Abe to Seek Cuba’s Help Over North Korea and Boost Trade

Prime Minister Shinzo Abe hopes to gain support from the Cuban government, with its close ties to Pyongyang, in dealing with North Korea’s nuclear provocations and also expand economic ties when he makes the first ever visit by a Japanese leader to the communist nation this week.


Abe is to meet with Cuban President Raul Castro and his brother, Fidel Castro, the former president and an icon of the Cuban revolution.


Cuba normalized diplomatic ties last year with the U.S., its former archenemy. The move led to President Barack Obama’s historic visit to Cuba earlier this year.


As U.S.-Cuban relations enter a new phase, Japan is also eyeing closer ties with the nation, triggering Foreign Minister Fumio Kishida’s visit there last year, the first by a Japanese foreign minister.


Abe’s trip also comes as the international community seeks ways to counter North Korea, which has had sound ties to Cuba since 1960. Cuba has in the past tried to ship arms to North Korea despite a U.N. embargo on the isolated country. In May, senior officials from the ruling Korean Workers’ Party and the Communist Party of Cuba held talks on strengthening ties amid international condemnation against the North.


“We would like to seek Cuba’s understanding and cooperation for the resolution of North Korea-related issues such as abduction (of Japanese citizens), nuclear arms and missiles,” Chief Cabinet Secretary Yoshihide Suga said Wednesday.


Following the fifth nuclear test by the North, Japan, the U.S. and South Korea have become increasingly alarmed by the technological advances Pyongyang has made with its nuclear arsenal. Some expect that the North will soon master the technology to miniaturize nuclear warheads and could have the capability to strike locations as far as Washington and New York within a few years.


The three countries have been seeking support for drafting a new U.N. resolution with stronger sanctions since the test. The North Korean issue will be one of the focal points in the upcoming U.N. General Assembly session, which Abe will attend before his trip to Cuba.


With Abe’s trip, Japan also hopes to bolster economic ties as global powers such as the U.S., the EU and China eye business opportunities there.


China has been one of Cuba’s top economic partners. Premier Li Keqiang will also visit Cuba this month following his trip to attend the U.N. General Assembly session. In 2014, President Xi Jinping signed investment deals during his trip to Cuba.


Cuba’s trade with China totaled $61 million in 2014, while its trade with the U.S. was $15 million, according to Cuban statistics cited in documents from the Japan External Trade Organization (JETRO). Japan lagged behind with a total of $3 million.


Against this backdrop, Abe is expected to announce debt relief of ¥120 billion ($1.17 billion) — about three-fourths of the total debt that Cuba owes Japan. He also is expected to offer about ¥1 billion ($9.74 million) in official development aid, a portion of which would be used to establish training facilities for special physicians.


Debt relief will open up the possibility of yen loans if Cuba continues to repay the rest of the debt. Last year, 15 rich creditor nations in the Paris Club agreed with Cuba to forgo $8.5 billion of Cuba’s $11.1 billion debt stemming from its 1986 default. That could also pave the way for long-term trade insurance by the Nippon Export and Investment Insurance agency, reviving more big-ticket trade, depending on the debt negotiations between the governments.


Japanese trading companies are already seeking more business opportunities there. Trading giants Mitsubishi Corp. and Marubeni Corp. reopened their offices in Havana this year after having previously closed them due to sluggish economic conditions.


They expect a boom in projects to replace Cuba’s aging infrastructure as well as an increase in trade in some consumer products.


Sumitomo Corp., which has operated in Cuba since 1974, is monitoring negotiations between the two governments. Sojitz Corp., which has an office there, is taking a wait-and-see approach, as business in Cuba can still be risky given that U.S. sanctions remain in place.


Other business hurdles also exist. Unable to directly employ Cubans, firms have to hire through government agencies. Cuba is also short of foreign reserves.


Yusuke Nishizawa, deputy director in charge of Latin America and the Caribbean at JETRO, said it’s important for companies to have offices in Cuba, as it is hard to gain information about the country. Still, he doesn’t expect a spike in business. “I am sure there are chances, but it will take time,” he said.