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Mexico President Burnishes Ties With Cuba

With NAFTA secured, Salinas uses business deal to signal warmer relations with embargoed island

WHILE the North American Free Trade Agreement was still up in the air, Mexico gave Cuba the cold shoulder. Now, with NAFTA secure in its hip pocket, Mexico is reverting to the friendly ``abrazo'' (embrace) more typical of the two countries' historical ties.

In that light, President Carlos Salinas de Gortari makes a one-day visit to Havana today to meet with President Fidel Castro Ruz and attend the signing of one of the biggest ever Mexican private investments made in Cuba. The Monterrey-based conglomerate, Domos International, is buying a 49 percent stake in Cuba's telecommunications system for $720 million. Domos is promising to pump another $740 million into the firm over the next seven years.

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``This trip tells the Mexican people that, despite Mexico's good economic relations with the US and Canada, it hasn't abandoned its traditional political positions,'' says Ricardo Macouzet, director of the political science department at the Ibero-American University in Mexico City.

The principles of self-determination and nonintervention are cornerstones of Mexican foreign policy (a policy derived largely from being on the receiving end of United States intervention and territorial invasion). Mexico has consistently opposed the three-decade-old US blockade of Cuba and been a staunch Cuban ally. But while bargaining for NAFTA and actively wooing the US Congress to get the treaty approved, Salinas's administration distanced itself from Cuba, going so far as to meet with anti-Castro exiles from the US and Spain.

Now this trip and the landmark telecommunications deal are seen by some Mexican businessmen as a starting gun for Mexican investment in Cuba. ``On account of NAFTA, we've kept our hands out of Cuba. But the Domo deal - backed by Mr. Salinas and Mr. Castro -

will generate a lot of confidence among the fence sitters. This is a signal that we are free to go into Cuba,'' says Diego Fernandez Ros, Latin America coordinator of the Mexican Business Council for International Affairs, an industry trade group.

Mr. Fernandez argues that Cuba is a ``natural'' market for Mexico, given its cultural and geographic proximity. But Spain, Italy, Canada, and France are the most active investors in Cuba since the former Soviet Union abandoned this socialist satellite. Mexican exports to Cuba totaled only $95.4 million in 1993. But Mexican businessmen are showing increasing interest in Castro's island.

``A year ago, there were maybe five contracts under negotiation. Judging from the contracts in play now, there should be at least 40 business deals signed between Mexico and Cuba this year,'' says Fernandez, who has traveled to Cuba eight times in 1994 with Mexican delegations.

Fernandez admits that because of Cuba's economic crisis, other countries may provide better short-term profits. And the Mexican business community is still concerned about possible reprisals by the US government.

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``There are many Mexican companies for which the US is their major market, and they won't risk that to go into Cuba. They will wait until the embargo is lifted and go into Cuba when the US corporations do,'' Fernandez says.

Last year, the US government warned potential investors in Cuba - via embassies and consulates - that the US claims on property confiscated by Castro when he took over are still valid.

And in 1992, when another Monterrey consortium announced it was planning a major investment in the Cuban textile industry, then-US Ambassador to Mexico John Dimitri Negroponte reportedly flew to Monterrey to warn against the deal. The warning was ignored.

Mexican subsidiaries of US companies are banned by the Cuban Democracy Act of 1992 from doing business with Cuba. But this US law, sponsored by US Rep. Robert Torricelli (D) of New Jersey, has been widely criticized in Latin America as a violation of sovereignty. When Representative Torricelli visited Mexico last month, Mexican officials refused to meet with him.

On June 3, the Mexican Congress voted to donate one day's salary (about $75,000) to buy oil for Cuba. Cuba is a popular political cause. A Mexican group organizing relief supplies for Cuba, has pledges from 10,000 Mexicans to buy 160 tons of petroleum products, 14 tons of rice, and $50,000 worth of medicine to be shipped later this month. It is the third such shipment in as many years.

Fernandez notes that US companies are also starting to realize the embargo means a lost opportunity. ``The cold war is over. There are no more Soviet missiles in Cuba. US businessmen should ask themselves, why should [Jorge] Mas Canosa [president of the Cuban American National Foundation] in Miami be able to keep General Motors from selling cars in Cuba. Nissan is there making money. Why not General Motors?''

The inconsistency between open trade with China and Vietnam and the continued embargo of Cuba is causing ambivalence in the Clinton administration, analysts say.

Last October, when 175 US citizens from the Freedom to Travel Campaign in San Francisco, purposefully ignored the US government's restriction on travel to Cuba, 65 people had their passports seized upon returning to the US. Federal law calls for penalties of up to 10 years in prison and a $250,000 fine. The passports have been returned and the US Justice Department has not taken action against them. On June 23, a group of about 200 citizens from 20 states will again test the US's will to enforce the travel restriction.

Meanwhile, Mexican Cuba-philes will be looking for more signs of a thaw in Mexico-Cuba relations. Rumors that Mexico would reopen a line of credit for Cuban business deals were sparked by the presence of the president of the Mexican National Bank of External Trade on the Havana trip with Salinas. But a spokesperson for the bank denies such an announcement is planned.

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