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United States Slapped For Anti-Trade Stance Against Terrorist Nations

June 28, 1996

LYON, France (AP) _ A day after denouncing the scourge of international terrorism, world leaders took a slap at the United States for threatening foreign companies who trade with terrorist nations.

The criticism accusing the United States of trying to meddle in the affairs of other nations came today in a joint communique from the annual economic summit of the seven industrial democracies.

The statement saluted lower trade barriers and other economic reforms that create ``great opportunities for the future.″ But it also contained a swipe at U.S. legislation aimed at punishing foreign companies trading with communist Cuba and Iran and Iraq.

The final economic communique was released at a news conference where French President Jacques Chirac, the chairman of this year’s meetings, pointedly said, ``I don’t think economic retaliation is most effective. Taking an entire population hostage is not elegant.″

The communique called on all countries to avoid ``taking trade and investment measures that would contradict″ global trading rules administered by the World Trade Organization.

America’s trading partners contend that a law signed by Clinton earlier this year following the downing of two civilian aircraft by the Cuban military in the Florida Straits is a direct violation of WTO rules.

They are also unhappy with separate legislation also supported by Clinton that would punish foreign companies doing business with Iran and Libya, accused by the United States of supporting international terrorism.

The economic declaration came a day after the world’s seven largest economies _ the United States, Japan, Germany, Britain, France, Canada and Italy _ issued a joint pledge to redouble their efforts to combat terrorism.

Seeking to respond quickly to Tuesday’s truck bombing of a U.S. military complex in Saudi Arabia that killed 19 Americans, the leaders rushed out a special statement that pledged to ``fight terrorism by all legal means.″ The leaders scheduled a follow-up meeting of their top security officials for next month in Paris.

Today, the Clinton administration sought to point up the inconsistency of condemning terrorist acts but then failing to support economic embargoes that would isolate rogue states.

Presidential spokesman Mike McCurry said Clinton was unpersuaded by the arguments from other countries.

``If there is concern among our allies, the best thing they should do is join us in urging democracy in Cuba,″ he told reporters. ``We expect them to help use their influence to bring about positive change in Cuba.″

But U.S. allies were unimpressed. Canadian Prime Minister Jean Chretien said, ``Unilateral application of national law is unacceptable.″

On another issue, the summit leaders also were not able to reach agreement on a key element of a debt-relief plan for poor nations.

The joint statement contained no reference to the sale of $2 billion in gold reserves held by the International Monetary Fund. Britain, France and the United States had promoted the idea as a way to provide a small amount of debt relief for the poorest nations of the world, many in Africa. But German officials, who objected to lowering IMF reserves, vigorously fought the proposal, which was left out of their final statement.

In the communique praising economic reforms, the countries also acknowledged that not everyone, especially those in poor, Third World countries, had benefited equally from the new global economy.

``Globalization poses challenges to societies and economies,″ the communique stated. ``Its benefits will not materialize unless countries adjust to increased competition.″

In a reference to last year’s financial crisis which sent the Mexican economy into a tailspin, the leaders also said that rapid flow of investments between countries produced ``new risks of instability that will make it necessary for all countries to follow healthy economic policies and push through structural reforms.″

The leaders capped off their morning discussion of economic matters with a stroll through the sun-dappled Parc de la Tete d’Or, where Clinton had gone jogging earlier.

Their wives, meanwhile, took time to stop and smell the roses as they were presented with different varieties named for each of them. America’s first lady Hillary Rodham Clinton asked to take a rose bush home for planting. ``Then we can show them to everyone,″ she said.

As the leaders met, Russian Prime Minister Viktor Chernomyrdin arrived in Lyon to join the discussions later today and Saturday. He was a last-minute replacement for Russian President Boris Yeltsin, who stayed home to campaign ahead of Wednesday’s presidential runoff election.

Following the economic talks, the leaders were to continue a discussion on terrorism that began at Thursday night’s opening dinner, reviewing a 40-point plan that has been developed by a terrorism task force.

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