Caribbean Trade Law and Development

Tag: cuba

  • What’s Happened in Trade since December 2020?

    What’s Happened in Trade since December 2020?

    Alicia Nicholls

    Happy New Year to all of our readers! Since our last Caribbean Trade & Development News Digest was published near the end of December 2020, some major trade developments have occurred. If you missed any of these developments, we will bring you up to speed with the top ones in this article!

    UK-EU begin trading under new trade arrangements

    The United Kingdom (UK) and European Union (EU) received the Christmas present they both wanted. On Christmas Eve (December 24) 2020, political agreement was reached on their future trading terms before the Brexit transition period deadline of December 31, 2020. The deal averts the no-deal scenario, that is, trading on World Trade Organization (WTO) Most Favoured Nation (MFN) terms. Such a scenario would have caused, among other things, the reintroduction of tariffs. This would have been disastrous for both parties, and is a circumstance both sides sought to avoid at all costs, even as contingency plans were put in place in case of the worst case scenario.

    The new EU-UK Trade and Cooperation Agreement covers not just trade and investment, but also deals with issues such as competition policy, fisheries, State aid, tax transparency, among other areas of mutual interest. January 31, 2021 marked the start of the EU-UK’s new trading arrangement. Of course, implementation of the new arrangements have not been without their kinks, including border delays due to the reintroduction of customs checks.  

    The UK-CARIFORUM EPA, which rolls over the provisions of the EU-CARIFORUM, now governs trade between the UK and CARIFORUM countries. The EU-CARIFORUM EPA, of course, remains in effect as between CARIFORUM countries and the remaining EU-27. It remains to be seen what practical impact the new EU-UK trading arrangement may have on CARIFORUM’s trade with the EU and UK respectively, including on supply chains.

    Trading under AfCFTA begins

    Originally slated for July 1, 2020, but delayed due to the COVID-19 pandemic, trading under the Africa Continental Free Trade Agreement (AfCFTA) has officially started from January 1, 2021. A special ceremony marking the Start of Trading was held to mark this historic occasion and the recording may be viewed here.

    The AfCFTA is a landmark trade agreement comprising 54 African countries, with an integrated population of 1.3 billion people and a combined GDP of US 3.4 trillion. It is second only to the WTO as the world’s largest trade agreement. While full implementation of the AfCFTA is not expected for some time, it is expected to help boost economic development on the continent.

    A recent PWC report highlights the ways the AfCFTA could assist African countries in their COVID-19 economic recovery. These include providing the opportunity to reconfigure supply chains, allowing for greater intra-regional sourcing of goods, such as pharmaceuticals, thereby reducing dependence on third countries.

    CARICOM-Africa relations continue to develop and it was announced that the African Union (AU) has offered CARICOM access to approved COVID-19 vaccines from a shipment the AU recently secured.

    EU-China reach agreement in principle on Comprehensive Agreement on Investment (CAI)

    On December 30, 2020, it was announced that the EU and China had reached agreement in principle on the text of a Comprehensive Agreement on Investment (CAI). While the text does not appear to be public as yet, the agreement is said to cover market access for EU and Chinese investors respectively, sustainability commitments and provision for State-to-State resolution of disputes arising under the agreement. The EU and China also commit to try to complete negotiations on investment protection and investment dispute settlement within two years of the agreement’s signature.

    US Section 301 investigations on Vietnam currency valuation and on DSTs

    In December, the US Department of the Treasury designated Vietnam as a currency manipulator. According to the USTR, Vietnam currently enjoys a $55 billion dollar merchandise trade surplus with the US, but a $1.2 billion services trade deficit. In the report on its Section 301 investigation of Vietnam’s acts, policies, and practices related to currency valuation, the USTR concluded that in their totality, they were “unreasonable and burden or restrict US commerce”, but stopped sort of recommending punitive tariffs.

    On the digital services tax front, the USTR has suspended retaliatory duties on French luxury goods, until further notice, which were scheduled to have taken effect on January 6, 2021. On another note, the USTR’s section 301 investigations on digital services taxes adopted by several other countries, including Italy, India and Turkey, found that these countries had placed “unreasonable or discriminatory and burdens or restricts U.S. commerce” but did not recommend any retaliatory action as yet.

    A new direction for US trade policy?

    On January 20, Joseph R. Biden will be sworn in as the 46th president of the US, and it is widely anticipated that this will herald a change from the outgoing administration’s often chaotic trade policy.

