Wal-Mart Told Cuban Pajamas Fit Canada Even if US Bans Them

Cooler heads could still prevail, but Canadian and United States officials, as well as the news media, seem riveted by the great Wal-Mart pajama flap.

It all started innocently on Feb. 27 when Valdimar Johnson, the manager of a Wal-Mart store in Winnipeg, responding to a customer complaint, pulled 48 pairs of "Made in Cuba" men's pajamas off store shelves. Mr. Johnson's concern stemmed apparently from US laws prohibiting trade with Cuba. "It is in conflict to a US law," he told a reporter for the Winnipeg Free Press.

That swift action might have pleased American legislators like Sen. Jesse Helms (R) of North Carolina, cosponsor of the Helms-Burton law that extended the US trade embargo of Cuba to companies in other countries and allowed US courts to try foreign companies for doing trade with Cuba.

But in Canada it is against the law for Canadian companies - including US subsidiaries operating in Canada - to obey American laws prohibiting them from doing business with Cuba.

The Canadian government has been among the leaders in criticizing the Helms-Burton legislation. The US position is that support for Cuban President Fidel Castro that comes from Cuba doing business with other nations must be cut off. Canada says doing business with Cuba can support a move toward democracy.

Aides to Senator Helms on his Senate Foreign Relations subcommittees say the Canadian pajama furor shows once again how twisted Canada's foreign policy has become in response to Washington tightening the trade embargo on Cuba. "Has Canada become like the USSR where government dictates to business what products they stock on their shelves?" wondered Marc Thiessen, a subcommittee spokesman.

In making the decision to pull the pajamas from his shelves, it is unclear whether manager Johnson realized he was breaking Canadian law. But soon after, thousands of Cuban pajamas were quietly pulled from Wal-Mart shelves in 135 stores across Canada.

Not quietly enough, however. The Canadian press picked up on the Winnipeg Free Press article. Canadian officials quickly began speaking out strongly against Wal-Mart's action, saying it was against Canadian law for companies in Canada to obey US laws prohibiting trade with Cuba.

"We expect companies in this country to obey the laws of Canada and to act according to Canadian ethics," Finance Minister Paul Martin said. "That position is unequivocal."

In Toronto, Wal-Mart spokesman Edward Gould says the company was not intending to disobey Canada's laws. Instead it was simply responding to a consumer complaint that Wal-Mart was being hypocritical by selling Cuban-made products in Canada when it could not legally do so in the US. The company says the pajamas, which were selling for C$13 each ($9.50), were acquired through a Toronto distributor.

But Sanjeev Chowdhury, a Ministry of Foreign Affairs spokesman, says the issue is not clear cut, especially since Johnson's motivation to pull the pajamas seemed to have been to obey US law. The matter has been turned over to Canada's Department of Justice for review, he says.

Canada is not the only country that objects to the Helms-Burton legislation. Europe has recently joined in by criticizing the law and challenging it in the World Trade Organization. Washington has responded by saying it would invoke a "national security exemption" declaring that Helms-Burton is not a trade law, but merely a measure to enhance US security against Cuba.

Canada's "rage" against the US over Helms-Burton has risen to "absurd proportions," says Mr. Thiessen of the senate subcommittee, with the result that Canadian pressure on US subsidiaries in Canada will simply backfire. "If you're a businessman in Canada looking at this controversy, your reaction is that you won't buy Cuban products anymore," he says. "This is Canada shooting itself in the foot again."