Caribbean Trade Law and Development

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  • Caribbean Trade & Development News Digest – April 28 – May 4, 2019

    Caribbean Trade & Development News Digest – April 28 – May 4, 2019

    Welcome to the Caribbean Trade & Development News Digest for the week of April 28-May 4, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

    THIS WEEK’S HIGHLIGHTS

    This week, the CARICOM Council on Trade and Economic Development (COTED) held its 48th meeting, while the 19th Spe­cial Meet­ing of the CARI­COM Heads of Gov­ern­ment on Se­cu­ri­ty took place in Trinidad later in the week. On May 2, the US began enforcing Title III of the Helms-Burton Act of 1996 allowing US investors to bring claims against those found to be trafficking property confiscated by the Cuban government.

    The EU has launched a public consultation as part of its evaluation exercise of the CARIFORUM-EU Economic Partnership Agreement. The EU also released their proposal on WTO rules for ecommerce.  Meanwhile, the WTO announced a new fund to assist Least Developed Country members’ participation in fisheries subsidies talks.

    REGIONAL NEWS

    Cuba Denounces Intensification of US Blockade before WTO

    Prensa Latina: Cuba denounced in Geneva before the World Trade Organization (WTO) the intensification of the United States, following the activation of Title III of the Helms Burton Law, diplomatic sources say. Read more 

    Carnival hit with Helms-Burton lawsuit for using Havana terminal

    Travel Weekly: A company that owned the cruise terminal in Havana prior to its 1960 confiscation by the Castro government has filed suit seeking damages from Carnival Corp. Read more 

    Trust Deficit Hurting Agricultural Exports

    Jamaica Gleaner: Erasing the trust deficit between local farmers and the exporters who peddle their produce to the Jamaican diaspora in North America and the United Kingdom must be addressed as a matter of priority. Read more

    St. Vincent and the Grenadines hit by cattle shortage

    St Lucia News Online: Local butchers are scheduled to meet with Saboto Caesar, the minister of agriculture, on Monday, amidst claims that there is a cattle shortage in St Vincent and the Grenadines. Richard Gibson, owner of Midway Butchers, told SEARCHLIGHT this week that this country was experiencing a cattle shortage as a result of exports to Grenada. Read more 

    No need for alarm as regional labelling standards

    Jamaica Observer: A regional standard for the labelling of pre-packaged foods is currently being revised, and is being led by the Caricom Regional Organisation for Standards and Quality (CROSQ) – the regional standards development body. Read more 

    Take care of matters that are important to people – COTED Chair, CARICOM SG

    CARICOM: Barbados Minister in the Ministry of Foreign Affairs and Foreign Trade, the Hon. Sandra Husbands, wants Trade Ministers to take action on matters that will allow the people of the Region to actively feel the benefit of the CSME. Read more

    Regional rum industry looking to increase share of global market

    Nation News: CARICOM Trade Ministers approved a range of recommendations aimed at positioning the region’s rum industry to better take advantage of the global market. Read more 

    CARICOM urges US to maintain duty-free market access

    Dominica News Online: CARICOM Secretary-General, Ambassador Irwin LaRocque has expressed CARICOM’s interest in the renewal of legislation for the extension of the Caribbean Basin Trade Partnership Act (CBTPA) and the WTO waiver beyond December 2019 to allow continued duty-free access to the US market. Read more 

    Jamaica PM provides details of meeting with US president 

    JIS: Prime Minister, the Most Hon. Andrew Holness, says the recent meeting with President of the United States of America (USA), Donald Trump; and several Caribbean leaders provided a direct opportunity for the strengthening of bilateral and regional relationships. Read more 

    Trade Ministers support international competitiveness for regional rum industry

    Barbados Advocate: CARICOM Trade Ministers who met in Guyana this week, on April 29, approved a range of recommendations aimed at positioning the region’s rum industry to better take advantage of the global market. Read more 

    Implementation of CSME cannot be a shifting target- CARICOM Secretary-General warns COTED