    In a key note speech delivered last week, Katherine Tai, the nominee for United States Trade Representative (USTR), provided some idea of the incoming Biden administration’s trade policy priorities, of which China and the USMCA remain foremost. Notable was that there was no mention in Ms. Tai’s speech of the WTO, including the current impasse on the appointment of a Director-General or the Appellate Body crisis. However, further information on the Biden administration’s trade policy priorities and disposition will be gleaned when the USTR releases its report on the President’s trade agenda, expected sometime in February.

    Without doubt, domestic issues, such as COVID-19 vaccine roll-out and economic recovery, are expected to absorb much of the administration’s policy agenda within the first 100 days. Biden has proposed a $1.9 trillion-dollar stimulus package to combat the COVID-19 pandemic and its economic fall-out. Climate change is also one of the policy priorities and Biden has indicated that the US will rejoin the Paris Climate Agreement.

    Despite the outgoing Trump administration’s limited cooperation with the President-elect’s transition team, fate appears to have dealt Biden some fortune on the legislative front. With both Houses of Congress controlled by Democrats (albeit a slim majority in the case of the Senate), Biden should have some breathing space to get his policy agenda enacted, at least for the first two years of his administration.

    US redesignates Cuba as a State Sponsor of Terrorism

    The outgoing Trump administration’s State Department has redesignated Cuba as a state sponsor of terrorism (SST) for allegedly “repeatedly providing support for acts of international terrorism in granting safe harbor to terrorists”. Cuba had been delisted in 2015 under the Obama Administration as part of that administration’s attempts to normalize US-Cuba relations. However, the US’ illegal and unwarranted economic, commercial and financial embargo on Cuba, which requires Congressional action to remove, remains.

    The redesignation of Cuba as a SST is just the latest of several actions taken over the course of the Trump administration, which has seen a hardening of the US’ policies against the island nation. This included, for example, ending the suspension of Title III of the Helms-Burton Act. With regard to the trade implications of Cuba’s redesignation, which is extraterritorial in application, it penalises persons and countries engaging in certain trade with Cuba, bans defense exports and sales, and imposes certain controls on exports of dual use items.

    In a strong statement condemning this unilateral action taken by the administration, the Caribbean Community (CARICOM) argued that “Cuba’s international conduct does not in any way warrant that designation.” CARICOM also unequivocally condemned it as a “further attack on the country adversely affects its international standing and its social, human and economic development”.

    US President-elect Joe Biden, who had been the VP under the Obama administration and part of the efforts at rapprochement, has been critical of the Trump Administration’s handling of Cuba affairs. It remains to be seen what will be his administration’s approach to Cuba policy.

    Post-Cotonou Agreement Text faces opposition by some EU Member States

    Towards the end of last year, the EU and the Organisation of African, Caribbean and Pacific States (OACPS) announced political agreement on the text of a deal to succeed the Cotonou Agreement which was meant to have expired in December 2020. The post-Cotonou agreement is not a trade deal; trade between the EU and the OACPS is covered by the various Economic Partnership Agreements (EPAs). It is, however, the overarching framework for EU-OACPS relations and, therefore, covers EU-OACP cooperation on a variety of political and social issues.

    A Devex exclusive report released last week revealed that some EU states, particularly Poland and Hungary, expressed reservations with the proposed text, especially on the treatment of issues such as sexual education issues and migration and mobility.

    WTO Developments

    According to Bloomberg WTO reporting, in its final General Council meeting for the year held December 16-17, 2020, WTO members approved the WTO’s budget for 2021 and also decided that a Special General Council meeting will be held earlier this year to determine where and when the next Ministerial Council will be held. However, the US maintained its veto on the selection of Dr. Ngozi Okonjo-Iweala as the new Director-General. It remains to be seen whether the Biden administration will maintain the US’ current objection.

    The African Union, Cuba and African Union’s proposal on strengthening the WTO for promoting development and inclusivity was also one of the agenda items. At the meeting, WTO Members were unable to agree on the proposal advanced by several developing country members on amending the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement to facilitate developing countries’ access to COVID-19 vaccines. This week, the countries proposing the amendment released their responses to WTO Members’ questions on their proposal.

    In other developments, India was the first WTO Member to have its Trade Policy Review for 2021. Costa Rica has requested WTO dispute consultations with Panama regarding measures affecting strawberries, dairy products, meat products, pineapples and bananas.

    Caribbean Community (CARICOM) developments

    From January 1, 2021, Prime Minister of Trinidad & Tobago, the Hon Dr. Keith Rowley, has assumed chairmanship of CARICOM under its six-month rotating chairmanship. He took over from then outgoing chairman, the Hon. Dr. Ralph Gonsalves, Prime Minister of St. Vincent & the Grenadines. Dr. Rowley’s statement as incoming Chair may be viewed here.

