to arbitrate between the EC countries and the United States under WTO guidelines. Unfortunately, the EU countries have been unable or, better yet, unwilling to understand two essential points. First, the LIBERTAD Act is one of a political nature. It is a foreign policy instrument of the United States and thus falls beyond the purview and the jurisdiction of the WTO. And, second, there is absolutely no factual basis or substantiating evidence to support the EU challenge and these are the critical issues that we are addressing today. With regard to the first issue, to involve the WTO in a dispute over foreign policy is merely a thinly veiled attempt to interfere and dictate the agenda of the United States. I am confident that I speak for most, if not all, of us here today when I say that no U.S. Government leader would, in good conscience, allow the WTO or any other outside entity to determine what the United States can or cannot do to protect our own interest. No outside entity can dictate who can or cannot enter U.S. borders if it is illegally profiting from confiscated American property and that is actually Title IV of the LIBERTAD Act. International law has long recognized that each State has the sovereign right to dictate its foreign relations and to protect its citizens. Therefore, the U.S. Government's right to make decisions about our own foreign policy and our national security is absolute and cannot be abrogated or interfered with by any foreign entity. On the arguments raised against the LIBERTAD Act and against our 35-year-old trade embargo on Cuba products, it reflects a high level of misunderstanding and misinterpretation on the part of our European allies. First and foremost, the LIBERTAD Act is not extraterritorial. The sanctions imposed in its most contentious portions of the law, which is Title III, only apply if a foreign investor traffics in property stolen from U.S. nationals by the Castro regime. It cannot be made any clearer. The LIBERTAD Act and the 35-year-old trade embargo do not violate free trade nor do they impede GATT provisions, particularly since they are consistent with GATT 1994 and approved under the previous GATT rounds. Furthermore, the LIBERTAD Act does not benefit the United States commercially to the detriment of the EU or other WTO members. As a result, even if WTO did have authority over this dispute, which it does not, the EU challenge fails to meet any of the requirements necessary for a dispute settlement body. It must be underscored, the LIBERTAD Act, in no instance, tells our European allies or any others that they cannot invest in Cuba. They can proceed to satisfy their greed by building luxury hotels in Cuba, hotels which, by the way, are banned to the Cuban people. They can build, dig or buy anything in Cuba as long as they do not use property illegally confiscated from U.S. nationals. However, the United States cannot and will not condone the blatant disregard for U.S. claims on such property and must implement mechanisms to defend the rights of American citizens against those who violate them. This is one of the most important responsibilities of a government to its people. Yet the EU persists in its role as Castro's mouthpiece, distorting the facts about the LIBERTAD Act and using political rhetoric and technical maneuvering to interfere with U.S. internal decisions in operating vis-a-vis U.S. foreign policy. Exactly who is guilty of this extraterritorial nature? I suggest to the EU that it first look in the mirror and recall the saying, "He who lives in a glass house should not throw stones." Although this issue of WTO authority and the EU challenge to the LIBERTAD Act may appear to be clearly defined and not debatable, there are those who would argue that this, in fact, is a trade matter and that the WTO is the appropriate forum for arbitration. Furthermore, even if there was an absolute consensus on the issue, it is still vital for the arguments on both sides to be heard in an attempt to educate and inform the American people, the public and the private sector leaders in the United States, and the Europeans and all other countries battling over this issue. The veracity of contentions must be measured against the facts in order to curtail further misinformation. I would like to make sure that we note that we did extend invitations to Ambassador Eizenstat, the Office of U.S. Trade Representatives, and the Department of State. All declined stating that they are in the midst of consultations on this issue. We thank all of the witnesses who will be appearing before us today and, in particular, I would like to welcome our colleague in the House, Congressman Lincoln Diaz-Balart, who was instrumental in writing most of Helms-Burton and who just returned from the Codel Gilman, where he had visited with many European leaders talking precisely about the EU challenge to Helms-Burton before the World Trade Organization. We especially thank Congressman Diaz-Balart for his role in codifying the U.S. embargo into law and we welcome Congressman Diaz-Balart with us today. Thank you, Lincoln. Mr. DIAZ-BALART. Thank you. Ms. ROS-LEHTINEN. I am sorry. Mr. Sherman and Mr. Clement, I would like to recognize