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Cuba
8.48 p.m.
Baroness Young rose to ask Her Majesty's Government what are their present relations with Cuba.
The noble Baroness said: My Lords, I tabled this Unstarred Question for two reasons. I did so first because I have taken a great interest in Cuba for some time now and I paid my third visit to that country last October. I believe that it is important that we should not neglect Cuba or any part of the Caribbean. I did so secondly because I believe that now that we know the results of the United States elections this is an appropriate time to look again at the effects of the Helms-Burton legislation. Perhaps I may add how very grateful I am to all those who are to participate in the debate.
Over the past four years Britain has established a wide range of new relationships with Cuba. During this time we have seen ministerial visits--two by my honourable friend Mr. Ian Taylor, the Parliamentary Under-Secretary of State at the DTI, and one by my honourable friend Mr. Tom Sackville from the Home Office. They were the first ministerial visits for 20 years.
What is valuable is that we are now able to discuss openly and frankly with all members of the Cuban Government--including, importantly, President Castro--issues ranging from trade and narcotics interdiction, to our concerns about civic rights and the development of a civil and more open society. We have also seen our relationship and dialogue with Cuba develop with a wide range of Cuban Ministers visiting the United Kingdom to discuss issues ranging from biotechnical, medical and other research in which Cuba is engaged to the problems of deepening trade and other exchanges. I wish to say at this point how fortunate I believe we are in our ambassador and his staff in Havana who have worked tirelessly and effectively to promote Britain's interests.
All this activity has been paralleled by a growth in British commercial activity in the spheres of both investment and trade. British companies are now involved in a wide range of investments and financing, from agriculture through to manufacturing. The Commonwealth Development Corporation, which is actively engaged in the creation of a number of joint ventures, will open an office in Havana before too long. This has been paralleled by an increase in trade, with companies being well represented at major exhibitions such as the Havana International Fair and Expo Caribe in Santiago de Cuba.
However, despite this mutual interest, what worries me at the present time is that we are now in danger of losing this early advantage to others in Europe and
elsewhere. As your Lordships may know, I chair the Cuba Initiative. This consists of businessmen and women with officials from the DTI and the FCO and the noble Lord, Lord Kennet, whom I am glad to see in his place, and its purpose is to promote trade between Britain and Cuba. There is a similar committee in Havana chaired by Minister Cabrisas, the Minister for Foreign Trade.The danger is that the good work I believe we have been able to achieve may come to nothing if we are not able to respond to Cuba's interest in involving our companies more closely in their economy. I speak here about the absence of ECGD cover and an apparent unwillingness to consider mechanisms which are acceptable elsewhere in other countries in the case of Cuba. I regret to say that the approach of ECGD is in stark contrast to that being taken by our European partners. That is why exports to Cuba from France exceeded 220 million dollars last year and those from Spain 380 million dollars in 1996. Holland totalled 120 million dollars, Italy 120 million dollars, and others in Europe were not far behind; Canada I believe exported 370 million dollars' worth. Indeed, if we in Britain were to be doing as well as France, Spain or Canada, Cuba would be one of our largest markets in Latin America and certainly the largest in the Caribbean.
It is therefore a sad fact that our exports at 40 million dollars come far behind. In saying this, I wish to make it clear that this is no criticism whatsoever of British companies, which have been working very hard indeed, but which have had this difficulty about ECGD cover.
Indeed, this startling recent progress on the part of our European Union partners has followed from a willingness to provide short-term credits on a revolving basis against guarantees of payment from the future earnings of commodities such as nickel and sugar. France and Spain appear to understand what we do not. That is that if Cuba is ever to be able to repay its commercial debt--a matter it has just begun to explore with certain other countries--it needs to upgrade and retool its productive sector, an approach facilitated by the provision of credits. There is therefore a double danger. Not only are we falling behind in our exports, but there is a real possibility that we will not get our debt repaid, either. Perhaps I may say while on this matter that it is something which I have raised directly with Ministers in the DTI. The position that ECGD is now taking will lead to the probable loss of a £20 million contract offered to a British supplier. If this is the case, I believe it to be a tragedy in which there are no winners whatever in this country. I find it difficult, if not impossible, to understand.
