A compromise by President Clinton about whether to penalize overseas firms that violate a new anti-Cuba US law may head off - for now - a volatile trade disagreement between Washington and its closest allies.
Faced with a deadline on whether to waive part of the Helms-Burton law allowing foreign firms to be sued if they occupy US property seized in Cuba in 1959, the White House agreed to let the law go into effect but suspended its enforcement for at least six months.
Still in effect, though, is part of Helms-Burton that denies US visas to executives of corporations and their families that profit from US property in Cuba - a move likely to draw criticism from US trading partners.
"The best way to get change in Cuba is not to clobber your allies," says Sir Leon Brittan, vice president and trade commissioner of the European Union.
Mr. Clinton, facing a dilemma over whether to mollify US allies or play to a passionate Cuban-American voting bloc during an election year, managed to push the issue past the Nov. 5 vote.
In a nod to Cuban Americans, the White House over the next six months will urge its allies and their corporations to start a host of pro-democracy measures in Cuba similar to the Sullivan Principles once imposed on the apartheid government of South Africa.
In six months, the White House may allow suits to proceed in US courts based on a company by company review of pro-democracy measures in the workplace, including freedom of expression and the right to organize.
European and Canadian diplomats have been growing redder in the face over Helms-Burton, which places unilateral US sanctions on companies that "traffic" in some $1.8 billion in US property. They view the issue as arbitrary and unfair - US election politics being played at their expense.
Last week the administration informed the executives and major shareholders of Sherritt International Corporation in Canada that they would be blocked from travel in the US. The government in Ottawa is planning similar retaliatory action.
Commenting on Clinton's compromise, one Canadian official said: "This doesn't solve the problem. We don't know when all this ends. There's no sunset clause on this bill. It is unprecedented. When is the last time anyone has barred executives on the basis of something we consider legal?"
The issue is seen as a classic post-cold war dilemma for Clinton: How to exercise US leadership on a sensitive domestic issue while still holding the allies together in a friendly coalition.
The White House sought to present the gravity of the choice by having the president retreat to Camp David, traditional site of statesman-like deliberations, to consider his the waiver deadline.
Prior to the shooting down in February by the Castro-regime of four Cuban-Americans off the coast of Cuba, the White House strongly opposed Helms-Burton. It sought a policy of "engagement" with Cuba which, similar to US China policy, was designed to subvert Castro by introducing friendlier ties, including cultural exchange and an opening of markets.
Yet in order to appear tough to the US public following the shoot-down, the administration changed its tune - supporting a policy of punishment.
Helms-Burton is widely denounced by internationalists in Washington who feel the gains Congress and the White House hope to make with Cuban American voters are out of proportion with the diplomatic impact the unilateral sanctions will have with US allies.
"This is an egregiously bad foreign policy bill," says John Steinbruner, a foreign policy expert at the Brookings Institution in Washington. "We are going way outside recognized criteria for imposing sanctions. This is a device with very serious implications and I think we are about to learn a hard lesson - but not before some very damaging outcomes with our allies."
The president decided to allow the legislation to become law, but impose a moratorium until Feb. 1 on the filing of lawsuits. During the six-month interval, Americans can hire attorneys and prepare the cases but cannot file lawsuits.