Club rum, plans to launch a World Trade Organisation (WTO) case against the United States over a US law on trade marks, an EU official said yesterday.

The move drags a dispute involving two world famous drinks manufacturers, Bermuda-based Bacardi and Pernod-Ricard SA, and the Cuban government into the diplomatic arena.

"We have decided we will be filing for consultations in the WTO,'' a European Commission official said, saying the request would be made "in coming days.'' Filing for consultations is the first stage in the world trade body's dispute settlement procedure. If talks fail, the plaintiff can ask for a dispute settlement panel to be set up.

The EU objects to Section 211 of last year's US Omnibus Appropriations Act, which says trade marks used in connection with assets confiscated by the Cuban government cannot be registered without the permission of the original owner.

"We want to find an amicable solution with the US, but we believe this legislation as it now stands breaks WTO rules,'' the Commission official said.

The case could join a long list of transatlantic trade disputes, including rows over hormone-treated beef and bananas.

It is the second time in recent years that a US law on Cuba has angered the 15-nation EU.

In May 1998, the EU and the United States struck a deal to remove the threat of sanctions under the Helms-Burton act, which set penalties for foreign companies investing in Cuban property seized after the 1959 revolution. The rum dispute has its roots in the early years of the Cuban revolution in 1960 when Jose Arechabala's Havana Club rum plant at Cardenas, Cuba, was expropriated by President Fidel Castro's government.

In 1993, French drinks giant Pernod-Ricard formed a joint venture with a Cuban state company to market Havana Club rum produced in Cuba.

However, Bacardi says in April 1997 it acquired from the Arechabala family the rights to the Havana Club trade mark in the United States, Cuba and elsewhere.

Havana Club Holdings S.A., the Pernod-Ricard joint venture, filed a trade mark infringement suit in a US federal court in 1996 over Bacardi's use of the Havana Club trade mark in the United States.

Part of the court's ruling earlier this year cited Section 211 as a reason for blocking Havana Club Holdings' trade-name infringement claim.

Last month, Bacardi filed a lawsuit against the Cuban government and Pernod-Ricard in Madrid to stop them marketing Havana Club rum in Spain.