    CARICOM has already had a busy start to the year. According to a press release from the Community, the Heads of Government last week held their 13th Special Emergency Meeting of the Conference and under Prime Minister Rowley’s chairmanship. Among other things, they received an update on the Caribbean Economic Recovery and Transformation (CERT) Plan.  

    CARICOM IMPACS and the Small Arms Survey signed a Memorandum of Understanding to Reduce Gun Violence in the Caribbean, including support efforts to improve CARICOM Member States’ to prevent the illicit circulation of small arms and light weapons.

    The CARICOM Committee of Ambassadors also met later last week and among other things, reviewed plans for the Thirty-Second Inter-Sessional Meeting of the Conference of Heads of Government slated for 23-24 February 2021. The Community Council of Ministers also convened to, inter alia, advance preparations for the Intersessional Meeting and to approve the CARICOM Secretariat’s Budget for the financial year 2021-22.

    The Secretariat has since the start of the year already released separate statements condemning the US’ designation of Cuba as a State Sponsor of Terrorism and repudiating any Venezuelan aggression in the escalating Guyana-Venezuela border dispute. The latter statement was in response to a statement released by the Maduro Government on January 7, announcing the creation of a so-called “Territory for the development of the Atlantic Façade” in the disputed Essequibo region of Guyana over which Venezuela has repeatedly claimed as part of its territory. An interesting development is that the Brazilian Government has expressed support for Guyana in the matter.

    In its statement demanding greater equality in COVID-19 vaccine dissemination, CARICOM has called for a global summit in the context of the World Health Organisation’s (WHO) ACT-A Facilitation Council to discuss equitable access and distribution of the COVID-19 vaccines.

    Now you are all caught up! We look forward to continuing to follow these developments and more throughout the course of what promises to be a critical year for trade.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. All views herein expressed are her personal views and should not be attributed to any institution with which she may from time to time be affiliated. You can read more of her commentaries and follow her on Twitter @LicyLaw.

  • Final Declaration of the 7th CARICOM-CUBA Summit Meeting

    Final Declaration of the 7th CARICOM-CUBA Summit Meeting

    From the CARICOM Secretariat:

    We, the Heads of State and Government of the Caribbean Community (CARICOM) and the Republic of Cuba, gathered via videoconference on 8 December, 2020, on the occasion of the 7th CARICOM-Cuba Summit held in commemoration of the 48th anniversary of the diplomatic relations between the four CARICOM independent States and Cuba and the 18th anniversary of CARICOM-Cuba Day;

    Proud of our shared Caribbean identity and the progress of our political and cooperative relations that have been strengthened by our arrangements, exchanges and coordination at international forums to the benefit of our peoples, and guided by the principles of solidarity and complementarity;

    Recalling the Declarations of our Summits of Havana in 2002, Bridgetown in 2005, Santiago de Cuba in 2008, Port of Spain in 2011, Havana in 2014, and Saint Mary’s in 2017;

    Aware of our need to work together, particularly in the economic and environmental areas, for the sustainable development of our nations in a manner that helps us build more inclusive, just and equitable societies, and address our shared vulnerabilities as Small Island Developing States and countries with low-lying coastal areas;

    Deeply grieved by the loss of lives and concerned by the extensive socioeconomic effects of the COVID-19 pandemic and the devastating weather events that have worsened the multiple crises faced by mankind today;

    Welcoming the medical assistance provided to the Member States of CARICOM by the Government of Cuba in response to the COVID-19 pandemic

    Highlighting the importance of pooling our efforts in order to improve the productivity, infrastructure, and air and sea connectivity in our countries, and expand our economic and trade ties, through the implementation of the Revised CARICOM-Cuba Trade and Economic Cooperation Agreement; 

    Underlining the significance of consolidating the Community of Latin American and Caribbean States (CELAC) as a mechanism for political consultation, the promotion of our regional unity and integration, and the defence of our regional interests in international affairs and our relations with third-parties; and 

    Reaffirming the effectiveness of the Proclamation of Latin America and the Caribbean as a Zone of Peace, signed in Havana in January 2014.