There is now a strong case for high level representatives of ECGD to visit Cuba to reassess their position, for them to consider the approaches that are being taken by other European nations and, if necessary, to discuss with them how they manage to deal with what are very similar problems to those which we experience ourselves. I hope also that the DTI will send a senior official at the earliest possible opportunity to learn about the unique trade opportunity that we are missing. I should be most grateful to my noble and learned friend if he will comment on these two particular points.
They are of the utmost importance, and I know that I am speaking, in saying this, on behalf of very many British companies today.Turning now to the effect of the Helms-Burton legislation, in December last the EU agreed a common position on Cuba. That statement encouraged change in Cuba and makes it clear that member states would seek to effect change through engagement and dialogue rather than by the approach preferred, I am sorry to say, by the United States. Unhappily, the United States continues to seek some uncertain future for Cuba through a process of isolation, which I believe could only lead to social and political chaos that would eventually spill over into the rest of the Caribbean, were it to succeed.
Moreover, the United States--a country for which I have great admiration--has sought through the unacceptable extra-territorial Helms-Burton legislation a unilateral solution on us all in response to their differences with Cuba. Surely, this cannot be right in a world moving to multilateral solutions to problems. That is why the action brought by the EU in the World Trade Organisation has much wider implications and needs to succeed.
This month President Clinton again waived Title III of this extra-territorial law, thereby again postponing the ability of US citizens with pre-registered claims to allegedly expropriated assets to bring action against individuals or companies from third countries. However, the very fact that every six months international policy towards Cuba is held hostage in this way can hardly be acceptable in a world where we are trying to find long-term solutions to problems through consensus and debate. That is why the EU action at the World Trade Organisation against Helms-Burton is so important as it makes clear to our friends in the United States that they cannot assume the right to legislate for us on this or indeed on any other issue.
Much of the focus in the debate on Helms-Burton has been on Titles III and IV, which deny entry to named individuals into the US. However, I believe that we should also be concerned about Titles I and II, which seek to determine how a transition in Cuba should take place. While much of the content of this part of the legislation should be principally a matter of concern in the United States, surely it cannot be sensible that the US administration has allowed its hand to be tied in a matter as critical as determining how to respond to change in Cuba. Indeed, I believe it to be the case that if President Castro indicated that Cuba was preparing for multi-party elections, the legislation would not allow the US president to recognise this as a transition to democracy. Situations can change rapidly, as we saw in eastern Europe. Helms-Burton is, in my view, not helpful in any aspect to encourage a gradual change in Cuba in a manner that can be endorsed by all its people, which is something we all want to see.
On my last visit to Cuba I had the opportunity to meet with Dr. Lage, the vice-president of the Council of Ministers. Dr. Lage is by any standard an outstanding representative of all that is new in the Cuban Government's thinking. I believe that the time has come
for Britain to facilitate a constructive dialogue with the new generation of Cuba's leaders, as have our friends in Canada and elsewhere in Europe. I therefore hope that it will be possible for Britain to recognise the value of inviting Dr. Lage to the UK either later this year or early in 1998 so that a broader range of individuals can fully understand Cuba's new thinking and the progress that is being made in restructuring the economy.In some circles in North America it is suggested that the economic reform programme has ended. That is far from the truth. I believe that the Cuba Initiative knows this well from conversations with some intimately involved in that complex process. What is now under way is a far-reaching but low key process of consolidation of the first phase of the reform process. That involves the complete reform of the banking system, the full introduction of a tax system, the removal of subsidies, and the establishment of all enterprises on a fully commercial basis. That process which will affect the lives of every Cuban is of great complexity but is showing early signs of success, with the Cuban economy again moving forward with a growth last year of 7 per cent.