    Kaieteur News: CARICOM Secretary-General, Ambassador Irwin LaRocque has called for consistent efforts of Regional Heads for the implementation of recommendations, towards the achieving goals set out under the Caribbean Single Market and Economy (CSME). Read more 

    Customs and Excise Department holds Asycuda sensitization workshop

    Searchlight: Direct trader input, faster clearance time, and increase in revenue collection are just some of the benefits of using ASYCUDA software. That’s the word from ASYCUDA Coordinator at the Customs and Excise Department, Samantha Robinson. Read more

    Bim in ‘new’ world battle, says Husbands

    Barbados Today: Barbados could soon find itself in another compliance battle with an international body over its trade and taxation practices, Minister in the Ministry of Foreign Trade Sandra Husbands told Parliament today. Read more

    Rowley: Robust regional security is essential

    Guardian (T&T): Fol­low­ing are the open­ing re­marks de­liv­ered by Prime Min­is­ter Dr Kei­th Row­ley at the 19th Spe­cial Meet­ing of the CARI­COM Heads of Gov­ern­ment on Se­cu­ri­ty cur­rent­ly tak­ing place in Port-of-Spain. Read more 

    INTERNATIONAL NEWS

    Does China really control Africa’s destiny?

    Devex: For decades, development partners from industrialized nations have relied on aid and foreign direct investment to finance infrastructure developments, stimulate economic growth, and build technical capacity. Countries such as the United States, United Kingdom, Canada, and Germany have, for many years, led the way in providing international support to developing economies. Read more 

    AU Commission prepares for single market launch in July

    The East African: The African Continental Free Trade Area will enter into force during the next African Union Summit slated for Niamey, Niger, in July. Read more 

    African countries urged to discuss modalities as AfCFTA edges closer to effect

    Xinhua: The United Nations Economic Commission for Africa (ECA) on Saturday urged African countries and pan-African institutions to prepare modalities as the African Continental Free Trade Agreement (AfCFTA) edges closer to entry into force. Read more 

    Malaysia: ASEAN’s e-commerce gateway to China

    The ASEAN Post: As we enter the Fourth Industrial Revolution and practically everything is moving online, the importance of e-commerce is heightened now more than ever before. E-commerce, in fact, is quickly becoming the primary mode of business and trade around the world – ASEAN included.  Read more 

    UN Chief to Address WTO General Council next week

    Business Standard: UN Secretary-General Antonio Guterres is to make a historic address to the General Council of the World Trade Organization (WTO) next week, the UN said here on Friday. Read more 

    Abe vows to seek WTO reforms at G20 Osaka summit

    NHK: Japan’s Prime Minister Shinzo Abe says he will raise the issue of reforming the World Trade Organization at the Group of 20 nations summit in Osaka in June. Read more 

    EU-Brazil trade should be more sustainable, 600 scientists say

    Euractiv: In an open letter, 600 European scientists and 300 indigenous groups are calling for the EU to insist on the respect for environmental and human rights standards in its current trade negotiations with Brazil. EURACTIV Germany reports. Read more 

    EU vows to respond to US sanctions to protect companies in Cuba

    Euractiv: The European Union is ready to counter potential US sanctions against European companies in Cuba, the bloc’s top diplomat said on Thursday (2 May), following Washington’s reactivation of parts of the legislation that would allow US citizens to file lawsuits against investors in the island. Read more 

    Ecommerce on agenda at WTO Delhi meet

    Economic Times: E-commerce negotiations at the multilateral level will be a key area of talks at the informal World Trade Organization (WTO) ministerial meeting which will take place in Delhi later this month. Read more 

    Pence: tariffs part of enforcement in a US-China trade deal

    Yahoo News: The removal of tough US tariffs on Chinese goods will be part of enforcing any new trade deal between Beijing and Washington, US Vice President Mike Pence said Friday. Read more 

    EU releases proposal on new WTO rules for electronic commerce

    EU: The EU has today made public its text proposal on future rules and obligations on e-commerce as part of WTO negotiations on e-commerce endorsed by Ministers in the margins of the Davos World Economic Forum in January 2019. The release of the text proposal is part of the EU’s commitment to transparency and inclusiveness in the development of its trade policy. Read more 

