WORLD

Stuck in the middle

Canada protests Washington’s bill on Cuba trade

LUKE FISHER March 18 1996
WORLD

Stuck in the middle

Canada protests Washington’s bill on Cuba trade

LUKE FISHER March 18 1996

Stuck in the middle

Canada protests Washington’s bill on Cuba trade

UNITED STATES

Five Cuban-Americans in raincoats strode up Pennsylvania Avenue towards Capitol Hill. One had a poster around his neck reading “Don’t deal with murderers.” Another wore a placard decrying “Castro the killer.” They were trudging through the drizzle to support the Cuba “Libertad” bill, the toughest anti-Castro message yet from the U.S. Congress. The law is designed to force the Communist dictator from office by punishing Canada and other countries who trade with the Caribbean island, thereby choking its economy. “Why does Canada do business with criminals?” yelled one of the protesters. ‘To hell with Canada.” Inside the Senate, North Carolina Republican Jesse Helms compared Canada’s $500 million worth of annual trade with Cuba to Neville Chamberlain’s appeasement of Adolf Hitler just before the Second World War. Canadians, he blustered, should “be ashamed” of themselves. “You become part of what you condone.”

The once-stalled bill that Helms authored with Indiana Representative Dan Burton passed easily in the Senate by 74 to 22 votes, and by an even more lopsided 336 to 86 in the House the next day. The Feb. 24 downing of two civilian American airplanes by Cuban jet fighters has sparked outrage in the United States, and politicians are wary of appearing soft on Castro in an election year. President Bill Clinton, who had earlier threatened to veto the bill, was to sign it into law this week.

The move forced Canada into a fierce three-way clash, pitting its lucrative friendship with Cuba against relations with Washington. Prime Minister Jean Chrétien spearheaded a regional protest against the U.S. law from his sun-drenched perch at a meeting of Caribbean leaders in Grenada. But he countered a strongly worded condemnation of the U.S. action with cautions against rushing into trade retaliation. “Perhaps after the election we will be able to talk to Senator Helms and others more rationally,” offered Chrétien once he returned to Ottawa. He expressed his hope that Clinton will use a key provision in the law that gives the President a waiver to block future action against Canada. Ottawa has the backing of the European Union, which accounts for 45 per cent of Cuba’s foreign trade. And Mexico—a top investor in Cuba along with Canada and Spain—said that, like Canada, it may register its opposition to the new law with the secretariat of the North American Free Trade

Agreement. NAFTA guarantees free movement of business people across borders.

The provision that rankles is aimed at halting foreign joint ventures in Cuba. It allows Cuban-Americans to use U.S. courts to pursue international firms investing in property expropriated by the Castro regime following the 1959 revolution. Another clause bars executives of firms that have benefited from ex-

propriated assets—and their families—from entering the United States. Toronto-based Sherritt International Corp., led by outspoken CEO Ian Delaney, is the largest Canadian target. Sherritt’s nickel mine at Moa Bay was originally built by Freeport Sulphur Co. of New Orleans in 1959. It had only just started shipping nickel concentrate to Freeport’s refinery in Louisiana when it was seized by Castro in the summer of 1960. Freeport, now called Freeport-McMoran, will not discuss the specifics of its claims against the property, but U.S. reports put the Moa Bay claim at $115 million. According to Sherritt, its deal with the Cubans indemnifies it for any damages. Still, the mere threat of litigation could not only discourage Sherritt’s lenders and suppliers, but investors as well.

Canada’s Delta Hotel chain, which has seven joint ventures in Cuba, owns no land in

Cuba that was expropriated, but is still watching Ottawa’s response closely. Said spokeswoman Marilotte Bloemen: “We are a Canadian company doing business with a legal trading partner and we expect the government to defend our interests.” But the Helms-Burton bill was not viewed as bad news for all Canadian-Cuban business. ‘We think this is very positive for us,” said David Allan, chairman of Toronto-based York Medical Inc. York Medical has secured a number of licences to Cuban pharmaceuticals. Since, as Allan says, “any rapprochement between the American and Cuban scientific communities is a nonstarter,” a major competitor for future pharmaceutical and biotech agreements has been removed from the field.