No one would deny that we have our differences with Cuba, but there are many other countries with significantly worse records with which we continue to trade and to deal. Our way is through engagement and dialogue. The time has come for Britain to move on to a deeper relationship from which our companies, our exporters and the Cuban people will all benefit.
9.1 p.m.
Baroness Hooper: My Lords, I thank my noble friend for once again bringing this issue before us and for giving us the opportunity to update our information on the current state of our relations with Cuba. Noble Lords may be aware of my interest in Latin America. In that region, Cuba is now the only country whose people do not enjoy the benefits of a pluralistic democracy and free and open government. Nevertheless, as my noble friend has enumerated, many changes have come about in recent years. In part, that is as a result of the break up of the Soviet Union. The move towards a market economy is very much to be welcomed. I support my noble friend in wishing to encourage Cuba to move further and faster in what we consider to be the right direction.
I, too, deplore the actions of the United States in seeking further to isolate Cuba and to penalise foreign countries doing business inside Cuba. If it is all right to trade with China, why not Cuba? I, too, will be interested to hear from my noble and learned friend the Minister the latest information on the status of the Helms-Burton legislation. As my noble friend said, the so-called temporary waiver brought in before the US elections has been extended for a further six months. It is important to remember that that waiver affects only the implementation of the policy; that is to say, the imposition of penalties and fines.
In the meantime, I understand that the US authorities continue to compile lists--black lists, perhaps we should call them--and on the latest figures I have those
consist of some 318 foreign companies reportedly doing business with the Castro regime. They include 147 EU firms, 27 of which are British and include household names such as Fisons, Tate & Lyle, and Glaxo Wellcome. I was talking only this morning in the City to a leading stockbroker who deplored the fact that no member of his firm can go to Cuba at present because of the extent of its business in the US which would be imperilled by that legislation. At the very least, other companies have slowed down or delayed investment there. That must be a tragedy for all those in Cuba who are trying to push change further.I am pleased that in addition to the unilateral protest from the UK, we have joined our EU partners in protesting, as my noble friend said. In demanding that the WTO declares the Helms-Burton legislation illegal, and contrary to the general principles of international law and the sovereignty of independent states, we are bringing to bear the most important forces. I shall be interested to hear from my noble and learned friend the Minister about the progress of the WTO intervention.
However, I regret hearing from my noble friend that the ECGD does not sufficiently support the trade effort of British companies which are keen to do business in Cuba. In that respect, I hope that the Treasury has not been deterred by the attitude of the United States. I know from my experience of the DTI that considerable support is given to businessmen and that subventions are available for trade missions to other countries in Latin America. A major conference, supported by the joint initiative of the DTI and the Foreign Office, will take place in early February. It will be attended by the presidents of Brazil and Peru and other leading figures from Latin America. It is intended especially to encourage the trade effort between this country and the various Latin American countries. I understand that Cuban representatives will also be attending that conference.
On another front, I am however glad that a second Minister to visit Cuba in 25 years is my honourable friend Tom Sackville, to whom my noble friend referred. He went there last month and was able to sign a Customs and Excise co-operation pact with Cuba as part of an offensive to close down drug smuggling routes through the Caribbean to Britain. I understand that two Scotland Yard officers are due shortly to go to Cuba as part of that effort. That policy affects the UK itself with regard to the five Caribbean dependent territories. I understand that the Foreign Office plans to take on new powers to crack down on money laundering in those territories as part of a joint effort.
Recently there has been even more encouraging information that Cuba is also co-operating--believe it or not!--with the United States on that front, and last month handed over to the US authorities six tonnes of cocaine seized from a Colombian freighter. Those are all welcome signs of progress and openness in Cuba and our relations with Cuba. I hope to hear more from other speakers and from my noble and learned friend the Minister.
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