Roberto Ledesma Political Science 472 Prof. Raymond Tanter Helms-Burton Effects on Cuban-Canadian Relations On February 3rd 2000, in an historical meeting between the United States and Cuba - two super power nations which nearly came to the brink of war - the United States agreed to repeal the heavily debated Helms-Burton Act of 1996, ironically February 3rd is exactly thirty-eight years to the date when the United States first imposed an embargo on Cuba. Canadian Prime Minister Jean Chretien also attended the meeting, it was largely due to his countries efforts in exposing ÒviolationsÓ of international trade agreements to the U.N., W.T.O., O.A.S. and other organizations and countries that led to mounting pressure from American trading partners to, ÒTell Bill to drop the bill.Ó ÒThe major trading partners of the United States have expressed concern and anger over the Helms-Burton legislation. Title III of the legislation is viewed by every major country as detrimental to its relations with the United StatesÓ1 Why does the U.S. imposed Helms-Burton Act negatively affects foreign policy framework and commercial interest towards Cuba by other countries, specifically Canada? The theoretical scenario mentioned will occur because of the way the Helms- Burton Act affects other countries, not the United States. Major opponents to the bill can be found all over the international scene, from U.S. trading partners to enemies, in this case I will discuss the Canadian interest in Cuba, and why the Canadian Government is so opposed to the legislation. In reaching a conclusion as to what might occur, political theories must be applied to the case in order to understand the approach. Rationality refers to actions taken by decision makers. It deals with how well and actor chooses policy in order to maximize gains and minimize losses. Through a rational decision making process, an actor will identify its options, estimate the likely consequences of those options, consider cost, benefit, and likelihood of success, then select the option that will promise the highest gain or lowest loss.2 In analyzing the rationality of an actor it is important to take into consideration their political approach. The Unites States is bureaucratic and as a result many misperceptions arise. In bureaucratic politics, players see different faces of issues, propose competing ways to resolve value conflicts, and have varying time schedules for action success, therefore, finding the best option is difficult.3 With all these different view points and competing views on what the most rational option would be, the United States political system thus reduces its chances for making a rational decision. On the other hand, Cuba has been a unitary actor since Fidel Castro took power. The island is a totalitarian state with Castro as Chief of State, Head of Government, First Secretary of the Communist Party, and commander in Chief of the Armed Forces. CastroÕs regime does not allow political opposition, this opens the door for miscalculations because he acts as a unitary actor. Castro, as a unitary actor is not capable of analytical decision making, which would take in all view points and search for the best solution, he is only capable of cognitive decision making which includes constrained search, sub-optimal revision, and incomplete evaluation.4 Motivated biases are biases that cause an actor to view another actor in a certain way because it is in the best interest of the first actor to do so, seeing what you want to see. Unmotivated biases arise in situations where one actor perceives that another will act in the same manner that they have in the past, seeing what you expect to see. Together these two biases cause threat amplification.5 Prospect Theory states that people will give more weight to losses over profits.6 It is more painful to lose twenty dollars than it is rewarding to find a twenty dollar bill while walking down South U. Prospect Theory relates to rationality in that a rational actor strives to receive the highest benefits with the lowest corresponding cost. This leads decision makers to be risk acceptant , and they will risk more to avoid a loss than they would to achieve a gain.7 Rationality involves weighing both gains and losses equally, therefore it would be irrational to weigh losses more heavily than similar gains. When a leader acts according to Prospect Theory, he or she is said to be acting out of a basement of fear. Basement of fear is a metaphor for assuming that their behavior is less rational, suggesting restricted choice and an emphasis on minimizing expected losses. If leaders emphasize loss avoidance over gain, tools like economic sanctions may have counter-productive effects.8 With this in mind, if the U.S. has nothing to gain in sanctions against Cuba, what does that tell you about the future of the embargo? Three important concepts that describe the ways in which one country attempts to influence another are deterrence, coercion, and persuasion. Coercion is an important tactic used in international relations and is a bargaining strategy. It is a process where a state seeks to change the behavior of an opponent. This means that an action is encouraged to be undertaken or a previous