TRADE WITH CUBA:
AN ANALYSIS OF THE CURRENT EMBARGO
AND ITS FUTURE
embargo levied on Cuba has been described by the US government as "the
most comprehensive embargo the United States has against any country in
the world." What are the reasons the US has for waging such a battle
against a small, faltering nation? Should such an embargo be continued?
What are the potential gains and loses of ending the embargo? Questions
concerning the embargo abound, but satisfactory answers remain elusive.
In order to understand the current Cuba
debates, an understanding of the island's history is needed. Following
the Spanish-American War, the US led a campaign to amend the Cuban Constitution.
The Platt Amendment, as it was called, gave the US rights to a Navy base
at Guantanamo Bay, and a strong influence in Cuban politics. President
Roosevelt later gave up the control over Cuban policy, but retained the
A communist revolution in 1958 brought Fidel
Castro to power. In 1960, Castro's regime seized all the property that
was owned by foreign interests, including those in the US. Prior to the
seizure, about 75% of Cuba's land was owned by foreign interests. The
seizure of US property was the principle cause creating the US embargo,
begun by John F. Kennedy. A year later, Kennedy initiates the Bay of Pigs
attempt to overthrow Castro. The Bay of Pigs was followed a year later
by the Cuban Missile Crisis.
A strong Soviet support for Cuba kept tensions
high through the 1960s and 1970s. The quiet tension ended in 1980, when
roughly 125,000 Cubans emigrated to the United States. Thus, Miami's Cuban
Exile community was born. Since then, many more Cubans have attempted
to reach the US. Another major exodus occurred in 1994. About 3,000 Cubans
tried to reach America in the single year of 2001. The US Coast Guard
was able to interdict about one quarter of those 3,000.
Today, Cuba has an estimated population
of 11.25 million people, on an island about the size of Pennsylvania.
One-fifth of Cuba's population in 14 years old or younger. The nation's
per capita income is $2,300.
The Current State
of the Embargo
1992 law, known as the Cuban Democracy Act (or Torricelli Law) and the
1996 Helms-Burton Act significantly increased obstacles to trading with
Cuba. While these recent laws did allow for some exceptions, such as humanitarian
and religious aid, the laws made corporate trade much more difficult.
One provision made it illegal for any ship that has been to Cuba to dock
at an American port for six months. Such a provision made it difficult
for foreign nations to trade with both the US and Cuba. The Trade Sanctions
Reform and Export Enhancement Act of 2000 relaxed the embargo and allowed
certain sales of food to Cuba. Violating the embargo could result in up
to a $1 million fine and a decade in prison.
In a speech, George W. Bush made clear the
while certain restrictions on the embargo have been weakened, he still
opposes any efforts to allow Cuba to finance purchases. Bush stated that
such financing would aid the communist regime. An obvious reason why politicians
support the embargo is because of the Cuban exile community in Miami.
The Cuban American National Foundation (CANF) is a major lobbying organization,
and as such, is a substantial campaign contributor. The day Jesse Helms
announced support for the Helms Burton Act (which strengthened the embargo),
CANF donated $75,000 to Helms. President Clinton's endorsement of the
Cuba Democracy Act garnered him $300,000 from CANF.
Strong opposition by CANF has not stopped
a growing interest in trade with Cuba, though. From 1999 to 2002, at least
eight members of the US Senate and eighteen members of the House have
visited Cuba with the purpose of exploring trade opportunities. Additionally,
the House of Representatives is now considering HR5022, the Freedom to
Travel to Cuba Act of 2002. HR5022 is currently in the House Committee
on International Relations.
Reasons Why Sanctions
are Being Weakened
The main reasons why sanctions are being
weakened are strictly practical and economic. Free-trade with Cuba has
the potential to earn the United States billions of dollars. Currently
Cuba is trading with other nations. But, the US would seem the most logical
trading partner in many circustances, because of our close location. Why
should Cuba buy goods from Europe or Asia when the United States is a
mere 90 miles away?
The Texas Senate voted to encourage the
federal government the completely rescind the embargo. The Senate cited
facts such as that Cuba's oil production has increased by over 400% in
only ten years. Texas oil companies would certainly like to be able to
purchase much of that oil. The Senate further stated that "Cuba imports
nearly a billion dollar's worth of food every year." The farmers
in Texas want the opportunity to sell in a Cuba desperate for food. American
farmers are beginning to see much of that trade thanks to the Trade Sanctions
Reform and Export Enhancement Act of 2000. In the first year of sales
to Cuba, the US sold $250 million in crops.
