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. Last Updated: 07/27/2016

U.S. Stalls Panel on Cuba Trade Law


GENEVA -- The United States on Wednesday blocked a European Union request for a World Trade Organization panel to rule on Washington's controversial Helms-Burton investment law, which penalizes firms doing business with Cuba.

Under the rules of the Geneva-based WTO, however, a neutral panel on the dispute will be created automatically at the next regular meeting of the WTO's Dispute Settlement Body on Nov. 20, just over two weeks after the U.S. presidential and congressional elections on Nov. 5.

A WTO member state can refuse only once a request to set up a panel. It must agree the second time. This was the EU's first request, which followed three rounds of bilateral consultations since June.

The European Commission, the EU's Brussels-based executive, said in a statement the bloc objected to what it termed U.S. efforts "to force other countries to follow their own foreign policy objectives through the threat and actual imposition of trade sanctions."

The Helms-Burton law, which has been condemned by all major U.S. trading partners, including Canada and Mexico, allows U.S. citizens to sue foreign firms that invest in property confiscated after Cuba's revolution in 1959.

The EU argues that the legislation violates trade rules. Washington contends it is a matter of national security.

The European Commission's statement was read by Ian Wilkinson, acting head of the EU trade delegation in Geneva, to a closed-door session of the WTO.

The EU said it opposed the United States "exerting jurisdiction" over companies that are registered in Europe, even if they are U.S.-controlled.

Washington, which has tried to dissuade the EU from requesting formation of a WTO panel, has indicated it may invoke the never-tested national security exemption in its defense.

If the neutral panel rules that Washington may invoke its exemption on grounds of national security, it could set a damaging precedent that might jeopardize WTO non-discrimination rules, trade sources say.

On other matters Wednesday in Geneva, the WTO:

?Set up a panel to rule in a bitter dispute between the United States and Japan over access to Japanese photographic film markets. A panel of three experts will look into the case, which has pitched film giant Eastman Kodak against its main international rival, Japan's Fuji Film. The panel's decision is expected in six to nine months, depending on appeals.

The United States contends that the Japanese government purposefully laid out a series of complicated rules and guidelines to make it difficult for foreign goods to compete in the Japanese marketplace.

?Agreed to set up a panel to examine a Canadian complaint that a European Union ban on the import of hormone-treated beef violates free trade rules. The panel will be the second on the issue. In May, the WTO's Dispute Settlement Body, on which all members of the organization can sit, agreed to a similar United States request.

?Issued a report contending that both rich and poor countries would benefit from a binding agreement setting rules for the treatment of foreign direct investment. The controversial report, compiled by the WTO's usually cautious secretariat, said only negotiation among the trade body's 124 members could provide the "global and balanced framework" for such a deal. The outcome of such talks -- rejected by several key emerging economies --"will have an important impact on the efficiency with which scarce supplies of capital and technology will be employed in the next decade and beyond," it declared.

?Received notice that Canada was suspending a request for a WTO panel to look into export subsidies granted by Brazil to foreign purchasers of light aircraft. A Canadian official said the decision was made to allow more time for consultations between the two countries aimed at getting a bilateral resolution of the dispute. ()