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The Tear Gas Ministerial

Beardless in Seattle:
Cuban delegation backs developing countries in WTO

by Peter Costantini

Seattle - December 3, 1999

Although President Fidel Castro of Cuba cancelled a trip to Seattle for the Third Ministerial Conference of the World Trade Organization (WTO), a Cuban delegation led by Foreign Minister Felipe Pérez Roque is representing Cuba at the meeting.

Castro explained in a letter to Congressman Jim McDermott of Seattle that he feared conservative Cuban-American politicians would convince the U.S. government to arrest him for the downing of a civilian small plane by the Cuban air force in 1996.

Because of a United States economic embargo in force for nearly 40 years, the Caribbean island nation has a strategic interest in free trade unusual for a developing country with a socialist economy.

In Seattle, though, Cuba has joined the majority of less-developed nations in harshly condemning the implementation of previous trade agreements by the WTO and in resisting pressure from the U.S. and Europe for a further round of negotiations until their grievances are addressed.

“Many delegates from Latin America and Africa are offended at being treated as spectators at this conference, with secret negotiations being conducted behind their backs on sensitive issues," observed Pérez, who at 34 years old represents a new generation of Cuban leadership.

"The WTO is not the organization of a few rich countries, but of all countries. It ought to assure an environment of transparency and clarity, and if it does not, it will continue doing irremediable damage to itself.”

So far, trade liberalization has brought only "diminished export earnings, more unequal trade, reduction of development aid, more foreign debt, more poverty, more diseases, more marginalization and more underdevelopment," Trade Minister Ricardo Cabrisas Ruiz told WTO delegates.

"Liberalization of trade in agricultural products is a utopia," he said, because persistently high tariffs and export subsidies in developed countries continue to distort commerce, while prices for basic agricultural commodities have fallen below 1970s levels.

Along with four-fifths of the member countries of the WTO, said Cabrisas, Cuba is demanding "review, repair and reform" of the current agreements and fulfillment of all commitments previously made to developing countries before agreeing to any further trade negotiations.

Cuba’s focus in the Seattle ministerial is the development of underdeveloped countries, said Oswaldo Martínez, President of the Economics Commission of the National Assembly.

Trade, Martínez asserted, must be an “instrument of development.”

In the profoundly unequal trade between poor countries and rich countries, he said, poor countries must receive differential treatment, and when they do agree to liberalize their trade, they must be allowed to take into account their particular needs.

Before another round of trade negotiations begins, Martínez emphasized, rich countries must fulfill their commitments made during the Uruguay Round, the previous round of trade negotiations that culminated in 1994 in the formation of the WTO.

U.S. President Clinton, under pressure from the International Confederation of Free Trade Unions and the AFL-CIO, has proposed discussing core labor standards such as child labor in the context of the WTO.

Cuba counters that labor standards must not be used as a “weapon against developing economies,” and that low wages should not be a reason to exclude countries from trade.

“To sanction us because our poverty prevents us from paying higher wages would be a joke in bad taste,” said Pérez.

Whether the WTO or the International Labor Organization (ILO) is the appropriate forum for discussions on labor standards should be decided jointly by the underdeveloped countries, Martínez said.

Many developing nations and some trade unions from them have opposed linking labor with trade, instead supporting the ILO as the proper forum for labor issues.

The 800-pound guerrilla of trade problems for Cuba, however, remains the U.S. embargo, which Pérez said “violates the rules of free trade and the commitments of the U.S. to the WTO” and hurts U.S. corporations, who are losing opportunities in Cuba.

Cuban Vice-President Carlos Lage has estimated that the embargo and other political pressures inflict yearly damages of $800 million on the Cuban economy, equivalent to one-fifth of Cuba's total imports.

Cuba threatened in 1995 to bring a complaint against the U.S. before the WTO if it passed the draconian Helms-Burton Act, which restricts investment and trade by third countries with Cuba.

Although the law took effect in 1996, Cuba has still not raised the issue in the WTO and Martínez declined to comment on whether it intended to in the future.

Since the fall of the Soviet Union in 1991, Cuba has managed to make the difficult transition from trade subsidized by the Soviet bloc to open trade with many capitalist economies while still maintaining strong levels of government support for education, health care and social security.

After a catastrophic drop of 35 percent in gross national product from 1989 to 1993, Cuba's economy began to grow again in the mid-90s.

Projected growth of 1.6 percent in 1999, while weak, is still ahead of the Latin American average.

“We believe we have survived the worst while saving our system of social justice,” said Pérez, “and we do not intend to give it up in the future: everything we do is to preserve it.”

Life expectancy and access to safe water remain much higher than the Latin America and Caribbean average, while infant mortality and illiteracy continue to be far lower, according to the World Bank.

“Even under blockade conditions, Cuba has shown that it is possible to grow and find space in the world economy,” Martínez said.

The Cuban legislator singled out tourism as a “motor of the Cuban economy,” which also helps to attract foreign direct investment and to capture foreign exchange.

In the 90s, he said, revenues from the tourist trade have grown at a 24 percent annual rate.

Cuba’s pharmaceutical and biotechnology industries are also competitive on the world market, according to Pérez.

For example, he said, a Canadian drug company has received a license to distribute a Cuban vaccine against meningitis.

However, the foreign minister opposed proposals by developed countries to strengthen international intellectual property rights.

“Intellectual property should be democratized,” he said, “but it’s now being privatized.”

The structural transformation of Cuba’s agricultural economy has been critical for assuring domestic food supply.

Before 1990, the government administered 75 percent of farmlands and much food was imported from Eastern Europe.

Since the collapse of the Soviet Union, state control of agriculture has declined to around 30 percent, while more than half of cultivable land is now farmed by cooperatives and another 15 percent by small independent farmers.

During the 90s, the Cuban economy has gradually opened to foreign capital as well.

Martínez said the Cuban government has formed 370 joint ventures with foreign firms, primarily from Canada, Europe and Latin America, and predominantly in the sectors of tourism, petroleum, telecommunications and nickel.

The embargo prevents investment from the U.S., but many U.S. businesses are beginning to chafe at these restrictions as they see their potential competitive position in a market of 11 million people slipping away.

In 1998, a bi-partisan group including three former Republican secretaries of state and several U.S. senators said it believed the blockade no longer served U.S. interests and encouraged Clinton to form a commission to review U.S. policy towards Cuba.

Peter Costantini covered the WTO Seattle Ministerial for Inter Press Service, a newswire based in Rome. This piece was written for Inter Press Service, but did not run on the newswire.