    Trump Gave the Japanese Prime Minister a Break on Trade, For Now

    TIME: President Donald Trump did Japanese Prime Minister Shinzo Abe a favor last week, delaying the start of negotiations on a tricky trade decision, potentially pushing it past that country’s elections in July, three officials briefed on the talks tell TIME. Read more 

    Mexico will not accept more labor enforcement in new NAFTA, top official says

    Politico: A top Mexican official delivered an ultimatum to Democrats on Friday, saying the country will not accept a stronger labor enforcement mechanism in the new North American trade pact and will not support reopening the deal to further negotiation. Read more 

    US boosts exports to Ghana with new framework agreement

    Global Trade Review: The export credit agencies (ECA) of the US and Ghana have signed a US$300mn agreement to support the procurement of US goods and services by Ghanaian SMEs.  Read more 

    79-Nation ACP Group Must Guard Against Lack of Unity

    IndepthNews: The prospect of Brexit, the United Kingdom’s departure from the European Union, continues to loom large over the African, Caribbean and Pacific (ACP) group of countries. If a no-deal Brexit happens in October, this could mean severe consequences for the ACP. Read more 

    Africa Continental Free Trade Area to enter into force in July

    CGTN: The African Continental Free Trade Area will officially enter into force during the next Extra-Ordinary Heads of State and Government summit slated for 7th July 2019 in Niamey, Niger. Read more 

    Mexican Congress Passes Labor Law Tied to USMCA Trade Agreement

    Bloomberg: Mexico’s Senate approved an overhaul to the country’s labor code, a move that U.S. House Democrats made a pre-condition for debating a successor to the Nafta trade deal. Read more 

    ‘Productive’ end to latest round of US-China trade talks

    South China Morning Post: The latest round of trade negotiations between China and the United States concluded on Wednesday, with US Treasury Secretary Steven Mnuchin describing the talks as productive. Read more 

    What’s at Stake and at Risk in the U.S.-Japan Trade Talks

    Fortune: More than two years after U.S. President Donald Trump walked away from a regional Asia-Pacific trade agreement, the U.S. and Japan — the world’s largest and third-largest economies — are negotiating a deal of their own. Both sides insist they want a “win-win” outcome, but as evidenced by the Trump administration’s tariff battles with China and the European Union, there’s also potential for serious economic damage if things go bad. Read more 

    Canadian and Japanese leaders tout benefits of Pacific trade deal that Trump abandoned

    Reuters: The leaders of Canada and Japan on Sunday touted the benefits of a Pacific trade deal that U.S. President Donald Trump walked away from and said the pact should serve as a model for future agreements. Read more 

    EU belittles U.S. claims as ‘frankly childish’ at WTO Airbus hearing

    Reuters: A European Union trade lawyer fired withering put-downs at U.S. claims for damages due to subsidies for European planemaker Airbus in a recording of a dispute hearing made available by the World Trade Organization (WTO) on Tuesday. Read more

    Free trade and WTO face tests on many fronts

    Asia Times: In the era of Trump, tariff wars and Brexit, a widely-overlooked ruling early this month at the World Trade Organization looks set to place that organization under US threat, at a time when the world is receding ever further into an era of managed trade. Read more 

    EU court backs use of trade tribunals to protect foreign investors

    Reuters: The European Union won backing from the bloc’s top court on Tuesday for its system to protect foreign companies, which proponents say is essential for future trade agreements but critics say unfairly favors multinationals. Read more 

    New NAFTA’s sunset clause is a ticking time bomb

    The Hill: The United States, Mexico and Canada just finished renegotiating the North American Free Trade Agreement (NAFTA), but the future of the new NAFTA remains uncertain. Read more 

    WTO NEWS

    DG Azevêdo announces new fund to help LDCs participate in fisheries subsidies talks

    At a meeting of the full WTO membership on 3 May, Director-General Roberto Azevêdo announced that a new WTO trust fund has been established to support least developed countries to take part in negotiations on fisheries subsidies over the coming months, ahead of the end-of-year deadline for this work agreed by members. Read more

