United Kingdom Promotes Engagement with Cuba

 

The United Kingdom’s Foreign Secretary, Philip Hammond, visited Cuba in late April to celebrate and promote his country’s engagement with Cuba. It was the first visit by a U.K. foreign secretary since the Cuban Revolution of 1959.[1]

Before the trip, the Foreign Secretary said, “Britain and Cuba have outlooks on the world and systems of government that are very different. But as Cuba enters a period of significant social and economic change, I am looking forward to demonstrating to the Cuban government and people that the UK is keen to forge new links across the Atlantic.”

“That is why Cuba and the UK are set to reach new cooperation agreements on energy, financial services, education and culture, to the benefit of both our nations. [This also] is an opportunity to hear for myself what Cuba thinks about its present challenges and where it sees its future.”

Upon his arrival in the island, Hammond said that Britain was “keen to forge new links” with the Caribbean nation.”

During the visit the U.K. and Cuba reached an agreement to restructure Cuba’s medium and long-term debt with the UK, which should contribute to the expansion of economic, commercial and financial ties between the two nations.

On April 30 after meeting with President Raúl Castro, Hammond said Castro ”is espousing a programme of gradual change, embracing the realities of the world we live in. I was very struck by the fact that he described the Internet as the reality of our world, spoke positively about the benefits the Internet could bring.” In addition, “Castro is seeking to position himself in the middle between those who are resisting change and those who want much faster, more radical change.” In particular, Castro said Cuba lacks “management expertise in banking services’ and this is an area where the UK has something very clear to offer.” (Below is a photograph of Castro and Hammond.)

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British exports to Cuba rose by almost a third last year compared to 2014, and Britain was the second-biggest source of foreign tourists to Cuba after Canada, with 160,000 Britons making the trip in 2015.Education is seen as another growing area of cooperation, with significant numbers of Cuban students interested in higher education in the UK.

One of the problems Britain faces in such engagement is the extraterritorial effects of the U.S. embargo. Hammond commented, “We have also had discussions with the U.S. about the challenges for British and other European banks in doing business with countries that face U.S. sanctions. There are some problems here but we are working through them with the U.S. and hope to make progress in a way that will enable British businesses to do more business with Cuba.

Conclusion

This is but the latest European promotion of engagement with Cuba. For example, earlier this year President Raúl Castro visited France, where he was the official guest for a state dinner hosted by French President François Hollande, who urged U.S. President Obama to fully lift the embargo against Cuba.[2]

France sees strong potential for some of its largest companies to grow their presence in Cuba. Pernod Ricard SA is the biggest investor in Cuba through its ownership of the Havana Club brand of rum, but others are lining up such as hotels group Accor SA and construction group Bouygues SA. France also wants to boost exports to Cuba, which totaled €131 million ($143 million) in the first 11 months of 2015, down from €157 million in 2014. France is well positioned to cash in on Cuban growth after it played a leading role in negotiating debt forgiveness for Cuba at the end of last year and after President Hollande said this February that around half of Cuba’s remaining dues to France will be used to create a €220 million fund to invest in Franco-Cuban projects.

Ahead of the state dinner, French and Cuban officials signed bilateral agreements covering tourism, rail transport and trade. They also signed off on a road map for France’s development agency to begin investing in Cuban infrastructure.

The efforts of the U.K., France and other European countries to expand trade with Cuba are too often ignored in U.S. discussions of ending the U.S. embargo on the implicit and unexamined assumption that the U.S. is Cuba’s only potential trading partner. Eliminating that assumption provides another reason for the U.S. to eliminate the embargo as soon as possible in order to enhance U.S. efforts to expand trade with Cuba.

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[1] U.K. Foreign Ministry, Foreign Secretary Visits Cuba (April 28, 2016); Press Ass’n, Philip Hammond arrives in Cuba to help “forge new links,” Guardian (April 28, 2016); Reuters, Britain Praises Cuba’s Castro for Embracing Realities of Modernity, N.Y. Times (April 30, 2016); Alexander, Philip Hammond Meets Raul Castro during historic visit to Cuba, Telegraph (April 30, 2016); Raúl receives British Foreign Secretary, Granma (May 1, 2016).

[2] Horobin, France Seeks Closer Ties with Cuba During Castro Visit, W.S.J. (Feb. 1, 2016); Assoc. Press, France: Castro Finds Advocates in Paris, N.Y. Times (Feb. 1, 2016).