The European Union, the United States and Helms-Burton

HAVANA – When the Trump administration announced the possibility of activating Chapter III of the Helms-Burton law, European Union leaders immediately reminded the U.S. that such a move would violate the existing agreement on that matter.

It is why I find it worthwhile to clarify what this agreement consists of and what the consequences of its violation might be for the United States.

On March 12, 1996, President Bill Clinton signed the Helms-Burton Act, which led to the immediate condemnation of it by the European Union (EU) and other traditional U.S. allies, such as Canada and Mexico.

As early as October of that year, the EU established a rule to act against it and many of its member countries approved “antidote laws” to deal with it.

There was also the plan hatched for the possibility of a dispute that might generate collateral damage to the framework of the free trade agreement that was under construction at the time. The following year the EU then filed a lawsuit against this law before the World Trade Organization (WTO). 

In the middle of the conflict the Spanish government of José María Aznar, who sought to strengthen his relations with the U.S. without affecting his position in the EU, found itself trapped. It was then that the so-called “common position” originated. It was then that the EU, in line with the stand taken by the United States, set political conditions on Cuba for its cooperation with Europe.

The common position existed until December 2016, when Cuba and the EU established new guidelines for their relations. Although it is worth pointing out that the common position never included the acceptance of the Helms-Burton law.

The EU withdrew its lawsuit against the WTO in 1997 based on a commitment by the U.S. of not applying Chapter III. This chapter in the law created the possibility of U.S. citizens (including after the fact nationalized Cubans) suing European companies, that did business in Cuba with properties nationalized in Cuba during the first years of the Revolution, in U.S. courts.

The EU initially reacted by stating that the Chapter III moratorium was not enough — which was not wrong. In fact, the only thing that the moratorium avoids is that in the process American courts get involved, an unacceptable precedent for any country on earth due to its extraterritorial nature. At the same time it is not determinant for the application of the policy, since the United States could count on other resources to impose it, as has happened through the sanctions applied by the U.S. Treasury Department on European entities.

However, the interest in avoiding a conflict that could affect both parties, resulted in a consensus not exempt from conflicts, as expressed every year at the United Nations with the EU vote against the economic blockade imposed by the U.S. against Cuba, and motivated primarily by the rejection to the existent Helms-Burton law.

Putting Chapter III into full force would entail reviving these contradictions and adding them to the growing conflicts between the United States and Europe. Thus explaining why currently the only part of Chapter III authorized is against specific Cuban companies, which makes the eventual decisions of the parties virtually ineffective in the courts.

In any case, we cannot forget that we find ourselves in a different context to the one that existed in 1997. The Trump administration seems to have less regard for European interests in its international political and commercial relations, as well as its positions on free trade have included the threat of withdrawal from the WTO.

What we’re seeing here is Donald Trump’s interest in winning Florida in 2020. In other words, we return to the original premise of exploiting the interests of the old Cuban owners, even at the expense of the legitimate U.S. claimants, who historically have been enemies of the law, because its application further distances them from an agreement between the countries in favor of their claims.

Beyond the fate of this dispute, a question lingers: What has the United States gained as a country with the approval of the Helms-Burton Law over the last 22 years?

The answer could show us what really moves American democracy.