Beyond the loss of food sales to Cuba, the
embargo costs the US in other ways. For example, Cuba is trying to bill
itself as a stopping point for air-cargo traveling between Europe and
Latin America. Currently, the city of Miami is the major stopping point.
If Cuba is successful in taking the air-cargo business, the economic loss
for Miami will be tremendous.
Some have claimed that the embargo should
be lifted because it does not work. Congressman Ron Paul (L-TX) has said
that the embargo creates hatred for America among the Cuban population.
Rev Robert Sirico echoed Congressman Paul's statement and added that in
any case, sanctions do not injure the leaders of oppressive regimes. The
sentiment that leaders are immune to the effects of sanctions was also
stated by Donald Schulz writing in the Journal of Interamerican Studies
and World Affairs. When President Bush gave his speech saying trade financing
for Cuba would support an oppressive regime, Castro replied in a statement
high-level Cuban leader can be bribed. None of them are millionaires,
as is the
of the United States, whose monthly salary is nearly double that of all
of the State Council of Ministers of Cuba for a whole year. None of them
be included in the long list of neo-liberal friends of Mr. W. in Latin
Olympic champions of embezzlement and robbery."
Castro has certainly
used the embargo to create Cuban distrust for America and democracy.
Rather than enforcing an embargo that cannot
work, Donald Shulz advocated a plan of active engagement. He believes
the US should "flood Cuba with foreign students, businessmen, teachers,
tourists, researchers, journalists, artists, and other carriers of liberal,
democratic, and materialistic values."
Still others have accused the United States
with blatant hypocrisy and disregard for international law. Anthony Kirkpatrick
wrote that any claims against Cuban human-rights abuses must be compared
with Amnesty International reports of abuse here in America. Donald B.
Ardell wrote more strongly of American hypocrisy.
embargo is illogical and inconsistent, continued by the Administration
pander to a small but influential voting bloc of ex-patriot extremists
trad with hideous regimes, such as Saudi Arabia, for goodness sakes!
makes a valid point. According to the US Department of State, Saudi Arabia
regularly violates basic human rights. Nonetheless, President George W.
Bush has said that he and the Crown Prince of Saudi Arabia enjoy "a
strong personal bond." The United States even trades with communist
Vietnam now. Why would the US government sanction Cuba for its human rights
abuses when the government's own documents name numerous other nations
that are equally atrocious abusers and yet benefit from free-trade with
The stamina of the "ex-patriot extremists"
Ardell wrote about may be weakening, though. A recent poll conducted by
Florida International University's (FIU) Institute of Public Opinion Research
found Cuban immigrant living in Miami are becoming more pessimistic about
democratic change coming to Cuba. As recently as 1991, 47% of ex-patriots
believed "major political change" would occur in Cuba within
one year. Only 2% of the 1991 respondents thought change would take more
than a decade. And 4$ said change would never come. A decade later, in
2000, the percentage believing change would never come increased from
4% to 21%. The precentage who believed change would take at least a decade
increased from 2% to 11%. Meanwhile, the percentage who saw change coming
within a year declined from 41% to 7%. The Cuban exiles have even become
much more willing to see sanctions weakened. In 1991, only 29% thought
medicine should be exempted from the embargo. In 2000, that 29% had increased
to 43%. FIU began questioning respondents about allowing food sales to
Cuba in 1993. At that time, only 15% supported the idea of food sales.
By 2000, 37% supported food sales. Clearly, the Cuban community of Miami
is seeing less chance for democratic reform in Cuba and many are willing
to see at least basic humanitarian sales to Castro's government.