action undone.9 Deterrence involves an attempt to prevent or discourage any attempt at unwanted actions. Deterrence and Coercion are both strategic, in each case the state that is undertaking the action of coercion or deterrence controls the rewards or consequences of compliance or non- compliance with its wishes.10 Persuasion demonstrates to another actor why it is in their best interest to act in a way which you find beneficial, without manipulating the circumstances or indulging in coercion or deception. Any effects such as rewards or consequences are beyond the control of the state that it is trying to persuade.11 The United States attempt to change behavior in Cuba falls in line with coercion. They are currently trying to coerce the Cuban government into bringing an end to human rights violations and bring about democratic elections. ÒTrying to coerce other countries to join the embargo is offensive to American allies and unlikely to succeed.Ó12 How does Canada fit into this scenario? An historical analysis of CanadaÕs involvement in Cuba and an understanding of the Helms-Burton Act will shed light on the subject. CanadaÕs Foreign Policy Toward Cuba Canadian policy toward Cuba is normal in the sense that it advocates similar relations with the rest of the Americas. As an expression of its independence from the United States, Canada charts a different course in relations with Cuba. It also maintains a tradition of recognizing the Ògovernment of the day.Ó In keeping with that tradition, the Canadian Government recognized the legitimacy of the Castro regime in 1959, and had maintained diplomatic relations with Havana to the present day. The Canadian Government preserves an active and on-going policy towards Cuba. In 1995, Canada and Cuba celebrated fifty years of unbroken diplomatic relations between the two sovereign states. Prior to 1995, Canada-Cuba trade had been minimal. However, with a number of high-level visits promoting several important bilateral trade agreements, two-way trade has increased substantially.13 Canadian public and private agents provide economic advice to the Cuban Government, specifically, in areas of taxation and central banking. In the area of private sector development, the Canadian Government funds projects such as feasibility studies and training programs through the industrial arm of the Canadian International Development Agency (CIDA Inc.). The ultimate driving force behind the Canadian involvement has been Canadian commercial interest. As a result, trade between Canada and Cuba now stands at $550 million Canadian dollars (about 380 million in US$).14 The Department of Foreign Affairs and International Trade warns Canadians of the political and commercial risks of engaging in business with Cuba. On the one hand, the Canadian Government seeks to protect the right of its citizens to establish commercial ties with any country, including Cuba. On the other, the Government seeks to limit its liability in the extension of credit to Canadian companies for high risk commercial ventures.15 A point most often overlooked by American critics, Canada condemns human rights abuses and the lack of civil and political rights, while encouraging constructive initiatives to build civil society through organizations such as the Canada-Cuba Inter-Agency Project. This project promotes programs such as park landscaping and public works. Through bilateral consultations, both at ministerial and departmental levels, the Canadian Government advocates the belief that both dialogue and constructive engagements remain the best means for facilitating economic and political liberalization in Cuba.16 On the international level, Canada demonstrates dialogue and constructive engagement through support of U.N. resolutions for halting the United States embargo, and the renewal of CubaÕs membership in the Organization of American States (OAS). Canadian Governments Response to Helms-Burton Abroad, within hemisphere, and domestically, Canada seeks to preserve a legal and fair global trading order, allowing legal sovereign states the option of trading where and with whom they will trade, without interference from another country. Therefore, delinking trade with politics remains a concern of Canadian policy in opposing Helms- Burton. In concert with those aims, the Canadian Parliament enacted Foreign Extraterritorial Measures Act (FEMA) amendments forbidding Canadian companies and Canadian-based U.S. subsidiaries, involved with Cuba, from complying with any directive from any U.S. entity attempting to influence or harass any company operating in Canada. Enacted in 1992 in response to ratification of the Torricelli Act, the amended FEMA responded once again, to infringements on Canadian sovereignty. Opposition of Helms-Burton received wide-spread support among the Canadian populace. In an August news poll conducted one week after the ceremonial signing at the White House, an overwhelming 71 percent of respondents favored non-compliance on grounds that tighter U.S. sanctions have onerous repercussions for Canadian interests.17 The Canadian GovernmentÕs stance against Helms-Burton is not an easy one, considering that 80 percent of all Canadian goods are exported to the United