    HAVE AGREED AS FOLLOWS:

    1. Reiterate that our regional unity and integration are based on our absolute respect for the Purposes and Principles enshrined in the United Nations Charter and International Law; in particular, the principles of sovereignty, self-determination, territorial integrity, non-interference in the internal affairs of States, peaceful settlement of disputes, the prohibition on the use or threat of force; as well as the promotion and protection of human rights for all.
    2. Underscore the importance of defending our regional unity for the preservation of the peace and stability of our countries.
    3. Welcome the outcomes of the 6th CARICOM-Cuba Meeting of Ministers of Foreign Affairs held in Georgetown, Guyana, on 14 June, 2019, which agreed on the need for more cooperation, as well as increased trade and investment.
    4. Reaffirm our will to strengthen South-South cooperation as an expression of solidarity, for the promotion of bilateral and regional programs, as well as triangular cooperation for development, with regard paid to national priorities.
    5. Express our will to continue to receive Cuban medical cooperation in recognition of its contribution to the wellbeing of the Caribbean people; in particular, its valuable human resources which were added to the fight against the COVID-19 pandemic.  We reject any attempt to discredit, distort or disrupt Cuban medical assistance, an important aid to the region and to Caribbean healthcare system.
    6. Share our best experiences in the management of the COVID-19 pandemic and other epidemiological conditions that are common to the Caribbean, and assess the possible application of innovative Cuban biotech medicines in the prevention and treatment of this pandemic.
    7. Recognize that the cooperation maintained between Cuba and the CARICOM Member States in the areas of health, human-resource training, construction, sports, education, environmental protection, and natural disaster risk reduction and mitigation, has effectively contributed to the development and wellbeing of our peoples.
    8. Continue the implementation of the Center for Stimulating the Development of Children and Young People with Special Educational Needs in Guyana.
    9. Maintain the exchanges so that the Regional School of Arts in Jamaica can start to operate.
    10. Acknowledge our commitment to finding avenues that promote our economic and commercial relations by identifying our strengths and possible complementarities, and by implementing and relying more on the Second Protocol to the CARICOM-Cuba Trade and Economic Cooperation Agreement.    
    11. Note that the Cuban economic model update, the Cuban foreign investment law and the Mariel Special Development Zone offer broad and additional opportunities for the intensification and reinforcement of the economic ties between CARICOM and Cuba.
    12. Recognize the promotion of sustainable tourism as one of the keys to economic development in the Caribbean region, and agree to strengthen our cooperation in this sector, including the implementation of multi-destination tourism in accordance with the terms of the Memorandum of Understanding between the Government of the Republic of Cuba and CARICOM States signed at the 6th CARICOM-Cuba Summit. 
    13. Emphasize that, given the scope of its impact, climate change represents one of the greatest challenges faced by our nations, the repercussions of which are particularly serious in developing countries; especially in Small Island Developing States.  For this reason, we commit to expanding our exchanges in the context of CARICOM and at relevant international agencies, in order to mitigate its adverse effects.
    14. Underline that adaptation to the impact of climate change constitutes an immediate and urgent global priority.
    15. Strengthen our cooperation in the protection of the environment and the sustainable use of our resources; in particular, those of the Caribbean Sea.  In this regard, we support the efforts made by the Association of Caribbean States to designate the Caribbean Sea as a “Special Area in the Context of Sustainable Development,” within the UN framework.
    16. Welcome the actions jointly implemented by our countries in order to reduce the risks of natural disasters and note the agreement signed between the Cuban Civil Defense Authority and the Caribbean Disaster Emergency Management Agency for the purpose of expanding and integrating our regional early warning systems.  We recognize the joint efforts made to train a number of Caribbean first-response bodies, as well as Cuban and Caribbean specialists in the management of responses to natural disasters.
    17. Renew our call for a review and modification of the current “graduation” criteria for the receipt of Official Development Assistance to properly reflect the realities and specific needs of the highly indebted middle-income countries; in particular, the Caribbean States, and to integrate the different dimensions of sustainable development included in the 2030 agenda, considering that the current criteria fail to reflect our actual levels of economic and social development or the multidimensional effects of poverty, inequality and vulnerability.
    18. Express deep concern over the inclusion of certain CARICOM Member States in lists of non-cooperative tax jurisdictions and call for a change in this approach which serves to negatively impact the economies of those countries that have shown their readiness to cooperate and engage in dialogue in order to find mutually advantageous solutions for the parties.
    19. Express deep concern over and rejection of the progressive decline in correspondent banking relations being experienced by developing nations; in particular, CARICOM Member States, due to the de-risking actions by some of the major international banking corporations, which threatens the financial stability of the affected countries and limits their efforts to achieve development and socioeconomic growth.
    20. Highlight the importance of reparation and compensation, as an act of justice, for the damages caused by slavery, indentured servitude and native genocide in the Caribbean.
    21. Reject the imposition of unilateral coercive measures and, in that context, call for an immediate and unconditional end of the economic, commercial and financial blockade implemented by the Government of the United States of America against Cuba, and the termination of the US persecution of Cuban financial transactions, the relentlessness of which has increased.  Reiterate our firm rejection of the enforcement of extraterritorial laws and measures, such as the Helms-Burton Act, which grossly violate International Law and undermine the sovereignty and interests of third parties.
    22. Express our gratitude to the Government of the Republic of Cuba for its arrangements for this 7th Summit of the Heads of State and Government of CARICOM and Cuba held via videoconference.
    23. Hold the 8th CARICOM-Cuba Summit in 2023, and the 7th CARICOM-Cuba Ministerial Meeting in the Republic of Cuba in June 2022.
    24. Adopted on this 8th day of December 2020.
  • CARICOM and Cuba reiterate solidarity and cooperation at Sixth Ministerial Meeting