Reasons for the
proponents of the embargo have a difficult time defending sanctions on
the grounds of effectiveness. After all, the embargo has been in place
for decades, yet Castro still reigns. Instead of defending the embargo's
effect on democratic reforms, George W. Bush has defended the embargo
as "a moral statement." Further, Bush has derided Cuba because
it is the only non-democratic nation in the West. Bush stated, "There
is only one national leader [in the West] whose position of power owes
more to bullets than ballots." Bush went on to say that efforts to
end the embargo would simply "prop-up" the failing communist
Jaime Suchlicki, the director of the University
of Miami's Institute for Cuban and Cuban-American Studies, also believes
ending the embargo is wrong. Suchlicki wrote that ending the embargo would
have several negative effects, including the tacit endorsement of Castro's
regime. Suchlicki also mentioned the fact that Castro seized American
property following his revolution. However, when the Cuban government
seized control of US properties, Castro did offer compensation, much as
the US government does with eminent domain. The United States refused
the offer, though, and declared the embargo.
While many business and humanitarians advocate
ending the embargo because of free-trade's ability to help the Cuban people
and American profits, others claim that lifting the embargo could cost
America financially. Many countries that have agreed to sell goods to
Cuba on financed money have since ended the practice. Spain, France, Italy,
and Venezuela have discovered that Cuba is too poor to pay its debts.
Consequently, loaning to Cuba come at a loss to the lending nations. Because
of the threats of Cuba not repaying loans, foreign investment in Cuba
fell from $488 million in 2000 to $38.9 million a year later. Florida
sugar growers also are concerned that trade could cost them. Cuba is a
major producer of sugar and could sell considerably cheaper to the US
market. Florida sugar growers suffered greatly following NAFTA and fear
trade with Cuba could easily bankrupt them.
world is making a definite and absolute trend toward global free-trade,
and economic development. Cuba, much like China, is attempting to include
itself in freedom's bounty, while still retaining significant central
control. Nonetheless, Cuba is moving toward liberalizing its economy.
Castro has used the term "entrepreneurial upgrading" for a practice
of allowing locally run, but state-owned companies significant autonomy.
The local companies are charged with using technology, creating production
according to market demands and managing manpower.
The Cuban government is making tremendous
efforts to keep up with new technology. It is now common for Cuban students
to study IT in college, or to take adult courses in computer applications.
Cuba is even placing internet computers in every post office.
Cuba's efforts to embrace the new millennium
are reinforced by the young population of the nation, and excellent educational
system. Cuba's literacy rate is at 98%, and Cuba has a higher per capita
college completion rate than any Latin American country, rivaling even
the best European nations.
Assessment of Trade
with Cuba is a difficult and complex issue to debate. Each side has varied
and valid issues to raise. However, it is my view that the weight of evidence
supports a decision to allow free-trade, without giving federal foreign
aid to Cuba.
It is obviously hypocritical and absurd
for the US to trade with Saudi Arabia, Vietnam, and China, yet not with
Cuba. Cuba is really no risk to the United States. In fact, the United
States spend more money on its military in twelve hours than Cuba does
in a year.
Mark Rasenick astutely pointed out that
it makes no sense to continue an embargo that has not achieved its objective
in four decades. Granted, Cubas's survival for most of that time was dependent
upon the Soviet Union. The loss of Soviet support has hurt Cuba. However,
there are numerous other nations willing to sell to Cuba. In fact, America
is the only nation with an actual embargo policy against Cuba. So, Cuba
is going to trade with some nation. Cuba is going to find a way to participate
in the world economy. America is simply choosing to lose the potential
sales to Cuba.
There is risk in trading with Cuba, as France,
Italy, and Spain have discovered. However, American businesses should
be allowed to decide for themselves what level of risk they are willing
to take in trading with and loaning to Cuba. The American government,
however, should not risk tax payer money on an obviously high-risk and
Cuba also represents an untaped human resource
for American businesses. Cuba's excellent educational system has created
highly qualified and skilled workers. Yet, Cuba's poor economic situation
has led Cuban workers to be the lowest paid in the West. US firms often
use Chinese labor, or those of other poorer nations. Using Cuban labor
would allow US businesses to save money of labor while also saving on
shipping product into the US.
In the end, America has for too long fought
a losing battle with Castro. Other nations were always willing to circumvent
US policy, and Castro survived. What communism and Castro may not survive,
though, is the new economy. Free-trade has the power to bring in the liberal,
democratic values that might lead to the changes the embargo has failed
to achieve. Of course, as with all new ventures, American business must
proceed with caution.
Castro has seized US assets once, Cuba's
totalitarian regime can change policies at whim, and Cuba's credit record
is not encouraging. But, with due diligence, America and Cuba could create
a situation beneficial to both nations.
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