Eric Miller - If Canada wants to retain its advantaged position in Cuba, it has to move fast

Eric Miller: If Canada wants to retain its advantaged position in Cuba,
it has to move fast
Eric Miller, National Post | February 9, 2015 | Last Updated: Feb 9 6:30
AM ET

On Dec. 17, 2014, Cuba and the United States ended their five-decade old
confrontation. Canada had long worked to facilitate a rapprochement
between Washington and Havana and again made an important diplomatic
contribution to the December agreement.

As the initial euphoria of success passes, Canada must urgently confront
the question of its place in a post-Dec. 17 Cuba. The restoration of
relations with the United States is likely to accelerate economic
changes on the island and its full entry into the world economy. Without
a fundamental re-thinking of its strategy, Canada could face a loss of
its privileged position in the pantheon of Cuba's economic and foreign
relations.

It used to be easy. During the Cold War, Canada could get credit in
Havana just for showing up. The Cubans were grateful that Canada never
broke diplomatic relations after the 1959 Revolution. Engagement with
Havana also provided an easy way for Canada to demonstrate its foreign
policy independence. Pierre Trudeau maintained such close relations with
Fidel Castro that the Cuban President served as an honorary pallbearer
at the late prime minister's funeral.

The loss of its main patron, the Soviet Union, in 1991 pushed Cuba into
a slow re-thinking of its economic policies. Canadian resource
multinational Sherritt invested in Cuba in the early 1990s and has built
successful mining and petroleum businesses over the past two decades.
The reforms also opened the Cuban tourist industry. Canada now supplies
1 million visitors per year. Still, over the past decade, Canada's
official relations with the Cuban government have been relatively cool.
In the current political context, Havana's statist economic model and
relatively dim human rights record have hardly been an attractive
combination.

Now that the Dec. 17 agreement has re-set the table, Canada will have to
pivot if it is to protect and advance its interests in Cuba. So what
should Canada do to up its game?

A good place to start would be for the Canadian government and private
sector to work collaboratively on a Cuba strategy. It should include an
export promotion component that seeks to protect Canada's leadership in
key market segments, such as foodstuffs and machinery, while growing
trade and investment in other areas.

The transition period to full normalization of relations provides Canada
with a window of opportunity to recalibrate its approach. This should
not be wasted
It should address financing options. Cuba, for example, needs a lot of
infrastructure. Export Development Canada or one of the pension funds
could provide low-cost funding in exchange for using Canadian products
and service providers. It should also address the building of Canada's
brand on the island. To be successful, Ottawa may need to reallocate
human and financial resources from other regions to Canada Mission in
Havana.

Luckily, we have a little time to get this right. Because Congress
legally codified the Cuba embargo in the 1996 Helms-Burton Act, it will
formally have to remove it. What President Obama did on Dec. 17 was use
his executive authority to blow large holes in this restrictive
edifice. The transition period to full normalization of relations
provides Canada with a window of opportunity to recalibrate its
approach. This should not be wasted.

The U.S. government is implementing the Dec. 17 changes. U.S. businesses
are making their first trips the Havana. Bipartisan bills have been
introduced to remove the remaining restrictions. Each month, more
American business, brands and financial institutions will enter the
market and competition will steadily grow. Cuba is also changing. In
March 2014, its government passed a law to significantly strengthen its
foreign investment regime and make its economy more business-friendly.

The changes that will unfold in Cuba over the next five to 10 years
offer great opportunities for Canada. Yet, the new era requires new
responses. If Canada does not take the initiative, its interests will be
eroded and its brand will come to look as outdated as those pictures of
young Fidel and Che.

National Post

Eric Miller is a fellow at the Canadian Defence and Foreign Affairs
Institute.

Source: Eric Miller: If Canada wants to retain its advantaged position
in Cuba, it has to move fast | National Post -
http://news.nationalpost.com/2015/02/09/eric-miller-if-canada-wants-to-retain-its-advantaged-position-in-cuba-it-has-to-move-fast/