By Bruce Zagaris and Babak Hoghooghi, March 29, 2015
Original here: US-Cuban Relations.Opportunities for Barbados
SUMMARY AND CONCLUSION
As normalization of relations between Cuba and the United States continues, Barbados has some potential opportunities. Some of these opportunities, as mentioned above, arise from the potential for Barbados to serve as an intermediary for investment into Cuba. In this regard, the DTA and BIT with Cuba offer advantages, especially if Cuba will respect the provisions of these treaties.
Barbados can take advantage of the fact that it is one of a few countries that has a double tax and bilateral investment treaty with Cuba, under which foreign investors can invest on an advantageous basis. However, unless Barbados can successfully assert competent authority provisions for Canadians and others using the tax treaty when Cuba does not comply with the treaty provisions, the advantage will be one on paper only. To that end, the Barbados government and its private sector will need to work with civil society advocates to educate the Cuban government about the benefits of adhering to the provisions of its treaty network, especially with a longtime friend such as Barbados.
Given Cuba’s size and its success in education, health care, and culture, Barbados can strengthen its offerings in all these spheres by embarking on exchanges and joint ventures. Barbados can do this in the context of the Cuba-CARICOM Trade and Economic Cooperation Agreement and the Cuba-CARICOM summit, and by proposing initiatives bilaterally. Because of the control exercised by the Cuban government of its economy, the Barbados government is a critical actor.
Moreover, the Barbados government and private sector, including its academic institutions, professional organizations and non-profits, in collaboration with other CARICOM organizations, will want to develop connections with the parts of the U.S. community which will look to expand their presence in Cuba, as well as with the Cuban government and private sector, so it can help develop meaningful relationships. Some civil society groups in the U.S. have been active in Cuba. These tend to be small and medium-size philanthropies. In addition, U.S. firms investing and/or exporting to Cuba are likely to be exporting construction and telecommunications equipment, as well as agricultural products and financial services. It should be noted that Barbados is not the only CARICOM country or even the main one that will try to serve as an intermediary conduit for U.S. investors to Cuba. Already Jamaica is making a push to do this work.
The Barbados government and Barbados non-profits and academic community should propose and pursue projects that address the mutual interests of both countries and others, such as the U.S., Canada, Brazil, Venezuela, Nicaragua, Bolivia, Russia, China, and international organizations. Such projects should include environmental protection programs, artistic and cultural exchanges, programs to combat drug trafficking and human trafficking, humanitarian relief in Haiti, responding to the Ebola plague, new ways to generate energy, supporting cooperatives and other structures to achieve economic development, and fostering education and understanding among peoples.
Already, the slow opening of the Cuban economy has resulted in internal calls, both from state enterprises and private businesses, to expand international exchange, liberalize domestic regulations, and reform the currency regime. These forces for internal change will multiply as trade, investment and tourism expand, business and civil society organizations become active, and ideas flow more freely. They will also change the dynamics of Cuba and inter-American relations.
