US to Canada: Play With Cuba, You'll Pay

IN the late 1960s, former Canadian Prime Minister Pierre Trudeau was on a list of persons forbidden entry to the United States for desiring closer economic ties with Fidel Castro Ruz's Cuba, which the US was embargoing.

Now executives from a number of Canadian companies doing business in Cuba are contemplating the uncomfortable prospect that they, too, may soon be barred from crossing into the US.

A new law, signed by President Clinton on March 12, imposes sanctions on people or companies who buy, lease, or profit from property in Cuba confiscated from US owners after Mr. Castro came to power in 1959. The law may affect, for example, about a dozen Canadian companies mining nickel in Cuba.

"A lot of Canadians feel annoyed that this law puts a Canadian businessperson on the same list with terrorists... [like] Abu Nidal and Saddam Hussein," says John Kirk, a Cuba specialist at Dalhousie University in Halifax, Nova Scotia.

Four years ago, the US Congress extended an economic embargo of Cuba to include Canadian subsidiaries of US companies doing business in Cuba.

Despite this, two-way trade between Canada and Cuba has doubled to about C$600 million ($400 million) since 1994, making Canada Castro's largest international trading partner.

A bill, sponsored last year by Sen. Jesse Helms (R) of N.C. and Rep. Dan Burton (R) of Ind., aimed at crimping Canada's expanding trade with Castro. Mr. Clinton initially refused to sign it into law. But after the downing of a plane piloted by Cuban-Americans outside Cuban waters Feb. 24, he did.

Canadian business in Cuba is going so well that the law is unlikely to affect long-term plans for investment, analysts say. But it already has had the short-term effect of making Canadian company officials wary of raising their profile with US competitors who might sue them, Professor Kirk says.

One provision of the law permits US companies to sue in US courts foreign companies that might be, for example, extracting nickel from a mine that used to belong to a US company. The other key provision would permit the US immigration service to bar Canadian company executives from entering the US if their company's activities fell under the scope of the new law.

Canada is particularly concerned that this provision violates the North American Free Trade Agreement (NAFTA) by interfering with the free movement of businesspeople, Canadian officials told the Monitor.

Last week, Cuba raised the matter of the new US law before a hearing of the World Trade Organization in Geneva. The WTO initially condemned the law as breaking the organization's trade rules. In a WTO meeting in Geneva last Tuesday, Canada, Europe, Mexico, and a number of other countries joined Cuba in complaining bitterly about the law.

But analysts now say the US is probably on firm ground in contending that it is covered under a WTO national-security clause. US envoy Andrew Stoler told the WTO council that the US had to take "strong measures" after the downing of the aircraft by Cuba.

Canada and Mexico have already asked for talks with the US under the NAFTA, which several analysts say has much tighter national-security exclusions.

Another aspect of the fight over Cuba goes back to the Trudeau years. That is Canadian sovereignty. Under former Prime Minister Brian Mulroney, Canada was perceived as moving Canada too close to US policy on a range of matters. Staking a claim on trade with Cuba is one way for Canada to assert its independence in international affairs.

"For Canada, there is a definite symbolic aspect to our ties with Cuba," says John English, vice chairman of the Foreign Affairs Committee of the Canadian House of Commons.

"Dealing with Cuba has been a continuing source of problems between the US and Canada.

"But it is important for us to have a sense that we can act independently in the world - that we can have a foreign policy that is our own," Mr. English says.