Elizabeth Pisani on a new law aimed at winning support from anexile community.

Democrats and Republicans, falling over each other to woo the Cuban exile community and net Florida's 25 electoral college votes in next week's presidential election, have infuriated America's allies.

At issue is a new law making it illegal for subsidiaries of US companies based anywhere in the world to trade with Cuba. The European Community, Mexico and Argentina have complained that the US has no business telling companies overseas who to trade with; Canada and Britain have forbidden companies incorporated locally to take any notice of it.

Florida has long been a Republican bastion, thanks to the party's tough anti-Castro policies that have secured the support of the state's 700,000 Cuban-Americans (83% of them in Dade County).

'Those votes in Dade County, Florida, mean more to George Bush right now than the whole of the EC and Canada put together,' said Mr Michael Krinsky, a New York-based lawyer who represents Havana's interests.

Mr Jose Cardenas, director of research at the conservative Cuban American National Foundation (CANF), added: 'Republicans talk the political language of Cuban Americans. But now the Democrats are trying it on for size and like the way it looks.'

Two years ago President Bush vetoed legislation similar to that signed into law last week and for months opposed the new law, promoted by Democratic Congressman Robert Torricelli. But once Governor Bill Clinton, the Democrat's presidential candidate, endorsed the proposals, which were tacked on to a defence spending bill, Mr Bush changed his mind. He signed the bill at a Republican campaign function last Friday in a smart Miami hotel.

'It's the Carry Florida Amendment,' snorted an executive at a company that stands to lose several million dollars of business.

The bill is the brainchild of Mr Jorge Mas Canosa, a Cuban-American millionaire variously described as a champion of freedom for the Cuban people and a pretender to the presidency in a post-Castro Cuba. He is chairman of CANF, whose Free Cuba political action committee contributed $17,000 (#10,430) to Mr Torricelli's campaign. Mr Mas Canosa's organisations have also rustled up half a million dollars in funds for about 50 other legislators around the country.

US trade with Cuba has been restricted for three decades, but for the last 17 years subsidiaries of US companies based elsewhere have simply had to apply for approval from the Treasury in Washington to trade with Cuba. Now such trade is illegal.

However, carefully worded comments from the State Department, which earlier in the year opposed the Torricelli bill, suggest Washington will be a limp crusader against US subsidiaries ignoring the law.

Representatives from both the Bush and Clinton campaigns believe the legislation is the last straw that will break the back of an increasingly shaky Castro regime. Some analysts disagree and feel the new law will give Cuban President Fidel Castro a new lease of life. 'This bill gives Castro all he needs to scream imperialism without hurting materially,' said Mr Andrew Zimbalist, an economist at Smith College.

About 300 US subsidiaries requested approval for $718m of trade with Cuba in 1991, $13m up on a year earlier, although economists believe the actual trade was far lower.

Some companies maintain the US suffers most from restricting this trade. An executive at commodities traders Cargill said: 'One of the basic issues that we brought to the attention of anyone willing to listen on Capitol Hill was that if you close off opportunities to US companies, business will move to other countries.' Cargill's Geneva-based subsidiary Cargill International accounted for three-quarters of all US subsidiary trade approved with Cuba for 1990.

The company's entreaties made little headway. 'We were told it wasn't an economic issue, it was a human rights issue,' the executive said.

But Mr Mas Canosa is well aware of the economic implications. '(When Castro falls) a market of 11m consumers will open up overnight; a market that will need everything from toilet paper to the most sophisticated computer. And most of that will come from Florida.'

The Financial Times. (c) The Financial Times Limited 1992.