By Randall Palmer
OTTAWA, Oct 30 (Reuters) - Canada will tread cautiously on the idea of approaching NAFTA to challenge Washington's anti-Cuban legislation, because of U.S. threats to override any NAFTA decision, a top Canadian official said on Thursday.
"We have to be very careful about when we go to NAFTA, over what issues we go to NAFTA,'' Raymond Chretien, Canada's ambassador to the United States, told the National Press Club in Ottawa.
Canada has castigated the U.S. Helms-Burton law, which penalizes some foreign companies with investments in Cuba, as a violation of the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) agreements.
But Chretien, the nephew of Canada's Prime Minister Jean Chretien, said that if a dispute panel ruled against the United States, the Americans had made clear they would invoke a clause to allowe them to ignore it on the grounds of national security.
"The Americans have already told us what they would do. They would invoke national security, and it would go nowhere,'' said Chretien.
Such an outcome would weaken the dispute settlement mechanism, which Canada finds very useful, Chretien said, noting that Canada had won most of the dispute panel reports.
That was the reason the European Union had been reticent about demanding a WTO dispute panel, he added.
"If the Americans tell you in advance, 'If you do this, we'll not even talk to you, we'll not even appoint our judges, we'll not even play the game,' what can you do? The Europeans have understood that quite clearly,'' he said.
The Helms-Burton law was imposed to penalize foreign companies that deal with property in Cuba that was expropriated from U.S. citizens or companies after Fidel Castro took power in 1959.
Chretien also said Canada opposed the fact that the United States had barred executives of Sherritt International Corp. (S.TO)-- on the grounds that the company's mines in Cuba were taken from Americans.
But he seemed to suggest Ottawa could live with it, as long as Washington did not extend the ban to other companies.
"We don't like that at all, but remember two years ago, people were talking about hundreds of executives barred at the border with their little granddaughters going to their condos in Florida. This has not happened,'' he said.
"If ever, if ever other companies were targeted...,'' he declared, leaving the sentence unfinished.
Jesse Helms, the powerful chairman of the Senate Foreign Relations Committee, said this month he found it strange that only two companies, Sherritt and Mexico's Grupo Domos, had been found to have "trafficked'' in confiscated property.
In response to a letter from Helms, the U.S. State Department said it currently had no additional companies to charge but was "working on the problem.''
On another thorn in bilateral ties, Chretien said he was confident Washington would reverse regulations, due to take effect next year, that would require a record of the entry and departure of every foreigner into or out of the United States.
He said Canada had won many allies, such as the mayor of Detroit, in suggesting that could clog traffic at the Canadian-U.S. border and greatly damage tourism and business.
"We just opened up the skies. Why should we lock up the border?'' Chretien said. "I'm confident this law will not see the light of day.''
02:14 10-31-97