    Aid for Trade Global Review 2019 registration now open

    Registration is now open for the Aid for Trade Global Review 2019, to be held from 3 to 5 July under the theme “Supporting Economic Diversification and Empowerment” at the WTO’s headquarters in Geneva. The Global Review will discuss how Aid for Trade supports economic diversification and empowerment, with a focus on eliminating extreme poverty, particularly through the effective participation of micro, small and medium enterprises, women and youth. Read more

    10 years of WTO monitoring — enhancing trade policy transparency and predictability

    Following the outbreak of the 2008 global financial crisis, WTO members tasked the WTO Secretariat with the mission to prepare regular updates on the latest trends in the implementation of new trade and trade-related measures and on important developments in trade policy-making. Launched in early 2009, the trade monitoring exercise successfully continues to this day, having delivered 23 WTO-wide and 20 G20 trade monitoring reports over the past decade. Read more 

    WTO opens online registration for 2019 Public Forum

    Online registration for the 2019 Public Forum is now open. The main theme of this year’s event, to be held at the WTO’s headquarters from 8 to 11 October, is “Trading Forward: Adapting to a Changing World”. Registration closes on 16 September 2019. Read more 

    Azevêdo: E-commerce moratorium has long been a feature of the multilateral trading system

    Addressing a workshop on the moratorium on customs duties on electronic transmissions on 29 April, Director-General Roberto Azevêdo said the digital economy and the e-commerce moratorium have been an important focus of conversations for many WTO members, particularly since the Buenos Aires Ministerial Conference in 2017.  Read more 

    Members adopt national security ruling on Russian Federation’s transit restrictions

    The Dispute Settlement Body (DSB) on 26 April formally adopted a panel ruling clarifying the use of national security exceptions to WTO rules as invoked in the trade dispute between the Russian Federation and Ukraine over transit restrictions. Read more

    The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • EU Commission Launches CARIFORUM-EU EPA Public Consultation

    EU Commission Launches CARIFORUM-EU EPA Public Consultation

    The European Commission on April 17, 2019 launched an evaluation of the CARIFORUM-EU Economic Partnership Agreement (CARIFORUM-EU EPA) which governs trade between the current EU-28 and CARIFORUM countries. The CARIFORUM-EU EPA has been provisionally applied since 2008.

    Part of this evaluation exercise involves a public consultation in which stakeholders both in the EU and CARIFORUM countries, which are directly affected by the Agreement, are encouraged to contribute to the consultation. They can do so by completing a questionnaire online. The deadline for submission of responses to the survey is June 28, 2019, while the evaluation will take place between April 17, 2019- July 10, 2019.

    Stakeholders include businesses, business organisations and chambers of commerce, workers’ representatives and trade unions, citizens/individuals, workers, consumers, public authorities, NGOs and other civil society organisations, academia, research institutions, experts and think tanks from the EU and CARIFORUM.

    For further information and to complete the questionnaire, visit here.

  • Caribbean Trade & Development Digest – April 21-27, 2019

    Caribbean Trade & Development Digest – April 21-27, 2019

    Welcome to the Caribbean Trade & Development Digest for the week of April 21-27, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

    THIS WEEK’S HIGHLIGHTS

    This week, Caribbean representatives were among 5,000 delegates from around the world who attended the Second Belt and Road Forum for International Cooperation in Beijing April 25-27, 2019. The key note speech delivered by President Xi Xinping of China may be viewed here, while the Joint Communique of the Leaders’ Roundtable may be accessed here.