    CARICOM and Cuba reiterate solidarity and cooperation at Sixth Ministerial Meeting

    Alicia Nicholls

    Foreign Ministers from Caribbean Community (CARICOM) Member States and the Republic of Cuba held their Sixth CARICOM-Cuba Ministerial on June 14, 2019 in Guyana. Agenda items for the one-day meeting included: climate change, the 2030 Agenda for Sustainable Development, the impact of natural disasters on development, security and hemispheric developments.

    CARICOM countries and Cuba share a long friendship reinforced by cooperation in a myriad of areas, including trade, sport, agriculture, culture, education and health. For example, many Caribbean students have benefited from scholarships offered by the Cuban government to study at Cuban universities. Cuba and CARICOM also have a Trade and Economic Cooperation Agreement (TECA) signed in July 2000.

    In his remarks at the Opening Ceremony of the meeting, CARICOM Secretary General Ambassador Irwin Larocque reiterated that CARICOM and Cuba “have forged a deep and meaningful relationship based on solidarity and cooperation”. He further praised “Cuba’s contribution to the Community’s human resource development, its health sector, agriculture and in the area of sports and culture has been of major significance to our Member States”. Specifically on the area of trade, Ambassador Larocque highlighted the Second Protocol to the TECA with Cuba signed in November 2017 which expanded preferential access to both Parties.

    The current US Administration has sought to tighten sanctions on Cuba, a sharp reversal of the rapprochement which had occurred under the administration of former US President Barack Obama, in order to pressure regime change in Cuba and to stop its support for Venezuelan President Nicolas Maduro. Recent US aggression includes, for example, the enforcement of Title III of the Helms-Burton Act and banning cruise ships to Cuba.

    Ambassador Larocque noted that “the Community reiterates its call for an immediate and unconditional end to the economic, commercial and financial embargo imposed by the Government of the United States of America against Cuba”. He further stated that “CARICOM also rejects, especially the unilateral and extraterritorial nature of these actions”.

    In his address (text in Spanish), Cuba Foreign Minister Bruno Rodriguez Parilla expressed gratitude on behalf of the Cuban government, noting that “we feel that we have a permanent debt of gratitude to CARICOM for its historic and brotherly support for Cuba”. He further observed that Cuba and CARICOM “share a common history and similar challenges” and reiterated Cuba’s commitment to share its “modest successes with the Caribbean”. He also revealed that only a few weeks ago, Cuba unveiled a monument in memory of Caribbean National Heroes in a park in the Havana city centre as a symbol of friendship and Cuban recognition of the men and women who turned this group of countries into a “worthy community and independent foreign policy”.

    At the end of their meeting, the Ministers released a declaration. The main parts which speak specifically to trade are at paragraphs 7-9:

    In this regard, we reaffirm our commitment to continue promoting the implementation of projects to improve air and sea ports, infrastructure and connectivity between our countries and broaden our economic and trade relations through the implementation of the Revised Trade and Economic Cooperation Agreement between CARICOM and Cuba;

    Commit to complete the required internal legal procedures with a view to giving effect to the Second Protocol to the Agreement on Trade and Economic Cooperation, which will contribute to the strengthening of trade relations;

    Reiterate the importance of trade for the Region’s sustainable development and reaffirm the necessity of appropriate policy space and special and differential treatment for small vulnerable economies like those in the Caribbean. In that context, we welcome the hosting by Barbados of UNCTAD XV in October 2020, which will be the first time that an UNCTAD quadrennial conference has been held in a Caribbean country;

    The full Declaration may be read here.

    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.

    DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.

  • 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.