States, and 64 percent of all companies in Canada are U.S. subsidiaries. In overall trade terms - looking at the whole scope of Canadian worldwide trade - trade with Cuba represents 0.11%.18 For Canadians, Cuba is not a trade issue. Rather, Cuba represents a matter of principle, namely, the right of a sovereign country to conduct and independent foreign policy. That includes the right of a sovereign country to follow whatever policy that country deems appropriate in bringing democracy and open markets to Cuba. Therefore, the GovernmentÕs fight with the U.S. over Cuba constitutes a disagreement about means, instead of objectives. The Canadian Government dissents from U.S. policy on Helms-Burton based on the following objections: n First, that U.S. policy diverges from Canadian policy with respect to Cuba; n Second, that U.S. policy magnifies the U.S.-Cuba problem, instead of solving it; n Third, that U.S. policy disrupts international trade and investment patterns: and n Fourth, that U.S. policy violates Canadian sovereignty, and establishes dangerous precedents for unilateral measures undertaken by the United States. In accordance with these objections, Canada joins the chorus of international opposition against the Libyan-Iranian sanctions based on similar grounds. Ottawa has voiced its displeasure with Helms-Burton via the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), and the Organization of American States, joining lobbying efforts with other U.S. trading partners with business interest in Cuba, along with partners in Mexico and the European Union.19 However, the Government has raised its most vociferous objections through consultations within the framework of the North American Free Trade Agreement (NAFTA). Because Canadian lawyers have given more thought to formalized challenges than any others among the foreign legal community, the task at hand for Canadian lawyers translates into one of structuring extraterritorial challenges into trade dispute resolution settings like NAFTA. One of the main issues being questioned by Canada and the international community as well is Title III of the Helms-Burton Act. This title would permit U.S. citizens and firms to sue in U.S. courts to obtain compensation from non-U.S. firms that, through investment or trade, ÒtrafficÓ in the properties or enterprises seized decades ago by the Cuban government.20 Canada and many other trading partners of the U.S. consider the law a violation of international trade agreements established by the World Trade Organization and NAFTA. Article 102© of NAFTA states that the objective of the free trade area is to increase, substantially, investments opportunities in their [the member states] territories.21 The Helms-Burton Act clearly goes against this objective. The fact that this new Act could, when enforced, punish other states for non- compliance with a purely American policy blatantly refutes the general U.N. principle of sovereignty to each state. The Canadian Government introduced legislation on September 16, 1996 on further FEMA amendments that would issue ÒblockingÓ orders, declaring judgments made in U.S. courts non-enforceable in Canadian courts. It also provides the possibility of fines and imprisonment for individuals and corporations who are convicted for violating international law.22 Provisions are also provided which allow Canadian citizens and corporations the right to ÒÉ.sue and recover any amount obtained under foreign judgments not recognized or enforceable in Canada.Ó23 With this legislation Canada is clearly stating its opposition to any attempt to sue Canadian citizens for business deals that they conduct with Cuba. Trade Minister Art Eggleton explained that further amendments were introduced as Òantidote legislationÓ or preventative measures, should President Clinton implement Helms-Burton Title III provisions. Many believe the sticking point for Canada will come in making FEMA amendments enforceable, while fulfilling obligations under NAFTA. On November 12, 1996 the United Nations General Assembly put forth a resolution, for the fifth consecutive year, with regard to ending the U.S. embargo against Cuba. 137 nations voted to end the embargo, three nations, including the U.S., voted to maintain the embargo, and twenty-five abstained.24 This was the most one-sided vote to date, proving the lack of support the embargo has in other countries. Despite this strong opposition, the U.S. embargo continues. Unmotivated bias can be applied as a result. Historically, the U.S. has received allied support for many of its foreign policies. Because of this, the United States may not realize the situation it is in. The United States does not seem to believe that countries like Canada, who they have been on good terms with, are willing to disobey the U.S. sanctions and possibly take legal action against them. Canada has never taken such measures before, so the U.S. may be thinking, why would they now or in the future? The U.S. bureaucratic political system reduces it chances of attaining a rational decision towards Cuba. President Clinton faced various interest and issues when the Helms-Burton bill reached his desk and he was faced with the decision of whether or not to sign