TESTIMONY OF

ROBERT G. TORRICELLI

before the

SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY
AND TRADE

"The WTO and Helms Burton"

March 19, 1997

MR. TORRICELLI. Madam Chairman, it is a great pleasure to have the opportunity to speak with you about the Cuban Liberty and Democracy Act (Libertad) and planned protest by the European Union to the World Trade Organization against this act of Congress. I have had the honor of working with you and other distinguished representatives of the Cuban American community over the last seven years to tighten the economic embargo against Cuba and to promote a democratic transition in Cuba.

Our efforts began with the Cuban Democracy Act in 1992. and continued last year in the signing by President Clinton of the Libertad bill. When Congress addressed the issue of membership in the World Trade Organization (WTO) and voted its approval, many of us had concerns about the possible infringement of this international body on the sovereign right of the United States to design and conduct its foreign policy. We voiced objections then that if the WTO became a vehicle to attempt to overturn U.S. foreign policy, we would reconsider our involvement. We were concerned that our support for international trade could become a backdoor means for undermining U.S. sovereignty. It now appears as if those fears may be realized.

Unfortunately, the decision by the European Union to press its disagreement with our foreign policy toward Cuba in trade forums has the potential to call into question that commitment to free trade. Specifically, the WTO agreement is expressly limited to "investment measures related to trade in goods only." None of the WTO agreements directly addresses the question of governmental expropriation or of confiscation of property, or "trafficking" in such property, or contains obligations directly related to such activities. Thus, to find that Title III of the Libertad act is in violation of a WTO agreement, it would seem that the EU is maintaining that it affects trade in goods by a WTO member.

I applaud the Administration for making the most important point. "the WTO was established to manage trade relations between member organizations--not diplomatic or security relations that may have incidental trade or investment effects." The Administration in doing the right thing in using its national security safeguard to deny the authority of the WTO panel, and in pursuing a negotiated solution with our European allies.

It is obvious that the Libertad Act has trade effects, and it is undeniable that its purpose is diplomatic. It is also apparent that the existence of a free and democratic Cuba just 90 miles

from our shores is in the national security interest of the United States.

The United States has a strong interest in promoting international trade. It is precisely for this reason that we must do everything possible to prevent the WTO from undermining its own credibility by reaching a decision on a non-trade matter that purports to circumscribe our ability to adopt policies essential to our national security. We should use every defense available to us to preserve the integrity of the WTO. including that of national security.

Surely, the members of the European Union do not wish to attack the concept of private property so basic to our democratic way of life by asserting that its members have a right to traffick in property stolen without compensation from American citizens. The European Union is picking the wrong fight in the wrong forum. The friends of Europe here and of the United States there need to pull us back from the brink.

Our real focus is and should remain the goal we share of freedom and democracy for the people of Cuba.

Hearing" "Interfering with U.S. National Security Interests: The World Trade
Organization and the European Commission Challenge to the Helms-Burton Law"

March, 19, 1997

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My colleague Lincoln Diaz-Balart and I, along with other Members of Congress, recently participated in an official United States delegation for the purpose of conducting high-level consultations with our counterparts in the European Union and in the North Atlantic Treaty Organization. The broader mission statement was to discuss the potential for further strengthening the economic linkages and political cooperation between the United States and Europe -- an ironic choice of words given Europe's hostile position against the Helms-Burton law and U.S. policy toward Cuba in its entirety. Once past the rhetoric, the U.S. delegation soon had to assume a proactive stance, as it was forced to not only defend U.S. policies on technical grounds, but also had to defend U.S. national security interests against outside interference from the World Trade Organization.

The European leaders poised themselves as supportive of the United States at all levels and referred to the historical ties that unite the two sides of the Atlantic, placing particular emphasis on their participation in GATT, the Organization for Economic Cooperation and Development, and the International Monetary Fund, and now the World Trade Organization. They referred to a strong sense of common interest; yet reiterated that they are proceeding with their challenge in the WTO to the HelmsBurton law, or to call it by its proper name, the Cuban Liberty and Democratic Solidarity Act.

The ambivalence of the European leaders with regards to Cuba was evident from the onset. Most importantly, their general statements and those in the challenge to the Libertad Act, reflected a high degree of misunderstanding and misinterpretation of the law which required immediate clarification. The task at hand for my colleagues and I was then to: elucidate the purpose and objective of the Libertad Act by underscoring the repressive conditions the Cuban people are subjected to by the Castro regime; explain the provisions of the law in detail; and relate the integral role it plays as an instrument of American foreign policy.

