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U.S. Secretary of State Mike Pompeo speaks about the Trump administration's Cuba policy during a press briefing on April 17, 2019 in Washington.

Drew Angerer/Getty Images

Canada and the European Union hit back Wednesday at the Trump administration’s decision to allow lawsuits against foreign companies connected to properties seized from U.S. firms during the Cuban revolution, vowing to protect their businesses.

Canada and the EU pledged to work together in the World Trade Organization and ban the enforcement or recognition of American court orders against Canadian or European companies.

The landmark tightening of the U.S. trade embargo on Cuba’s communist government represents a major shift in U.S. foreign policy – one that could place Canadian mining, tourism and financial services companies at risk in American courts.

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About one million Canadians annually vacation in Cuba and Toronto-based resource company Sherritt International Corp. is long established there, while countries such as Britain, France and Spain have companies active in rum, cigars and tourism.

Foreign Affairs Minister Chrystia Freeland said Canada is “deeply disappointed” and reviewing options with the EU.

“The EU and Canada consider the extraterritorial application of unilateral Cuba-related measures contrary to international law,” Ms. Freeland, her European Union counterpart Federica Mogherini and EU Trade Commissioner Cecilia Malmstrom said in a joint statement Wednesday.

“Our respective laws allow any U.S. claims to be followed by counter-claims in European and Canadian courts, so the U.S. decision to allow suits against foreign companies can only lead to an unnecessary spiral of legal actions.”

Ms. Freeland said the government regularly met with the U.S. officials since January, when the issue first surfaced, to raise concerns about “the possible negative consequences for Canadians – concerns that are long-standing and well known to our U.S. partners.”

During a recent trip to Washington, Ms. Freeland met with U.S. Secretary of State Mike Pompeo to discuss the effect on Canadian companies if the United States were to resurrect Title III of the Helms-Burton Act.

Canada and its European allies have pushed the Trump administration to continue to suspend use of the dormant section of the law that allows Americans to sue foreign companies linked to Cuban properties confiscated after the 1959 revolution.

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When the U.S. law came went into force in 1996, then-president Bill Clinton postponed the implementation of Title III. Subsequent presidents followed suit and renewed the exemption every six months.

U.S. President Donald Trump changed that practice. Last month, the State Department extended the Title III exemption by only 30 days.

Canada’s Foreign Extraterritorial Measures Act was amended in January, 1997, to provide that any judgment under the Helms-Burton Act will not be recognized or enforceable in any manner in Canada. Other countries implemented similar ”blocking statutes” at the time.

On Wednesday, Mr. Pompeo said the end of the Title III exemption is rooted in Cuba’s continuing support of Nicolas Maduro’s socialist government in Venezuela, and it would take effect early next month.

“Cuba’s behaviour in the Western Hemisphere undermines security and stability of countries throughout the region, which directly threatens United States national security interests,” he said, adding that Cuban military intelligence and state security services today keep Mr. Maduro in power.

“Sadly, Cuba’s most prominent export these days is not cigars or rum, it’s oppression. Détente with the regime has failed.”

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Also on Wednesday, the Trump administration imposed new sanctions and other punitive measures on Cuba and Venezuela, seeking to ratchet up U.S. pressure on Havana to end its support for Mr. Maduro.

Speaking to a Cuban exile group in Miami, U.S. national security adviser John Bolton said the United States was targeting Cuba’s military and intelligence services, including a military-owned airline, for additional sanctions and was tightening travel and trade restrictions against the island.

Canada, its Lima Group allies and the United States have called for Mr. Maduro’s ouster and recognize opposition leader Juan Guaido as the interim leader of the beleaguered South American country, which has been engulfed in economic and political turmoil, sparking a refugee crisis.

The Canadian Chamber of Commerce said recently it was concerned about the potential impact on Canadian companies with operations in Cuba.

With files from Ian Bickis and Reuters

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