    REGIONAL NEWS

    Jamaica’s annual exports up by one-third

    Jamaica Gleaner: Jamaican exports grew by nearly 38 per cent last year, a pace that was nearly four times faster than the rise in imports. Read more 

    EU blacklisting causing irreparable harm to Caribbean says St Kitts-Nevis foreign minister

    Caribbean News Now: St Kitts and Nevis wasn’t blacklisted by the European Union in a revised blacklist for tax havens outside the EU last month; however, that hasn’t stopped foreign affairs minister Mark Brantley denouncing what he considers unfair targeting of Caribbean countries. Read more

    Closer EU-Caribbean ties mean greater prosperity for all

    EU Observer: This month ministers and officials from across the Caribbean assembled in Jamaica to discuss the future of our collective relationship with the European Union. This was the latest in a series of forums that have taken place in the past eighteen months, all with the aim of working toward a bolstered agreement that will further integrate our political and economic interests. Read more 

    Renewable energy is making its way into Guyana’s agriculture sector

    IICA: A pilot project by the Inter-American Institute for Cooperation on Agriculture (IICA), the Organization of American States (OAS), and the state-owned company, Guyana Power & Light Inc., will promote the adoption of renewable energy in the Guyanese agriculture sector. The project will unfold in the final six months of 2019. Read more 

    China says Latin America and Caribbean will benefit significantly under BRI

    Jamaica Observer: China’s Ambassador to Dominica Lu Kun says his country’s Belt and Road Initiative (BRI) will bring tangible benefits to Latin America and the Caribbean (LAC). Read more 

    Ghana and Suriname sign four agreements

    Government of Ghana: Ghana and Suriname on Tuesday signed four separate agreements as part of efforts to strengthen the bilateral relations between the two nations. Read more 

    ITFC signs 6 trade deals worth over $1.1bn, including with Suriname

    Trade Arabia: ITFC’s framework agreement with the Republic of Suriname will see it mobilize up to $75 million financing for SME’s, exports and lines of finance to local banks, in addition to a Murabaha agreement over three years to boost the import of essential goods. Read more 

    King Sugar takes a break as Belize exports fall sharply

    Breaking Belize News: Belize’s number one export is grinding into high gear for the end of the season in May and June. But in March it counted for just under three million of Belize’s almost $26 million in exports, representing a slash by more than half of March 2018’s total. Read more 

    China and the Caribbean’s future 

    CGTN: China’s highly anticipated second Belt and Road International Cooperation Forum (BRF) wrapped up on April 27. Initially not including Caribbean nations, the country’s signature policy has gained increasing momentum in the region since 2017. So far, several Caribbean countries, such as Barbados, Jamaica, Dominica and Grenada, etc., have signed up to the initiative, which provides a useful context for offering some reflections on the place of China in the future development of the independent states of the English-speaking Caribbean. Read more 

    COTED officials hold preparatory meeting

    CARICOM: Work in preparation for the Forty-Sixth Ministerial Meeting of the Council for Trade and Economic Development (COTED) began on Thursday. Read more

    CARICOM leaders to meet in Trinidad next week

    CARICOM: Caribbean Community (CARICOM) leaders will meet in Trinidad and Tobago early next month to discuss security issues within the 15-member regional integration movement. Read more 

    Future EU-Caribbean Relations in New ACP-EU Partnership

    ACP: As the EU is working to modernise its relations with 79 countries in Africa, the Caribbean and the Pacific (ACP), the two groups’ chief negotiators Neven Mimica and Robert Dussey met with ACP Caribbean leaders for a dedicated dialogue on the regional EU-Caribbean pillar in the framework of the post Cotonou ACP-EU partnership. Read more 

    INTERNATIONAL NEWS

    Eswatini walking tightrope to become Africa’s trade hub

    Yeni Safak: The Kingdom of Eswatini in Southern Africa is walking a tightrope in its bid to become Africa’s trade hub and is competing against some of the continent’s biggest economies to win hosting rights for the African Continental Free Trade Area (AfCFTA) Secretariat. Read more 

    AfDB signs $50m agreement with Natixis to boost trade finance in Africa

    Ghanaweb: The African Development Bank (AfDB) has signed a $50 million risk participation agreement (APR) with investment and corporate bank Natixis. Read more 

    EU and Japan in delicate trade talks

    EU Observer: Top EU officials will meet Japanese prime minister Shinzo Abe on Thursday (25 April) in Brussels as world leaders prepare for their G20 meeting in June in Osaka, Japan. Read more 

    USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Piracy and Counterfeiting

    USTR: The Office of the United States Trade Representative today released its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights and the findings of its Notorious Markets List, which highlights online and physical markets that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. Read more 

