Fate of the Cuba Embargo
I. IdentificationWhile most would agree that economic sanctions are the correct tool to use in dealing with the tyrant led and globally dangerous countries such as Iraq, Iran, and Burma, many oppose the employment of the embargo upon Cuba. What vast difference is there between Fidel Castro and Saddam Hussein or Mu’ammar al-Qadhafi, that U.S. businesses would want Congress to lift the trade restricting legislation of the Cuban Democracy Act of 1992, or more importantly, the Cuban Liberty and Democratic Solidarity Act of 1996? In essence, there is none. Only recently back in March of 1999, a Cuban court sentenced four dissidents to 3 ½ - 5 years in prison, for among other things: "suggesting a boycotting of the 1997 elections, criticizing a Communist Party document, and encouraging foreign companies no to invest in Cuba (Snow, AP 032099)." To say that the Castro regime squelches free speech is to name only the beginning of a long list of human rights violations for which it is accountable. On February 26, 1999 the U.S. Department of State released a 23 page report on Cuba’s human rights practices. The review was much less than stellar and included reports of unadmonished police brutality, laws against the advocating of government change, child prostitution, and prison torture.
In the eyes of most Americans, this type of government supported behavior is heinous and calls for action on behalf of the United States to take an opposing stance. For almost 40 years, the United States has placed an embargo on Cuba in efforts of replacing Castro’s dictatorship with a democratic government. However, arguably little change has resulted from the trade sanctions and some feel that it is time to try a different strategy: to engage in trade with Cuba. By establishing a working relationship with Fidel Castro, many feel that there would be greater chance for the formation of a more democratic government within the island nation. In all likelihood, the Cuba embargo will be pushed over in the interests of investment. And as for the act being in the name of spreading democracy? It is simply a ploy for winning over the concerned public to the side of the politically powerful industrial giants.
Understanding the formation of the positions held by each of the involved parties in the LIBERTAD dispute is critical to seeing clearly the stakes of the issue at hand. When one conducts a Cuba embargo literature review, one rarely comes across the notion that big businesses play the largest hand and have the most influence in how government policy is formed, particularly with respect to nations around the world. It is under this idea that in the interests of multinational corporations, the LIBERTAD Act will be nullified, either through official legislation, as H.R. 229 of the 106th Congress prescribes, or through continued lax implementation by the U.S. Executive Administration.
Executive Administration
Despite the fact that the Clinton Administration now supports the Cuban Democracy Act of 1992 and endorsed the Cuban Liberty and Democratic Solidarity Act of 1996, it took a bit of arm twisting on behalf of the Helms-Burton sponsors to obtain Clinton’s signature. Not until the 1996 shoot down of two planes piloted by Cuban Americans did he sign onto the sanctioning legislation. If his agreement to sign the document was in retaliation to an isolated incident, as it certainly seems to be, then how strong were or are his convictions on either side of the issue? If he felt firmly against the use of the embargo, he would have held his original position throughout the incident aftermath, when Sen. Helms increased his pressure for bill passage. Instead, he reacted to the episode and signed the bill. Now that Clinton has committed himself and his Administration to using economic sanctions against Cuba, he has on one hand tried to uphold the signed law, while at the same time, tried wiggling his way out of the agreement by seeking a waiver of Titles III and IV of LIBERTAD. With this kind of indecisiveness at the helm of the Executive Administration, the possibility of a reversal back to the anti-embargo position is inevitable. This has in fact been taking place since the law enactment.
In a press release on January 5, 1999, Clinton expressed, among other points, his intentions to:
"Authorize the sale of food and agriculture inputs to independent non-governmental entities" and "authorize charter passenger flights to cities in Cuba other than Havana and from some cities in the United States other than Miami" (Clinton, Press Sec. Office. 010599).
While working within the legal boundaries of the CDA and LIBERTAD, he has made clear that he wants to increase relations with the Cuban citizens. With these kinds of remittances made in the face of the economic sanctions, it would seem clear that the voices behind Clinton’s initiative are not just those of the Cuban-American dissidents, but large companies looking for overseas business opportunities.
A CUBANEWS finding as presented by the Miami Herald Publishing Company stated that as of 1995, Cuba imported 100,000 metric tons/year of rice and $3 MM/year of vegetable seeds. However, these commodities were stated as having a possible import growth of as much as 500,000 metric tons/year and $20 MM/year respectively (CUBANEWS, Miami Herald Pub. Co., 092498). To rice and seed producers from Louisiana and Arkansas, this is a sizable market that is close to home, yet is being tapped by Japanese and European entrepreneurs while the U.S. producers salivate only a few miles away. One can be sure that these folks are ranting in the U.S. government’s upper tiers. After all, they are loosing business opportunities.