you as well. Mr. SHERMAN. In my first few months in Congress, I am not wedded to any particular position on these issues. I am entitled to a certain amount of ignorance and indecision. But I do want to comment upon EU's generous contributions to international peace. Peace and security in the world and the free trade routes around the world, are at an all-time high and in order to maintain them, nations need to spend tax dollars. They sometimes need to spend the blood of their soldiers. And they need to moderate their trade positions in order to achieve peace and democracy around the world. EU has been willing again and again to do way less than its fair share in all of these areas, whether it is burden sharing where EU is willing to expand NATO as far as the American tax dollar can go or whether it is in the area of sending soldiers in harm's way where when they are getting far more of the oil from a region, they are willing to send far fewer of the soldiers. But it is in the area of trade where the underperformance of some of our European allies is most dramatic. Now, I am not saying that the members of EU are willing to trade everything with everyone. They are only willing to do it if there is a profit. And those who are familiar with Star Trek will notice the Ferengi-esque approach to trade ethics when it comes to those who look at trade first, second and third and democracy somewhere off the list. The United States is a sovereign nation. We have the right to protect property that has been stolen from our nationals and I would think that EU, instead of criticizing us for undertaking this action, would be joining us in trying to put trade pressure on this despicable regime in Havana. Or, if they disagree with our particular policy there, at least point to some other place in the world where Europe has taken the lead in saying no to profit and yes to democracy. Until then, the image of the Ferengi is the one that comes to mind. My apologies to those who do not follow Star Trek. Ms. ROS-LEHTINEN. Thank you. I will have to see it this weekend. Mr. Clement. Mr. CLEMENT. Madam Chairman, let's just proceed with the witnesses that we have. That would be fine with me. Ms. ROS-LEHTINEN. Thank you so much. And we have also been joined by Congressman Bob Menendez who, along with Congressman Diaz-Balart, was instrumental in writing a good portion of Helms-Burton. Bob's most direct participation was in Title II of Helms-Burton, the hope for the enslaved people of Cuba, post-Cas tro. We welcome both of our witnesses here today. STATEMENT OF HON. LINCOLN DIAZ-BALART, A Mr. DIAZ-BALART. Thank you, Madam Chairman. I must say that this is the first hearing that I am able to testify at in your new Committee. I feel honored to be here and I congratulate you for assuming this extraordinarily important position leading the congressional efforts in the very important field of international trade. Congratulations to you as well as to the Members of the Subcommittee. I would like to submit for the record, Madam Chairman, with your consent, a written statement. Ms. ROS-LEHTINEN. We will submit all of your statements for the record, without objection. Mr. DIAZ-BALART. I think you will be pleased to know that I will not read it, in the interest of time. I think you touched upon a number of very important aspects, as did Mr. Sherman as well, that we need to be focusing on. The European action is obviously irresponsible, as well as uncalled for, in having brought this challenge at the WTO. I think they are risking support for the WTO among the American people and among the representatives of the American people here and the whole international trade structure, which has been created with so much work and so much diligence. But we did witness, in our visits to European capitals with a number of the leaders of EU, their dismal lack of information with regard to what the Helms-Burton Law does and does not do. You pointed out that it is not extraterritorial because it limits itself specifically to property confiscated from U.S. citizens. It was very interesting to see that very few leaders of EU knew that. But you pointed out another very important aspect which I think we have to focus in on time and time again-what commercial benefit does our law provide to U.S. businesses in Cuba at this time? Complaints before the WTO are when one country believes that another country, due to certain actions, is providing benefits to its businesses somewhere in an improper manner. We are saying this because of our ethics-and our view, obviously, of Cuban historyand our intimate knowledge of Cuba and its people, we are saying we will not trade at this time with Cuba and we will forego and lose profits at this time that we could obtain by trading with the usurper or the oppressor of the Cuban people and it is inconceivable that someone could allege before a world trade body that we are granting, due to Helms-Burton or any other aspect of our lawwhich, by the law, is being challenged our entire law, the Torricelli legislation, the executive orders which began, as you stated, over three decades ago as a consequence of Castro's confiscation of U.S. property-all of that has been challenged