The Hemisphere: Friends Farther North

While Fidel Castro was at economic war with one northern neighbor, he was having no problems at all with a second. In response to a newsman’s question last week, Canada’s Prime Minister John Diefenbaker said that “Canada has no intention whatsoever of imposing any embargo on Canadian goods in Cuban trade.” The Cuban reaction could hardly have been happier. Cheered Havana’s El Mundo: “In Canada there does not prevail the aggressive hysteria which blinds the United States.” The Castro paper ran a cartoon showing Canada’s sturdy arm breaking the “Yankee economic blockade” around Cuba. Added the Cuban embassy in Ottawa: Relations with Canada are “perfect.”

Washington pointed out that the U.S. had not asked Canada to join in the embargo; it had merely sent advance notice to Canada of its plan, as a courtesy. As the week developed, there was little doubt that Castro had succeeded in inserting the thin edge of trade advantage and national pride between the traditional allies.

Opening to the West. All along, while nationalizing U.S. property, Castro purposefully exempted Canadian holdings, even the five Canadian insurance companies that dominate 70% of Cuba’s life-insurance business, with policies valued at $400 million. Two weeks ago, when he added Cuba’s banks to the U.S. banks already nationalized, Castro again made an exception, left free only two financial institutions, both Canadian—the Royal Bank of Canada, with 24 branches in Cuba, and the Bank of Nova Scotia, with eight, totaling $100 million in assets. To his TV audience he explained: “All payment transactions are being carried out by these banks, and they are rendering a service to the revolution through their home offices in Canada.”

Castro’s strategy was simple: with access to U.S. suppliers cut off, trade ties to Canada would be preserved as a means of getting some of the embargoed parts and materials needed to keep Cuba’s U.S.-oriented economy going until it could switch to Iron Curtain suppliers. For their own reasons, Canada’s government and businessmen were willing to goalong—at least for the moment. Said the Toronto Globe and Mail: “Diefenbaker’s statement has served notice to the world that Canadian trade policy is not made in Washington.” As for the businessmen, President Ronald Kinsman of the Canadian Exporters’ Association put it in a nutshell: “Trade is trade.”

The amount of trade involved is tiny compared to the uproar. Only 300 Canadians live in Cuba, and Canada’s exports to the island in 1959 amounted to less than 1% of its total exports—mainly newsprint, medicine, steel, copper tubing, codfish, malt and chemicals. Even this small export business had dropped: from $17.5 million in 1958 to $15.2 million in 1959, with 1960’s first half showing a sharp dip to $4,800,000 v. $7,400,000 for the same period in 1959. Exports of newsprint fell from $2,600,000 to $999,000, salt codfish from $1,200,000 to $510.000, wheat from $367,000 to $104,000. Reason: though Castro was more willing to pay Canadians than Americans, he was cutting back in order to conserve foreign exchange.

Positive Results. Now, with a formal embargo under way, Canadian businessmen are betting that their picture will improve. Selected Canadian export figures for 1960’s first half show an upward trend compared to 1959: sheet and strip steel went from $149,000 to $212,000, aircraft engines and parts from $35,000 to $209,000, synthetic rubber and plastics from $17,000 to $255,000, medicines from $158,000 to $315,000.

Last week the Cuban state shipping line announced the immediate start of a freight service with Canada. From Canada’s Saguenay Shipping Co., which eliminated its Montreal-Santiago freight service a month ago, came hopeful word: “The whole picture is under review.”

There was also word that an “unofficial” Canadian trade mission has been in Cuba for several weeks and has landed orders for auto parts, electrical equipment and other industrial goods reportedly totaling $7,500,000.