National Post

MY WEEK IN HAVANA

John Moore on the road ahead for Cuba.

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

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 rethinking 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 rethinking 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 reset 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.

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. American 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.

Miller: ‘Canada now supplies Cuba with 1 million visitors per year.’ If Canada wants to retain its advantaged position, it has to move fast

 ?? YAMIL LAGE / AFP / Gett y Imag es ?? A man wears a T-shirt displaying an American flag on a street in Havana.
YAMIL LAGE / AFP / Gett y Imag es A man wears a T-shirt displaying an American flag on a street in Havana.

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