BY ARGIRIS MALAPANIS
On January 3, U.S. president William Clinton announced a second six-month postponement of a provision in the misnamed "Cuban Liberty and Democratic Solidarity Act of 1996," also referred to as the Helms-Burton law. The provision allows Cuban-American and other U.S. businessmen whose property was expropriated by workers and peasants after the 1959 revolution in Cuba to sue in U.S. courts anyone investing in those properties.

The legislation, signed into law by Clinton March 12, 1996, substantially escalated Washington's economic war on the Cuban people. The Clinton administration's aggressive use of the law since then has already had an initial adverse impact on the Caribbean nation's economy, slowing down foreign investment and credits to Cuba.

The Helms-Burton law also registered an intensifying trade offensive by the U.S. rulers against their imperialist allies, who are also competitors, especially in Europe and Canada.

The White House decision reflects some gains Washington has made on both fronts: tightening the economic squeeze on the Cuban revolution and simultaneously defusing a confrontation with capitalist powers in Europe over aspects of the legislation, to the advantage of the U.S. government.

Defusing complaints by U.S. allies
"We must sustain our efforts to hasten the arrival of democracy in Cuba," Clinton said in a statement issued by the White House January 3, as he vacationed in the Virgin Islands. "As a result of increasing international pressure, we have never been closer to that day."

"Today we can genuinely say that it is the Cuban regime that is increasingly isolated in the Western Hemisphere and around the world, not the United States," Stuart Eizenstat, U.S. undersecretary of commerce, was quoted by the Wall Street Journal as saying the same day.

Officials of the Democratic administration and the U.S. big-business press pointed to the passage of a resolution by the European Union (EU) on December 2, which assailed the revolutionary government in Havana for alleged human rights violations and lack of democracy, as a gain for Washington.

"The European Union strongly believes that a democratic system of government must be installed in Cuba as a matter of priority," stated the EU resolution. While it proclaimed willingness by the 15 EU member states to continue some trade and investments in Cuba, the statement said "full cooperation with Cuba will depend on improvements in human rights and political freedoms."

The White House had earlier indicated that some action like the passage of the December resolution would be necessary for the U.S. president to renew the waiver halting the filing of suits against companies in third countries investing in Cuba. This provision of the Helms- Burton law had provoked angry protests by governments in the European Union and Canada as an "extraterritorial reach" of U.S. legislation and an infringement by Washington on the rights of these capitalist powers to trade with whomever they choose.

Soon after the passage of Helms-Burton, the European Union passed a resolution condemning the legislation. "It is particularly unacceptable that a third country would tell us how to conduct our trade," stated Jean-Pierre Leng of the EU at the time. Subsequently, the EU passed retaliatory measures against Washington, including countersuits in European courts against U.S. citizens taking legal action under Helms-Burton. The EU also filed a complaint against implementation of aspects of the U.S. legislation with the World Trade Organization (WTO).

The Canadian and Mexican parliaments passed their own legislation that will supposedly shield corporations in these countries from sanctions under Helms-Burton.

To defuse the outcry, Clinton announced July 16 a moratorium on filing lawsuits against companies in third countries, allowed under Title III of the "Cuban Liberty" act. The U.S. president also made it clear at the time Washington would not budge under pressure by its competitors. "I must do what I think is in the national interests of the United States and what is likely to bring democracy to Cuba," he said in a July interview.

A White House statement issued at the time exhorted U.S. allies, "Join us now in the effort to confine Cuban communism to the trash bin of history where it belongs. Join us in bringing the kind of pressure to bear on [Cuban president] Fidel Castro and on that system that will bring about market economics."

The Clinton administration then dispatched Eizenstat to Europe to push for a political campaign of condemnation of Havana, which in and of itself would discourage foreign investment and take the focus off the condemnation of Helms- Burton.

As soon as the European Union passed the December resolution Washington welcomed the move.

An editorial in the December 16 Wall Street Journal said the EU statement "takes some of the edge off of the EU's bitter dispute with the U.S. over the Helms-Burton act."

The editors of the financial daily described the move as a shift in favor of Washington. "To appreciate the shift here, you also have to consider the state of affairs a little over a year back," the editorial said. "Recall, for example, how during his first visit to France Mr. Castro was greeted with trumpets and drums and feted at the Elysee in March 1995.... Then Spain assumed the EU's rotating presidency in July, amid a promise by then-Prime Minister Felipe Gonzalez [of the Socialist Party] that `strengthened relations' with Cuba would be high on the agenda."