Nonetheless, in the view of most Canadian players, the application of American laws to individuals or corporations outside the United States sets a chilling precedent by run-

ning roughshod over the sovereignty of other nations. That opinion was widely shared in Europe and the Caribbean—not to mention in Cuba itself. “Even if I don’t agree with my government, it is the job of we Cubans to change the system or keep them in power,” said one Havana resident. While the Cuban government was grateful for Canadian support against the U.S. hardline policy, officials feared negative fallout from overseas businessmen. “Investors will still come to Cuba, but they will come with caution,” said Carlos Fernández de Cossio, head of the Cuban foreign ministry’s North America section.

U.S. Trade Representative Mickey Kantor was adamant that the United States is within its rights to take action against Canadian firms dealing in Cuba, through a national security provision in NAFTA. But some trade officials in Washington are privately sympa-

thetic to the Canadian view and say implementation of the bill will be softened. Maybe, but former Canadian free trade negotiator Gordon Ritchie, who now runs the Ottawabased consulting firm Strategico, believes that Cuban-Canadian trade is falling victim to bandwagon politics: “The Americans are out of line. I suggest Mr. Kantor go back and read NAFTA” Ritchie believes that if negotiation fails Ottawa should answer Washington’s protectionism with more protectionism.

That American hostility echoed loud and clear in Montreal last week as representatives from Washington and Havana presented drastically diverging versions of last month’s air attack to the International Civil Aviation Organization (ICAO). Cuban National Assembly president Ricardo Alarcon blasted the United States for backing Brothers to the Rescue, the Miami-based group that owned the planes and regularly searches the waters south of Llorida for fleeing Cubans. Alarcon argued that the planes were within Cuba’s 12mile territorial limit and that the group has repeatedly violated Cuban airspace over the past two years—even dropping “subversive propaganda” over the capital in January. There were similar sparks at a UN Security

Protectionist volleys are increasingly straining relations between the two countries, which have also chafed recently over softwood lumber and magazine publishing. Yet another dispute developed last week after the

United States declared that Canada has no right to restrict international traffic through British Columbia’s Inside Passage, a 750-mile strait between Vancouver Island and the B.C. coast. The statement was a response to Canada’s 1994 introduction of a $1,500 transit fee on American fishing boats that use the passage. Underlying the simmering disagreement is Canada’s view that U.S. fishing boats catch far more than their share of B.C. salmon. Ottawa last week rejected American demands that Canada return more than $300,000 in transit fees collected so far. But B.C. Premier Glen Clark said Canada should be much tougher: “This is critical to the future of our salmon fishing industry and we need a strong response.” International Trade Minister Art Eggleton is weighing a response to both the British Columbia and Cuba issues. It will not be easy. American analysts say Canadians underestimate anti-Castro passion in the Unit-

ed States, particularly in Florida, home of most of the 1.1 million Cuban-Americans. “Clinton decided he had little to lose by insulting Canada and everything to gain by pleasing Florida,” said Larry Birns, director of the Council on Hemispheric Affairs, a Washington-based think-tank. Clinton’s likely Republican opponent, Senator Bob Dole, voted in favor of the Cuba bill, declaring: ‘We are sending a clear message that the time for Lidel Castro has come and gone.”

Council debate the same day in New York City. Madeleine Abright, the U.S. ambassador to the United Nations, contended that the Cubans “knowingly, wilfully and in broad daylight shot down two aircraft that were unarmed and clearly marked as civilian.”

Talks between Washington and Havana degenerated by week’s end, with Cuba threatening to bar U.S. commercial airlines from flying through its airspace—which

‘Clinton decided he had little to lose’

would cost it thousands in fees from the 130 daily flights. The ICAO has 60 days to report to the Security Council, which may then order sanctions against one nation or the other.

For Canada, the challenge remains how to influence the United States during its war of words with Cuba. Trade retaliation is one option, viewed as risky by many. But Reform party foreign affairs critic Bob Mills is among those who suggest that Chrétien remind Clinton of Canada’s current assistance to the United States in Haiti. More than 700 Canadian soldiers are replacing American UN troops that Clinton wanted out. In talks with U.S. officials this week, Foreign Affairs Minister Lloyd Axworthy hopes to get a commitment that will minimize the new law7s effects on Canadians. But White House assurances have not been quick in coming. In fact, with the law specifying that any presidential waiver occur on Aug. 1, shortly before the official start of the presidential campaign, U.S. domestic politics could again cloud the skies over Cuba.

LUKE FISHER

in Ottawa with

WILLIAM LOWTHER

in Washington and

MERCEDES ARCE

in Havana