    Turkey-Africa trade volume totals $179 billion in last decade

    Daily Sabah: Turkey’s improving relations with African countries have also been reflected in the growing trade volume. Between 2009 and 2018, bilateral trade volume between Turkey and the African continent stood at $179 billion. Read more 

    P&O sues over £33m Eurotunnel payout in Brexit ferry fiasco

    The Guardian: P&O Ferries is suing the government over its £33m settlement with Eurotunnel, in the latest controversy over the Department for Transport’s fraught no-deal Brexit preparations. Read more 

    Amid Brexit uncertainty and allegations, UK lawmakers consider Mueller-like inquiry

    ABC News: The parallels between Russian meddling in the U.S. presidential election and the Brexit referendum in Britain are striking. In fact, calls among lawmakers have been growing for a public inquiry, according to The Guardian, into Prime Minister Theresa May’s Brexit strategy. Read more 

    ‘Running OUT OF TIME’ – EU expert issues DAMNING statement on May’s latest extension

    Express: Although Mrs May has managed to buy some valuable time to get her Brexit deal through, the UK is only just coming to the end of the beginning of the whole process. Dr Simon Usherwood, deputy chair at The UK in Changing Europe think tank, has argued that with every extension, the UK is cutting into the crucial transition stage of the Brexit negotiations. Read more 

    U.S. organized labor opposes USMCA in current form, says official

    Japan Times: The head of the largest U.S. labor union said Tuesday he opposes ratification of the new North American free trade pact, because he doubts Mexico will enforce labor reforms required by the deal. Read more 

    U.S. considers concessions on drug protections in China talks: Sources

    BNN Bloomberg: The Trump administration may concede to a Chinese proposal that would give less protection for U.S. pharmaceutical products than they receive at home, according to people familiar with the matter, a move that could draw opposition from the American drug industry. Read more 

    U.S. and Japan Push for a Trade Deal Following Failed Pacific Partnership

    New York Times: President Trump said on Friday that trade talks between the United States and Japan were “moving along very nicely” and suggested a deal might be reached by late May as he met with Shinzo Abe, the Japanese prime minister, at the White House. Read more 

    Donald Trump pulls US out of UN Arms Treaty

    Euronews: Donald Trump has said he is pulling the United States out of an international arms treaty designed to prevent weapons being sold to those who abuse human rights. Read more 

    Qatar withdraws measures established against UAE at WTO

    Al Arabiya: Qatar has decided to withdraw its measures against the UAE in a significant concession aimed at averting the consequences of the UAE’s case in WTO against an illegal Qatari ban on UAE goods and services. Read more 

    U.S. says WTO national security ruling ‘seriously flawed’

    Reuters: The United States said on Friday a World Trade Organization ruling on national security was “seriously flawed”, a warning not to use it as a precedent to judge U.S. President Donald Trump’s tariffs on imported steel and cars. Read more 

    Japan seeks to join WTO dispute consultations over India’s import duties on ICT products

    Business Today: Japan has expressed interest to join consultations in a dispute case filed by the EU in the WTO against India’s import duties on some information and communications technology products, including mobile phones, according to a communication of the World Trade Organization. Read more

    Wine, beef imports rise after free trade pacts

    NHK: Japan’s Finance Ministry says wine and cheese imports from Europe, and beef imports from Canada and New Zealand, increased considerably up to March after two free trade deals came into effect. Read more

    WTO NEWS

    WTO Forum looks at addressing food safety concerns through trade and cooperation

    WTO rules on food safety play an important part in enabling governments to protect their citizens while ensuring trade can play its critical part in maintaining timely supplies of safe and affordable food, said Director-General Roberto Azevêdo in opening the International Forum on Food Safety and Trade taking place at the WTO on 23-24 April. Read more 

    DDG Wolff suggests members look at accessions as source of inspiration for WTO reform

    Is there scope for members to look at the experience of WTO accessions for additional inspiration in the ongoing WTO reform debate, asked Deputy Director-General Alan Wolff at a meeting of the Informal Group of Acceding Governments on 25 April. Read more