First and foremost, we had to emphasize the ongoing human rights abuses in Cuba; the brutal and inhumane practices of the regime; the lack of political freedoms and violation of civil liberties; the absence of any safeguards for the labor force; the lack of a fair and just legal structure; and the total disregard by the Castro regime for international agreements ensuring the natural rights of all citizens. It should not have been necessary to outline these facts for the European leaders. There is hardly anyone in the world that is not, at least, aware of this reality. Whether they act to correct these wrongs is obviously another story altogether. However, given the Europeans' hostility toward a measure which attempts to bring liberty to the Cuban people, we felt compelled to speak out yet again.

This goes to the heart of the Libertad Act. Helms-Burton is more than just one issue, one provision. It includes a slew of provisions designed to protect the Cuban people and improve the conditions they live in and work in. It deals directly with the responsibility of all free nations to help bring fair and just practices to Cuba; to help bring democracy to Cuba; and not to contribute to the continued abuse of the Cuban people by rendering even tacit support to Fidel Castro.

Nevertheless, despite our best efforts on this front, it was clear that the EU representatives had blinders on. They wanted to continue their policy of acceptance and appeasement with regards to Cuba. Their sole focus was on those provisions of the Libertad Act which could in any way reduce their profit margin, their returns on their Cuban investments, their monopoly of various sectors of the Cuban economy. Who cares what the monster did or who he ate, as long as he didn't eat them (the Europeans)? That is, the Europeans demonstrated through their words and their actions, that their priority was to look the other way in order to ensure a positive trade balance with Cuba. Thus, the focus was on Title III -- a provision which prohibits trafficking in U.S. confiscated property and which establishes punitive measures against those

who profit from what rightfully belongs to American citizens and Title IV which denies U.S. entry to those individuals.

Ironically, for leaders who are consumed with a single section, of a single bill, they are ignorant about what Title III does. They were, and many still are, under the mistaken impression that it is an "extraterritorial" provision. Well, as my colleagues and I clearly stated and should be emphasized again: The Libertad Act does not interfere with another nation's sovereignty in any way. The sanctions only apply if a foreign investor trafficks in property stolen from the U.S. by the Castro regime -- a fact that many European did not know. It concentrates exclusively on protecting U.S. interests. The U.S. cannot condone the blatant disregard for U.S. claims on such property and thus must implement mechanisms to defend the rights of American citizens against those who violate them.

Furthermore, the Libertad Act does not violate free trade; nor does it impede GATT provisions; nor is it benefitting the U.S. commercially to the detriment of the EU of other WTO members. Thus, the requirements for a complaint to be valid do not exist with respect to the Libertad Act -- that is, the EU challenge to the law has no legal or technical merits. The Libertad Act in no instance tells our European allies that they cannot invest in Cuba. European investors can proceed freely to build luxury hotels in Cuba -- hotels banned to the Cuban people. They can build, dig, or buy anything in Cuba as long as it is not using property illegally confiscated from U.S. citizens.

Despite the best efforts of the Members of the U.S. Congressional delegation, our European allies were not able, or perhaps not willing, to understand the true nature of the law. They continued their hostile rhetoric against the Libertad Act and extended their attacks to U.S.-Cuba policy dating back to 1961. The EU representatives contended that the current law and historical embargo were an obstacle to the multilateral trading system, violated the standards of free trade, and was a biased trade policy. In turn, they argued that it falls under the jurisdiction of the World Trade Organization and the EU challenge to it needs to be heard by a WTO dispute settlement panel. This assessment is wrong and all the arguments set forth to justify it are fallacious.

The E.U. is forcing the World Trade Organization to rule on a matter that clearly falls beyond the scope of the organization. The WTO is exclusively designed to settle trade policy differences among its member nations. The Libertad Act is of a political nature. It is a foreign policy instrument of the United States and, therefore, the WTO has no jurisdiction over it. To involve the WTO in a dispute over foreign policy is a thinly veiled attempt to interfere and dictate the national security agenda of the United States. No U.S. Congressman, or other government leader, would ever allow the WTO or any other foreign or international entity to determine what the U.S. can and cannot do to protect its national security interests. No outside entity can dictate who can and cannot enter U.S. borders if it is illegally profiting from confiscated American property (Title IV of the Libertad Act). The Clinton Administration made the right decision in not recognizing the WTO authority over this matter.

It is ironic, nevertheless, that the very nations which invoke the “extra-territoriality" argument against the Libertad Act are the ones to pressure the WTO to directly interfere in the internal affairs of the United States.

The fact is that the Europeans are merely attempting to use the WTO to clear their conscience. The EU strategy appears to be to negate U.S. policy toward Cuba by creating an image that the Libertad Act and related U.S. laws are wrong. It goes on to add offensive rhetoric against the U.S. -- "its close ally" -in an attempt to justify its immoral Cuba policy.