Congress
One of the unique aspects of the U.S. Congress is the large amount of representative power held by American citizens concerning how policy is formed and implemented. The focused power of public voice, as funneled by various lobbying organizations such as the Cuban-American National Foundation (CANF), clearly makes its opinions known to the legislative branch as it works closely with Congresspersons like Sen. Jesse Helms. Their influence is massive and driving as it was CANF that produced much of the support for the Helms-Burton Act. A group made of mainly Cuban exiles living in the United States CANF is the staunch supporter of the strictest economic sanctions against Cuba. Their main qualm with Castro is that in the creation of his communist state, their land and businesses were taken over by the government, often leaving them with little. For this they want Castro to pay dearly and thus assert their views in Congress.
In addition to lobby groups, the general American public also has a significant voice. Elliot Abrams points out this fact in his article "Words or War: Why Sanctions are Necessary":
"The United States imposes economic sanctions when a large body of its citizens, as represented in Congress or by the president, conclude that some other nation’s behavior is so egregious as to preclude normal economic relations…Most Americans seem to think that to carry on normal political and economic relations with oppressive regimes is distasteful and demoralizing." (Abrams, The Weekly Standard, 072798).
Accordingly, an embargo is placed on a nation as a form of symbolic protest against the actions of another country, in addition to passively forcing change in the political climate. But as loud as these citizens may be shouting for sanctions, another group is taking hold of the congressional microphone.
| Cuban rafters set sail
for Florida in 1994 Photo Credit: Steven Fish, Impact Visuals |
| Regardless of the policy, there will always be dissenting opinion. In the issue of Cuba, the public representation is coupled by the political influence held by big businesses as is common in other governments of the international community. These multinational companies act as individuals and lobby groups as well. Concerning the pointlessness of economic sanctions, the American business community formed a group named USA*Engage which feels that "In an integrated, globalized economy, positive US economic engagement … is central to [the United State’s] economic prosperity and to the worldwide growth of democracy, freedom, and human rights" (USA*Engage, 041697). Under this ideology, the unilateral embargo on Cuba is ineffective, while damaging to the U.S. economy. In a 1997 report released by the Institute for International Economics at a USA*Engage conference, it was cited that $15-$20 billion dollars of the American economy had been lost to sanctions, in addition to the loss of 250,000 jobs. In response to these findings, the lobby group has pressed hard for a change in how sanctions are doled out by the United States. This side too claims to be making headway, as a USA*Engage official reported that in 1997, only 2 new sanctions were implemented, as compared to 23 the year before. |  |
Regardless of the policy, there will always be dissenting opinion. In the issue of Cuba, the public representation is coupled by the political influence held by big businesses as is common in other governments of the international community. These multinational companies act as individuals and lobby groups as well. Concerning the pointlessness of economic sanctions, the American business community formed a group named USA*Engage which feels that "In an integrated, globalized economy, positive US economic engagement … is central to [the United State’s] economic prosperity and to the worldwide growth of democracy, freedom, and human rights" (USA*Engage, 041697). Under this ideology, the unilateral embargo on Cuba is ineffective, while damaging to the U.S. economy. In a 1997 report released by the Institute for International Economics at a USA*Engage conference, it was cited that $15-$20 billion dollars of the American economy had been lost to sanctions, in addition to the loss of 250,000 jobs. In response to these findings, the lobby group has pressed hard for a change in how sanctions are doled out by the United States. This side too claims to be making headway, as a USA*Engage official reported that in 1997, only 2 new sanctions were implemented, as compared to 23 the year before.
If USA*Engage has the political sway that it claims it does, it will only be a short matter of time before a significant change takes place in the United States’ position on Cuban policy. Currently, there is a pending bill in Congress, H.R.229 (sponsored by C. Rangel [D-NY]), that seeks, among other things, to lift the trade embargo on Cuba, for which the lobby group supports passionately. It seems clear that both President Clinton and certain members of Congress are carefully noting the sanction effects felt by home businesses and thus are slowly heeding the voices of those groups.
When pitted against the Cuban-American National Foundation, USA*Engage holds a stronger position, arguing that the Cuba embargo has been and will only prove fruitless. In a two sided newspaper feature between Wayne Smith (Senior Fellow at the Center for International Policy) and Sen. Robert Torricelli (D-NJ), Smith pointed out that the measures out lined and implemented by the Cuban Democracy Act are counterproductive. In 1996, Congress enacted into law the Helms-Burton Act, Titles III and IV of which:
"make foreign nationals who traffic in stolen U.S. property, liable to sanctions by the U.S. government or the former property owners and denies U.S. visas to foreign businesspersons involved with stolen property. Should trafficking occur, the law allows citizens to file lawsuits against the foreign companies using their former properties"(Editorial, CANF, 0796).
