Has the son of Helms-Burton just been conceived?
The Canada-U.S.-Cuba nexus has once again raised its ugly head. Only this time it comes at a particularly delicate time for Prime Minister Mark Carney, and leaves him with some very difficult decisions to make.
Since Canada capitulated to U.S. pressure to deep-six the digital services tax, it's only fair that Washington should terminate its new Cuba policy of embracing third country economic sanctions. Now, what do you think the chances of that are?
Reportedly, the new Cuba regulations are part of a national security memorandum signed by U.S. President Donald Trump in late June. According to the White House directive, the executive branch seeks to end 'economic practices that disproportionately benefit the Cuban government or its military, intelligence, or security agencies or personnel at the expense of the Cuban people.' The Miami Herald is also claiming that U.S. sanctions will apply to any company (foreign or otherwise) providing 'direct or indirect support to companies directly or indirectly owned by the Cuban military.'
U.S. President Donald Trump, right, and U.S. Secretary of State Marco Rubio, center, appear to be putting a new squeeze on countries — like Canada — doing business with Cuba. U.S. Attorney General Pam Bondi, left, looks on during a cabinet meeting at the White House, July 8.
These so-called 'secondary sanctions' will punish foreign (read Canadian) companies from doing business with the Cuban government.
More specifically, it prohibits Canadian companies from engaging in commercial activities with Cuba's Revolutionary Armed Forces and its corporate affiliates GAESA (a conglomerate of companies) and Gaviota (a tourism company). But if they do so, and thus violate the new Trump measures, those businesses will then be subject to stiff financial penalties.
The chief objective is to disincentivize foreign investment in Cuba, to discourage tourism travel to the island, to cut off badly needed dollars to Havana (by going after tourism receipts) and to put foreign governments with ties to Cuba on notice. A policy such as this comes from the same U.S. place that spawned the damaging Cuban Democracy Act of 1992 and the anti-Cuba Helms-Burton Act of 1996.
There is no doubt that the principal driver of this tougher Cuba policy is the anti-Cuba hawk and U.S. Secretary of State Marco Rubio. It's a given that he will utilize every single waking moment trying to squeeze the life out of the island's population. This latest policy iteration is just another manifestation of America's long-standing Cuban economic strangulation strategy.
It doesn't hurt that Trump undoubtedly believes that tightening the screws on Cuba plays well politically to the Cuban-American crowd in south Florida. And that is particularly important at this moment in time as boatloads of Haitians, Venezuelans ad Nicaraguans — many facing deportation and an extraordinarily difficult future — are fighting mad at Republican members of Congress and rapidly jumping off the Trump electoral ship.
As far as I can tell, though, the new 'National Security Presidential Memorandum 5' regulatory changes to strengthen U.S. Cuba policy will negatively impact Canadian travel companies, airlines and hotels (typically joint ventures with the Cuban government). It will also target Toronto-based Sherritt International Corp. — Canada's largest foreign investor on the island — which has substantial interests in nickel mining, energy production and tourism.
Like the Helms-Burton Law, the Trump administration's new 'maximum pressure' campaign will further undermine already strained diplomatic relations with Canada and countries of the European Union. National governments will then have little choice, as they did in the mid-1990s, but to respond with reciprocal punitive measures of their own and to bring this matter before the World Trade Organization.
But how will Ottawa's response to Trump's extraterritorial application of U.S. regulations to Canada — or the 'externalizing' of the U.S. blockade of Cuba, if you will — impact the ongoing bilateral trade and security negotiations with Washington? More to the point: Can Carney seriously talk about 'elbows up' and all that while Canada effectively sits on its fanny and does nothing in the face of Trump's effrontery to Canadian sovereignty?
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I am worried that Carney's non-action in deference to Trump will undermine not only Canada's constructive and independent relationship with Cuba, but also our relations with the wider region. If Carney balks, he will wrongly differentiate himself from other Canadian prime ministers who stood up to the Americans on matters involving Cuba.
At any rate, I'm certain that someone in official Washington is thinking that this is the perfect policy prescription given Cuba's current dire economic and financial situation. They've no doubt convinced themselves that these new sanctions will push struggling Cubans over the edge and thus precipitate the gradual demise of the Cuban government. Indeed, the U.S. presidential memorandum doesn't even bother to hide the fact that this 'maximum pressure' strategy will remain in place 'until a transition government in Cuba' takes power.
There is no question that these tougher measures will make everyday life more miserable for the Cuban people. But they could also prove to be counterproductive: by pushing Cubans to seek greener pastures in the U.S., by galvanizing public support around the Cuban government and by isolating the U.S. from its Western allies and friends.
Anyway, I doubt that Trump really cares.
Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.
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