Now the new conservative government of Spain has begun leading the chorus of political attacks on Havana, the Journal editors said.

When he made the January 3 announcement, Clinton indicated the waivers of Title III may continue under Washington's terms. "I would expect to continue suspending the right to file suit so long as America's friends and allies continue their stepped-up efforts to promote a transition to democracy," he stated.

Interimperialist rivalry lingers on
EU officials worked hard to give the impression that their December statement was not a concession to Washington. "It's an expression of EU policy," said a spokesman for Irish foreign minister and EU president Richard Spring. The resolution doesn't include any changes to that policy, he said.

Following Clinton's announcement of a second extension of the waiver on Title III, European Union representatives said they welcomed the decision but expressed their displeasure that Washington continues to hold the possibility of sanctions as a threat.

Hugo Paeman, EU ambassador in Washington, called Clinton's waiver "a step in the right direction." With the same breath, however, he expressed his dissatisfaction with the "extraterritorial reach of the law itself. We note that today's decision does not guard against a potential future application" of the measure.

Paeman also noted that a separate provision of the law, barring executives, shareholders, and principals with a controlling interest in companies that "traffic" in confiscated properties in Cuba from getting U.S. visas, remains in effect and applies to corporations in Europe and elsewhere. So far, Washington has applied this provision twice. It has banned from the United States top officials and their family members from the Canadian-owned Sheritt International mining company and the Mexican telecommunications conglomerate Grupo Domos.

Eizenstat said the Clinton administration will continue to enforce this provision vigorously. The first week of January, Eizenstat stated, an Israeli company identified as BM Group, a sugar and citrus processor, was warned its executives may be sanctioned under this section of the Helms-Burton act. Another 12 companies are under investigation.

Eizenstat also said Washington has "rejected all the EU's claims" in the European Union WTO complaint. "We believe that this is not fundamentally a trade dispute," Eizenstat said. "It is a political and policy dispute and the WTO is an inappropriate vehicle." The U.S. government insists its legislation is consistent with the world trade organization's rules. The Clinton administration spent a lot of time working on the language of the bill before its passage to make it extremely difficult for its competitors to make such a legal case stick.

The Canadian government was more blunt than EU officials about its disagreement with its neighbor to the south. Arthur Eggleton, Ottawa's international trade minister, accused Washington of "continuing to hold this sword over the heads of other countries," following Clinton's January 3 announcement.

"I think [Clinton's] decision is disappointing," Eggleton stated. "It continues to be unacceptable behavior by the United States in foisting its foreign policy onto Canada and other countries, threatening Canadian business, threatening anyone who wants to do legal business with Cuba."

In a report to a conference held in Sitges, Spain, in July 1996, president of Cuba Business Gareth Jenkins had already outlined how Washington would use the embargo- tightening legislation to accomplish its objectives. Cuba Business is a monthly published in London that focuses on reporting foreign investment and other economic developments in Cuba.

"The sponsors of H-B [Helms-Burton law] have been candid about their objective," Jenkins said. "They aim to overthrow the government of Fidel Castro first by economic means, and should that not succeed, through military invasion. In the process they are prepared to trample on the legitimate interests of non US companies and governments in Cuba, not to mention those of Cuban citizens themselves."

He continued, "The vague and confusing nature of H-B is not an obstacle to this objective. In fact this contributes to its effectiveness through creating a climate of uncertainty which is causing companies to think twice before doing business in Cuba. President Clinton's postponement of the right to file suits under Title III perhaps even enhances this uncertainty.... The Cuban government is probably not exaggerating when it describes H- B as annexationist."

In his report Jenkins documented how foreign investment in Cuba had already become more costly last summer as a result of the threatened sanctions under the U.S. law. Companies that invest in Cuba, for example, usually buy insurance to protect their capital from possible nationalization. Lloyds of London, which provides such insurance, is now requesting that investments in the Caribbean island do not involve "trafficking in stolen property."

"Since even with full due diligence it appears impossible for most companies to know with complete certainty whether they are in breach," Jenkins said, "this effectively throws the political risk associated with H-B onto the investor."

Adverse impact on Cuban economy
Media reports said earlier that two large banks - the Dutch bank ING and Spain's Banco Bilbao Vizcaya - have discontinued contracts to finance credits for the sugar cane harvest in five Cuban provinces. In addition, two European companies that sell Cuban sugar stopped doing business with Havana.