According to Smith, this has only angered our closest trading partners, produced no effect on the Cuban economy (which has incidentally grown since the law’s enactment), has done nothing to remove Castro from power or invigorate democratic change within the current communist system, and has only been denounced by every other nation in the U.N. General Assembly, except Israel, which happens to be one of Cuba’s largest trade partners! (Smith, Star-Ledger, 010399) The CANF can only contend that the embargo has been symbolic of our distaste for Cuban politics and has caused a degree of economic instability. Thus armed, in addition to the loss of jobs and markets, USA*Engage plows forward to do away with the Cuban embargo.
Even in the International Scene… Business view still reins.
On May 18, 1998, Secretary of State Madeline Albright released a statement entitled "U.S.-EU Understanding on Expropriated Property". On behalf of the Clinton Administration, she explained an agreement between the United States and the European Union concerning the issue of how U.S. national expropriated property in Cuba is to be viewed by other nations. The "agreement" is as follows:
"The disciplines which we each will apply are multifaceted: no government loans, no government grants, no subsidies, no fiscal advantages, no government guarantees, no government political risk insurance, no government equity participation and no government commercial advocacy in support of investments in illegally expropriated property; joint or coordinated approaches to the expropriating state; and more"(Albright, U.S. Dep’t of State, 051898).
However, the carrying out of this agreement on the side of the European Union hinges on the waiver of Title IV of the Helms-Burton Act. Without the waiver, and thus far, Congress has been unwilling to grant it, nothing will happen and business between Cuba and Europe will continue as usual. Even if the president was granted permission to pass off Title IV, the foreign businesses might hear discouraging remarks from their governments, but the Agreement leaves open the possibility for trade financially unsupported by the government. It thus can be argued that big businesses, be they from the United States or foreign, are in command of the policy implementation.
According to Abrams, nations such as France and Japan prefer to hold commerce separate from ideology (Abrams, The Weekly Standard, 072798). For this reason, the United States is the sole supporter for sanctions against Cuba. Big businesses would obviously only care about Cuban policies insofar as to please their customers and those at home who champion human rights. On the other hand they must be accommodating to the hosting government; any friction could cost them a deal, or have them completely removed from the investment arena. The Japanese and French styles of practice, eliminating the point of customer and political human rights approval, provides for greater flexibility when doing business, an advantage corporations are not going to quickly relinquish. Thus, trying to gain support from other nations and involving them in our embargo laws will only prove to be a fruitless headache.
Furthermore, one can be sure that foreign businesses will refute the legitimacy of their being held accountable to the Helms-Burton stipulations. If Castro’s expropriation of U.S. national property was a violation of international law (for which he has on more than one occasion tried to negotiate reimbursement and has settled claims with all other nations), then LIBERTAD is arguably only piling on more violations to the issue, to which international corporations are not about to adhere.
The nature of the American public, concerning their dislike of commerce with dictators, is an inherent hindrance for the U.S. company, holding it to a higher standard than to which their foreign counterparts are held. Perhaps it is only fitting, given the type of freedoms we enjoy, and wish for others to have as well. But when the U.S. government imposes embargoes on potential markets, thus curtailing any possibility for expansion or growth, those businesses will retaliate with the utmost vigor. USA*Engage, formed to address and repeal the use of unilateral sanctions as a foreign policy tool, and as a representative of the U.S. business community, will never settle until they can freely make money. President Clinton has already begun bowing to these demands in advocating the United States’ need to adjust our stance. By all means, we will continue and forever be advocates for human rights and democracy, but the way in which we carry out our foreign policy is constantly being remolded. At this point in the life of the Cuba embargo, almost forty years into its implementation, the corporate giants and big businesses are quickly gaining the upper and decisive hand, posing a serious threat to the embargo supporters. Undoubtedly, events will continue on the existing course, headed for change in the interests of trade. If this proves true, then the Cuban Democracy Act, Helms-Burton, and the Cuba embargo itself, will soon be relics of the pre-economically interdependent global society.