it. 1996 was an election year, and in signing the bill Clinton would greatly enhance his reelection bid. A CNN-USA Today Gallup Poll found that 66% of the American people themselves supported the embargo.25 The PresidentÕs decision appears to be quite irrational. Clinton and other politicians seem to be acting according to Prospect Theory. They are presented with campaign contributions and political support from the Cuban American National Foundation, and they are reluctant to risk losing this support. The Cuban Government has acted irrationally as well. CastroÕs decision to shoot down two Brothers to the Rescue planes was an act of irrationality on the part of his regime. The decision to shoot down the planes sped up the process for passing the Helms-Burton Act and gave U.S. policy and decision makers a strong case for tougher sanctions on Cuba. ÒThose who live in freedom are not free to stand by and watch the enslavement and dishonor of others nor their struggle for liberty and honor.Ó26 One clause of the Helms-Burton Act not to be overlooked states that for a new government to be considered democratic, it cannot include Fidel or his brother Raul. They will have to be remove from power in order for the sanctions to be lifted. Castro will not give up his power so easily, especially after nearly forty years of building his regime. The sanctions will not work because Castro is not going to throw away everything he has built. The U.S. has to realize this and begin trying to work with him instead of against him. They need to begin approaching Cuba the same way Canada does. Canada just like the U.S. wants to see Cuba move towards a more democratic form of government, and improve on human rights. The main difference being that Canada is willing to invest in Cuba, with the hopes that they can influence them by improving conditions there. If economic prosperity and improved living conditions are brought to the island then the Cuban Government and its citizens would be foolish to not want to maintain its new wealth. Coercion would be the best policy in undoing previous actions. Cuba could lose all the benefits it receives from the U.S. if they take actions the U.S. sees as not to their liking. Prospect Theory is applied once again, the Cuban government does not want to lose the rewards it has gained, any gains that displease the U.S. would only lead Cuba back to where it stands now, in an economic crisis. Canada plays an important role in presenting the United States with an example of how they should pursue foreign policy with Cuba. Canada has made many actions showing they are not willing to simply let the U.S. decide how they are going to deal with other countries, and rightfully so. What gives the U.S. the right to tell other countries how they should handle Cuba. The U.S. needs to begin moving towards solving the Cuba issue instead of creating one. Endnotes 1.Press release; April 1996, 1995 Patterns of Global Terrorism - US Dept. Of State http://www.usis.usemb.se/terror/TERSST.HTM 2.Tanter, Raymond. 472NOT1.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not1.txt 3. Tanter, Raymond. 472NOT8.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not8.txt 4. Tanter, Raymond. 472NOT1.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not1.txt 5.Tanter, Raymond. Rogue Regimes. Chapter Six:Cuba 1996 http://www-personal.umich.edu/~rtanter/rogue/cuba.chapter 6. Tanter, Raymond. 472NOT11.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not11.txt 7. Tanter, Raymond. 472NOT11.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not11.txt 8. Tanter, Raymond. Rogue Regimes. Chapter Six:Cuba 1996 http://www-personal.umich.edu/~rtanter/rogue/cuba.chapter 9.Tanter, Raymond. 472NOT6.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not6.txt 10.Tanter, Raymond. 472NOT5.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not5.txt 11. Tanter, Raymond. 472NOT5.DOC. Univ. of Michigan, Political Science 472. 1996 http://www-personal .umich.edu/~rtanter/F96PS472Notes/472not5.txt 12.Conference Report on H.R. 927, Cuban Liberty and Democratic solidarity Act of 1996 http://rs9.loc.gov/cgi-bin/query/2?r104/temp 13.Canadian Government Web http://politics.canada.com/links.asp 14.http://www.santafe.edu/~naminet/naminews/insert/crane.html 15. http://www.santafe.edu/~naminet/naminews/insert/castilla.html 16.http://www.santafe.edu/~naminet/naminews/insert/crane.html 17.http://www.statcan.ca/start.html 18.http://www.statcan.ca/start.html 19.http://www.santafe.edu/~naminet/naminews/insert/oleary.html 20.Center for International Policy, ÒSummary of European Union Legislation in Retaliation to the Helms-Burton Act,Ó1996 http://www.us.net/cip/eu.htm 21. Center for International Policy, ÒSummary of Canadian Legislation in Retaliation to the Helms-Burton Act,Ó1996 http://www.us.net/cip.canada.htm 22. Center for International Policy, ÒSummary of Canadian Legislation in Retaliation to the Helms-Burton Act,Ó1996 http://www.us.net/cip.canada.htm 23.Summary of Canadian Legislation 24.Center for Defense information, ÒU.N. Again Calls for End of Cuba Embargo,Ó1996 http://www.cdi.org:80/~sap/cuba/unvote.html 25.National Journal, January 29,1994, pg. 262 26.Marti, Jose. Cuban Nationalist - writer and poet