In a breakthrough that could avert a serious trade dispute between the United States and its European allies, the European Union has agreed to halt its efforts to overturn a controversial U.S. law that punishes foreign firms doing business in Cuba.
The EU on Friday withdrew a complaint before the World Trade Organization over the Helms-Burton Act, a law passed last year to tighten the U.S. trade embargo against Cuba.
European officials had been scheduled to argue before the WTO on Monday that the law unfairly imposed U.S. rules on their trade.
Instead, European officials said they would work with Washington over the next six months to develop a policy detering foreign investment in assets seized in violation of international law. But they said they will revive the complaint if no agreement is reached. The Helms-Burton Act imposes sanctions on those investing in property confiscated from Americans after Cuba’s 1959 revolution.
In exchange, the White House will seek an amendment to the law to give President Clinton authority to waive a provision that bars executives of companies that invest in disputed properties in Cuba from entering the United States.
The agreement, announced by the Europeans in Brussels, temporarily averted a confrontation that officials on both sides of the Atlantic had said could cripple the authority of the World Trade Organization and have far-reaching consequences for international trade.