Mexico and Cuba review trade pact

By Gerardo Arreola

From the Mexican newspaper La Jornada

HAVANA – Mexico and Cuba again reviewed the state of their bilateral trade in what might be the last effort of that type made by the departing government of President Felipe Calderón.

An official Mexican delegation came to Havana [last week] to discuss with local authorities an updating of the Accord for Economic Complementation (ACE) between the two nations. The accord is Number 51 in the scheme drawn by the Latin American Association for Integration (ALADI).

The visit’s “objective is to continue the bilateral dialogue” about ACE-52, said a spokesman for the Mexican Embassy, who gave no further details. The delegation included the Undersecretary of Foreign Trade for the Department of the Economy, Francisco Rosenzweig; the executive director of the Mexican Agency for International Cooperation for Development, Rogelio Granguillhome, and the former senator Yeidckol Polevnsky.

Cuba wants to review the list of products in the accord and to reduce tariffs, in an effort to compensate the chronic mismatch in the trade balance with Mexico. In addition to being an old issue, it is the counterpart demanded by the island when discussing the sensitive issue of the common debt.

Renegotiation of the debt

When President Felipe Calderón came here on an official visit last April, he was unable to reach an agreement on the debt owed by the National Bank of Cuba (BNC) to Mexico’s National Bank for Foreign Trade (Bancomext).

After a six-year litigation between the two banks, the debt was renegotiated in 2008. It was set at $413 million, payable in 15 years at 6 percent interest with five years’ grace on the principal, plus a guarantee from the Central Bank of Cuba.

Some delays in the payment of interests and late charges complicated the settlement. In addition, a clause on the calculation of revenues sparked an angry discussion. But the most important problem is still to come: in 2013, the BNC will have to pay back the capital. A new restructure was negotiated before the presidential visit but no agreement was reached.

During the litigation over the debt, Mexico halted its credit. Besides, between 2008 and 2010, Cuba froze the local bank accounts (in hard currency) of its foreign suppliers, which created an unfavorable environment that depressed bilateral trade.

The figures given out by the two countries do not match. According to Mexico’s Department of the Economy, bilateral trade amounted to $373 million in 2011. Cuba’s National Office of Statistics reported $380 million in 2010, the most recent figure available.