    DDG Wolff welcomes timely and substantive discussions on trends in food safety and trade

    Speaking at the pre-event session of the International Forum on Food Safety and Trade on 23 April at the WTO, Deputy Director-General Alan Wolff stressed the importance of interlinkages between trade and food safety standards, as recognized by WTO members in the Sanitary and Phytosanitary Measures Agreement. Read more 

    International Forum on Food Safety and Trade

    Remarks by WTO Director General Roberto Azevedo. Read more

    The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

     

  • Helms-Burton and CARICOM-Cuba Trade

    Helms-Burton and CARICOM-Cuba Trade

    Alicia Nicholls

    Last week (April 17, 2019), United States (US) Secretary of State, Mike Pompeo, announced that the US will for the first time enforce the provisions of Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996. Title III gives US citizens, who were owners of private properties in Cuba confiscated by the Cuba Government following the 1959 revolution, the right to bring claims against foreign individuals and entities utilizing or deriving economic benefits from those confiscated properties.

    Because of the threat of legal challenges being brought by third States before the World Trade Organisation (WTO), President Bill Clinton, as well as his successors President George W. Bush and President Barack Obama never enforced Title III. However, the Trump Administration has indicated that it will start enforcing these provisions with effect from May 2, 2019.

    Given the extraterritorial nature of this development, this article briefly explores what possible implications this development may have for CARICOM firms which currently trade or invest in Cuba or are seeking to do so.

    Background 

    The LIBERTAD Act, more commonly known as the Helms-Burton Act, gives legislative force to the commercial, financial and economic embargo which the US has imposed on Cuba since the 1960s to force regime change in that Caribbean country. It is an embargo which the international community has condemned as illegal, immoral and ineffective.

    Title III (Protection of Property Rights of United States Nationals) of the Helms Burton Act gives US nationals, whose property was confiscated (that is, nationalised or expropriated) by the Government of then Cuban leader Fidel Castro following the Cuban Revolution of 1959, the right to bring an action in US federal courts against any person who “traffics” in confiscated property.

    Three main things should be noted here. Firstly, the definition of “traffics”, as used in Title III, is broad. It includes for example not just selling, transferring, etc confiscated property, but engaging in a commercial activity using or otherwise benefiting from confiscated property, inter alia.  This means, for example, that the US owner of a piece of property, such as a hotel plant, confiscated by the Castro Regime, can bring an action  in the US courts against any foreign firm which uses that hotel plant or even more nebulously, “engages in a commercial activity using or otherwise benefiting from” that hotel plant.

    Secondly, claims can also be brought by persons who were not US nationals at the time their property was confiscated, which would include Cuban-Americans who are now naturalized US citizens. This, therefore, potentially increases the number of claims that could be brought. According to the US Department of Justice’s data, the US Foreign Claims Settlement Commission adjudicated a total of 8,821 claims in the Cuba program, of which it found 5,913 to be compensable.

    Thirdly, the Act is extraterritorial in reach. It empowers US citizens who are owners of confiscated property to bring claims in US courts against any “person” who traffics in said confiscated property. The term “person” is defined in the Act as “any person or entity, including any agency or instrumentality of a foreign state.” Moreover, under Part IV (Exclusion of Certain Aliens) foreign nationals and their spouses and minor children may be barred from entry into the US if found to have converted confiscated property for personal gain or traffic in confiscated property.

    These draconian provisions are meant to act as a deterrent to businesses from third States seeking to invest or do business in Cuba, in an effort to undermine  the Cuban economy. They are also a fetter on the sovereignty of third States wishing to trade with Cuba, which raises questions about their compatibility with international law, and more specifically, international trade law.

    Indeed, back in the mid-1990s, the EU had sought to challenge the compatibility of the Helms-Burton with WTO rules. This challenge was withdrawn after President Clinton agreed to suspend the right to private action under Title III. The Act allows the President to suspend Title III for up to six months at a time if deemed to be in US national security interests. Presidents Bush II and Obama also suspended this right of private action. In fact, the Obama administration saw an attempt at the normalization of US-Cuba relations, including the resumption of diplomatic ties. The Trump Administration, however, has taken a hard lined stance on Cuba. In January 2019, the US Department of State released a statement indicating they would only give a 45 day extension of the Title III suspension while undertaking a “careful review”. This ultimately led to the decision of April 17, 2019 to no longer suspend Title III.