Sugar is Cuba's top export crop and one of the country's main sources of hard currency, which is now badly needed for imports since the Caribbean nation lost trade in favorable terms with the Soviet Union and Easter Europe.

Nelson Torres, the Cuban sugar minister, said in December that these financial institutions have not backed out, they have simply restructured their loans to circumvent Helms-Burton. Torres said that his government had secured loans needed to buy 1997 harvest imports, like fertilizer, of about $300 million, the same as in 1996 and $30 million short of this year's goal. Torres also indicated that the Helms-Burton law meant some new lenders had to be found, causing delays in some imported supplies.

An article in the December 19 Miami Herald states that as a result Havana has to pay higher interest rates, which now reach up to 20 percent.

Next year will be "complex and tough," Carlos Lage, vice president of Cuba's Council of Ministers, told a meeting of Cuban enterprise directors in mid-December. "This is going to create very large tensions for us from the first days of the year."

Presenting the 1997 budget and economic plan to Cuba's National Assembly at the end of December, Minister of the Economy José Luis Rodríguez, said the country's Gross Domestic Product (GDP) grew 7.8 percent in 1996. This builds on previous GDP increases of 0.7 percent in 1994 and 2.7 percent in 1995. Nickel exports hit a record 55,000 tons in 1996 and costs of sugar cane production are expected to be lower this year.

Rodríguez stated at the same time that this growth rate is expected to slow down this year, because of pressures from international financial institutions. He put the GDP growth forecast for 1997 at 4-5 percent.

The gyrations of the capitalist market adversely affect the Cuban economy, Rodríguez pointed out. Although Cuba's exports grew by 33 percent in 1996, he said, imports increased by the same amount, more than double the forecast and further widening the country's trade deficit estimated $1.2 billion in 1995.

World market prices for sugar and nickel, Cuba's main exports, are lower than last year. Sugar's drop from roughly 12 cents per pound during the 1996 harvest to less than 11 cents today may wipe out the effect of any increase in the sugar harvest this year. Cuban government officials say the goal for the 1997 harvest is slightly higher than the 4.45 million tons reached last year.

Oil prices in the world market also rose from about $17 per barrel in November 1995 to about $23 a year later. Cuba imports most of its fuel at a annual cost now estimated at $1.12 billion.

Rodríguez said such rising prices in the world capitalist market already added an extra $226 million to Cuba's oil and food import bill last year. The country's foreign debt in the meantime has grown from $9.7 billion in 1994 to $11 billion in mid-1996.

Response of Cuban government
The solution to Cuba's financial problems, Lage said in December, "must be found within our economy, not in one shot or in one year. We must... create conditions to begin progressively diminishing it."

In 1996, a major mobilization by broad sections of the Cuban working class succeeded in reversing the decline in the country's sugar harvest, leading to an increase of 30 percent over the previous year. This change in direction, which was extensively discussed at the 17th congress of the Central Organization of Cuban Workers (CTC) last spring, also registered forward motion in the morale and management role of hundreds of thousands of Cuban workers and farmers.

The leadership of the Cuban Communist Party and the government are working to build on that accomplishment within the adverse international conditions expected for this year.

The Cuban government also launched a political counterattack against the Helms-Burton legislation. The December meeting of the National Assembly adopted the Law of Reaffirmation of Cuban Dignity and Sovereignty.

The government was given broad mandates, including the transfer of interests and investment funds, in an effort to shield foreign investors from threatened sanctions under U.S. legislation by restructuring operations.

The Cuban law also declared "null and void" any claims made under Helms-Burton. It also declared the right of the Cuban government and the country's citizens to claim compensation for damages caused by the 37-year-old U.S. policy of a trade and economic embargo.

The Cuban government estimates that the Washington's economic war has cost the country damages of some $40 billion. Potential claimants include victims of acts of violence and sabotage in Cuba carried out by counterrevolutionaries and orchestrated by Washington.

Such claims for compensation could be made to special commissions that will be created by Cuba's Justice Ministry.

Cubans will also be able to present claims for damage and losses, according to the draft text of the document, "caused by thieves, swindlers, corrupt politicians, mafiosi, torturers and killers of the Batista tyranny [overthrown in 1959], for whose actions the U.S. government has made itself responsible by promulgating the Helms- Burton law."  
 
 
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