman Purcell questioned whether we knew what the Cuban people wanted because they had not been given the right to express their opinions, either through public opinion polls or through elections. She suggested that all involved should suspend judgment until they were given such an opportunity.
Economic Pressure
Susan Kaufman Purcell pointed out that any amount of recent economic growth in Cuba was relative to the low level to which it had fallen due to its loss of Soviet aid. She went on to say that the self-employed Cubans played an insignificant role in the Cuban economy because Cuba does not allow its own citizens to invest in the economy.
Davis Thomas believed that at the least, however, the effect of the private sector was to mop-up the excess liquidity present in Cuba. Furthermore, he said that the private sector was one of the most important elements in continued economic, and therefore political and social, reform. Gillian Gunn Clissold agreed with Mr. Thomas and pointed out that the government statistics coming out of Cuba were becoming more reliable. She believed this was due to a realization among the Cubans that international business demanded statistics that mirror reality. She stated that she thought there would be a "topping out" of economic recovery without any genuine opening to the private sector.
Isolation
David Thomas, Gaddis Smith, and Gillian Gunn Clissold agreed that the U.S. embargo in general, and the Helms Burton Law specifically, were in direct contradiction to the desired objective of encouraging reforms in Cuba. As Gillian Gunn Clissold put it, "Not only does isolation fail to enhance an open society, but policies designed to isolate Cuba inherently sabotage policies designed to enhance openness." She reached this conclusion following her discussion of the backlash of the Castro government against track two because of the passage of the Helms-Burton Bill. David Thomas and Gaddis Smith pointed out that a transition was most likely to be peaceful if the present regime initiates the process. They then pointed out that the Helms-Burton Bill made this impossible because it left no room in Cuba’s transitional government for Castro. Susan Kaufman Purcell disagreed, stating that the embargo denied Cuba easy access to the hard currency needed to run the economy, forcing Castro to make economic reforms he did not really want to implement.
Wayne Smith ---
After thanking all of the panelists and all who helped organize the conference, Mr. Smith emphasized that while the organizers had worked very hard to put together a balanced conference, they were not neutral. They had examined the Helms-Burton Act and found it to be mistaken and counter-productive.
Along those lines he stated that there appeared to be a total disconnect between the means and the ends. Helms-Burton was supposed to increase economic distress in Cuba, and that in turn was to lead to a transitional government without Fidel Castro. He pointed out that the U.S. wants a peaceful transition process, but in Helms-Burton defines that as a process without Fidel. Smith questioned how more economic distress would bring about the desired change. Was Castro expected dutifully to resign?
If economic pressure ultimately led to an explosion of resentment against the current government, such an upheaval would lead to civil war and consequently to mass migration to the United States. He deemed this inconsistent with the objectives of the 1995 refugee agreement which makes it clear that the U.S. does not want refugees on its shores. Helms-Burton, then, was inconsistent with the most basic U.S. objectives.
Mr. Smith noted that the United States explains the inconsistency of trading with China, Indonesia, Vietnam, and various other countries that were no more democratic than Cuba and that have worse human rights records while at the same time refuses to trade with Cuba on grounds that pragmatic reasons dictate different policies for different countries. Ambassador Eizenstat, for example, suggested that there were one billion reasons why we trade with China. In other words, it had a huge market. But on the other hand, the United States then demands that its allies stop trading with Cuba as a matter of principle. Apparently pragmatic considerations were okay for the United States but not for its allies.
Rather than being concerned with the effects of Helms-Burton on Cuba, Mr. Smith said he was principally concerned with its implications for the international system. Many had hoped that in the wake of the Cold War, we would be able to fashion an international system based on rule of law - and many Americans had hoped the United States would lead that effort. Helms- Burton, however, carries us on the other direction. It blatantly violates international law and treaties and in effect suggests that the United States was turning toward unilateralism. This he found most disturbing.
Dean Browne
Like Wayne Smith, Dean Browne thanked the organizers and panelist of the conference.
Mr. Browne was surprised at the view of Dan Fisk that the bill had worked in that it had got the attention of the international community and managed to modify the behavior of the allies towards Cuba. It appeared that Ambassador Eizenstat feels the same way. He pointed out that this was not the stated or formal goal of the bill. It was odd to measure the success of any piece of legislation by the attention it had gained.
Along the lines of coping with Helms-Burton, he said he had heard arguments for getting the law into court, arguments for corporate restructuring to avoid its impact, and arguments for a long-term strategy of education that would eventually lead to the bills repeal.
Mr. Browne said that there seemed to be much disagreement on the legality of the Helms-Burton Bill within the U.S. and the international community. He suggested that perhaps the Supreme Court might have to resolve the issues of whether the law was constitutional or would stand up to international law.
Mr. Browne also wondered at the passive reaction of the business panel toward the Helms-Burton Bill and the use of unilateral sanctions. It seemed that they were willing to take such things as given after they were passed. It seemed like a very passive reaction among such an influential sector. They obviously had much to lose in the loss of the Cuban market, even if it were relatively small. Why were they not more willing to fight for the right to enter this market and other markets where the circumstances were the same?
Wolf Grabendorff
After thanking all of those involved with the conference Mr. Grabendorff also referred to the broader implications of the Helms-Burton Act. Like Mr. Smith , Mr. Grabendorff believed that the real issue to be examined was not simply whether it could achieve its objectives but rather how the law affected the international system. The law was unacceptable, Mr. Grabendorff said, because of its extra-territoriality. It violated the sovereignty of other nations and violated the rights of their citizens to make trade decisions for themselves.
Despite this fact, it was not the potential loss of trade that worried Mr. Grabbendorff. Instead, it was the fact that so early after in its inception the WTO would be called upon to settle a dispute that could seriously affect its credibility as an international organization.
He wondered, in the presence of other policy alternatives for dealing with Cuba, why the American government had chosen to go down a path that endangered the health of an organization that it had utilized well in other instances to encourage free trade. Certainly it was advantageous to the United States for the WTO to exercise some international authority with respect to trade.
Mr. Grabendorff went on to dismiss the idea that Cuba was a legitimate national security threat and therefore the issue remained a trade dispute over an issue of foreign policy.