at the World Trade Organization by Europe. It is inconceivable for them to say that we are providing undue benefits to U.S. businesses. Now, we do know, Madam Chairman, that by deferring profits for U.S. businesses by not permitting, in effect, U.S. businesses to profit from the oppression of the Cuban people, we do know that in the long run, after Cuba's liberation, the goodwill that will exist for U.S. businesses will be significant. We know that because, as we told our European friends, they talk a lot about history and geography. We know a little bit about history and geography as well and we know a little bit about the Cuban people. And it does not take an expert to know that companies such as Sherritt, the largest publicly held mining company in Canada, that today is not only exploiting the Cuban people in coordination with Castro but dumping chemical waste from the processing of the minerals that it takes from Cuba and processes in Canada and to avoid the costs of Canadian environmental protection disposal regulations, Castro agrees that Sherritt dump on Cuban soil and water that poison. It does not take an expert, Madam Chairman, to know that there will not be goodwill by the Cuban people and its elected representatives in the future toward companies that engage in crimes such as Sherritt. So I commend the Chairman for holding this hearing. I am disappointed not to see the Administration here. The emphasis of my written remarks revolved around or was that we must, as soon as possible, invoke national security at the World Trade Organization and I have called forth and brought forth the many, many precedents that exist for us to do so. But I think, and I will simply say that it is very important that we make clear that the American people and the Congress will not tolerate pressure from the World Trade Organization on matters that are not trade-related. When we are prohibiting U.S. businesses at this moment in history from profiting from the oppression of the Cuban people, that prohibition on our businesses is not a trade matter. It is a political issue and it is an unacceptable challenge brought forth by the Europeans. So we have to make clear that we are not going to permit the WTO or any other supra-national organization to try to pressure us on matters that are not trade-related and if the WTO seeks, goes forward, should try to have a ruling by the panel to influence the U.S. foreign or national security or immigration policy, then we have to be very clear, I believe, Madam Chairman-we have to be ready, willing and able to withdraw from the WTO. Thank you. Ms. ROS-LEHTINEN. Thank you very much, Mr. Diaz-Balart. [The prepared statement of Mr. Diaz-Balart appears in the appendix.] Ms. ROS-LEHTINEN. Mr. Menendez. STATEMENT OF HON. ROBERT MENENDEZ, A REPRESENTA- First of all, I want to say that I think the U.S. Trade Representative has done an excellent job in this process and is moving forward and I believe the Administration is deeply committed to ensuring that the United States has the right to pursue its interests under GATT and to pursue it through any of the provisions that are within GATT that will give it the ability to pursue its national interests and its national policy. And I believe, from my conversations with the Administration, that is where they are headed. Of course, they would like to try to settle this outside of a WTO process. I do not know what room we have to do that but, nonetheless, that would be desirable as long as it does not diminish that which we have accomplished legislatively and which is the law of the land. This is clearly a matter of U.S. foreign policy and national security in which the WTO has no jurisdiction or authority. By proceeding, I think the EU threatens the integrity of the WTO, an organization which many of us have supported and worked hard to create, and they do so for the most part, from my perceptions, to appease domestic constituencies. The fact of the matter is that I think that they are raising very, very strenuous concerns has more to do with the model legislation and the Iran/Iraq sanctions bill that unanimously or overwhelmingly, I should say, passed both Houses. Cuba gets all the attention by the Europeans but I think the real issue is that if you look at the Europeans and what is at stake for them, I think economically to them that bill has a greater significance. And yet the House and the Senate spoke overwhelmingly of their concern about terrorist countries that, in fact, the United States wants to ensure under that legislation that there are certain prohibitions. And that is in the national interest and the national security of the United States. Now, if that is not the case, then other than the domestic value that is derived from pursuing this case, the EU really has nothing to gain. The United States is not going to reverse any aspect of its foreign policy as it relates to Cuba. The suspension of Title III was renewed in January, one of the provisions of the Helms-Burton legislation-one of the most objectionable provisions that they constantly raise. The suspension of that was renewed in January of this year and there is no compensation to be granted because there |