    Possible Implications of Helms-Burton Right of Action on CARICOM-Cuba Trade

    What does this development mean for CARICOM-Cuba trade potentially? CARICOM countries and Cuba have a long history of cooperation and friendship, most notably in the areas of education, health and culture. Turning to trade, CARICOM has a bilateral partial scope trade agreement with Cuba known as the Trade and Economic Cooperation Agreement (TECA) which was signed in 2000. It is a partial scope agreement in that it liberalizes trade between a limited number of goods between the parties, with the contemplation that a free trade agreement would eventually be negotiated. It also includes limited provisions on cooperation in other trade-related areas. Although a second protocol to the Agreement was signed in 2017, including an expansion of the list of goods, no free trade agreement exists as yet.

    Regrettably, detailed statistics on the level of CARICOM-Cuba trade or CARICOM firms’ level of foreign direct investment (FDI) into Cuba have been difficult to obtain. According to an ECLAC study entitled “An Assessment of the Performance of CARICOM Extraregional Trade Agreements” published in 2015, Cuba was the destination for 0.11% of CARICOM exports in 2013. According to a June 2018 press release from the Trinidad & Tobago Ministry of Trade and Industry, “Trinidad and Tobago is currently Cuba’s largest CARICOM trading partner, recording 80% of trade in the region”. Reporting from the Guardian Newspaper of Trinidad reveals that Trinidad & Tobago “ex­port­ed an es­ti­mat­ed $456 mil­lion in goods to Cu­ba in 2016 and im­port­ed $37 mil­lion worth of prod­ucts” and Trinidad is one of Cuba’s biggest trading partner in the LAC region.

    Although CARICOM-Cuba merchandise trade remains small, the Obama-era roll-backs saw increased interest on the part of CARICOM firms in exploring Cuba as a potential market. Caribbean countries have established or sought to establish trade liaisons in their Cuba-based diplomatic missions. The establishment of a direct air link via the Trinidad & Tobago-based Caribbean Airlines also made it easier for tourism and scoping out business opportunities.

    Regrettably, the current US administration’s  hardened stance potentially creates a cloud of uncertainty for CARICOM firms currently doing business or seeking to do business in Cuba. Once Title III goes into effect, Caribbean firms found to be dealing in confiscated property could be exposed to costly litigation before US courts and persons found liable face possible barred entry of themselves and their immediate families to the US. Extra-regionally, some countries, such as Canada’s Foreign Extraterritorial Measures Act (FEMA) and the EU’s Blocking Statute, bar the enforcement and recognition of US judgments under Title III of the Helms-Burton Act. I am uncertain whether any Caribbean country has a similar Act, and this is something on which CARICOM firms should seek counsel from their attorneys-at-law.

    It should be noted that those firms which would be most likely impacted would be US firms which invested in Cuba during the Obama-era détente, as well as European firms which have substantial business interests in Cuba, notably in the tourism sector. For this reason, it is no surprise that the EU, Canada, UK and Mexico have strongly condemned this latest action by the Trump Administration. The EU has stated that it would “consider all options at its disposal to protect its legitimate interests, including in relation to its WTO rights”.

    As I noted earlier, the extraterritorial application of the US Helms-Burton Act is of questionable legality under international law and meant to scare businesses from investing in Cuba in an effort to cripple the Cuban economy. Therefore, I am by no means advocating that CARICOM firms should stop investing in Cuba. What they should do, however, is to pay careful attention to this development and seek legal advice from their attorneys to ascertain and mitigate any current or potential areas of legal exposure.  For example, they should ascertain whether any property from which they are seeking to benefit commercially, is currently subject to a US claim. That said, however, the prospects of legal challenges before the WTO, as well as the upcoming US presidential election due in 2020, means that the durability of this policy reversal is not guaranteed.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.