LYBIA: Lybia and US Sanctions Act
USARAB: Arab Boycott and US Policy
04/07/99
II. Legal Clusters[DIS]agreement and [COMP]leted
The Cuban Liberty and Democratic Solidarity Act (also referred to as LIBERTAD, the Helms-Burton Act, and H.R.927) was signed into effect by President Clinton in 1996. The United States Congress currently presides over its implementation. There is significant disagreement as to whether or not the Cuba embargo, authorized by this act, should still be in effect. To counter Helms-Burton, H.R.229 is pending In House, designed to repeal the articles prescribed by Helms-Burton and the Cuban Democracy Act of 1992.
[CUBA] and [UNILAT]
The Helms-Burton Act is an example of unilateral economic sanctions, and it is for this fact that organizations such as USA*Engage are actively trying to change it. They argue that without the support and backing from other nations in justifying our actions, the act holds no validity and as Titles III and IV of the Act prescribe, is a breech of international law.
[MANY]
Titles III and IV of the Helms-Burton Act:
"Makes foreign nationals who traffic in stolen U.S. property, liable to sanctions by the U.S. government or the former property owners and denies U.S. visas to foreign businesspersons involved with stole n property. Should trafficking occur, the law allows citizens to file lawsuits against the foreign companies using their former properties"(Editorial, CANF, 0796).
Thus any country that has a business involved under these terms is affected by the Helms-Burton Act.
[LAW]
The Helms-Burton Act is a U.S. law which arguably breeches international law. The European Union has brought Titles III an d IV to the attention of the WTO, and while has not yet pressed charges, is currently threatening to do so. The U.S.-EU Understanding Agreement was meant to alleviate the friction between the two parties, though has seemingly failed to do so.
III. Geographic Clustersa. Geographic Domain: [North America]
b. Geographic Site: [Caribbean]
c. Geographic Impact: [Cuba] and [United States] and [Other]
[TROP]ical
IV. Trade Clusters[IMBAN]
The Helms-Burton Act is an official U.S. embargo on Cuba and thus it is illegal to trade, by import or export, marketable goods.
[DIRECT]
By enforcing economic sanctions on Cuba, the U.S. government aims to uproot Fidel Castro's communist regime, replacing it with a more democratic government. Thus far, the embargo has symbolized the sentiments of the United States concerning Castro\rquote s horrible human rights record and expropriation of U.S. national property. It has also helped to create an unstable Cuban economy.
a. Directly Related to Product: NO
b. Indirectly Related to Product: NO
c. Not Related to Product: YES
d. Related to Process: YES
Projected Exports to Cuba
In 1995 Cuba's current and
projected agricultural import volumes were reported
by CUBANEWS.
Published by the Miami Herald
Publishing Company as follows:
| Commodity | Present Vol. | Future Potential Vol. |
| Grain | 1,200,000 metric tons/year | 2,000,000 mt/y |
| Potatoes | 80,000 mt/y | 200,000 mt/y |
| Rice (Milled) | 100,000 mt/y | 400,000 - 500,000 mt/y |
| Beef | nil | 75,000 mt/y |
| Eggs | nil | $250 MM/year |
| Poultry (frozen) | 75,000 mt/y | 120,000 mt/y |
| Dairy Products | 70,000 mt/y | 110,000 mt/y |
| Pork Lard | 36,000 mt/y | 120,000 mt/y |
| Edible Oil | 22,000 mt/y | 45,000 mt/y |
| Cattle | $2 MM/year | $10 MM/year |
| Vegetable Seeds | $3 MM/year | $20 MM/year |
While the Cuba embargo has been in effect for almost forty years, its impact has only been realized since the collapse of the Soviet Union, at which time Castro stopped receiving social and military aid. From that time onward however, the Cuban economy has actually grown and thus no significant effect has come about from the embargo.
[Other]
[CUBA] and [UNITED STATES]
Due to the nature of the Cuba Embargo, no trade exists between Cuba and the United States except for shipments of medical and humanitarian supplies on behalf of U.S. companies, as deemed permissible by the Cuban Democracy Act of 1992.
V. Environment Clusters: N/A VI. Other FactorsAbrams, Elliott. "Words or War: Why sanctions are necessary." The Weekly Standard. 27 July 1998.
Albright, M. "U.S.-EU Understanding on Expropriated Property." Washington: GPO, 18 May 1998.
Snow, A. "Cuba Trials a Warning to Dissidents." Associated Press, March 20,1999.
U.S. Department of State. Government Printing Office. Cuba
Country Report on Human Rights Practices for 1998.
Washington: GPO, 1999.
Clinton, President. Statement by the President. Washington: GPO, 5 January 1999.
CUBANEWS. Projected Exports to Cuba. Miami Herald Publishing Co. Miami: 24 September 1998.
Cuban-American National Foundation. A Report on the Immediate Impact of the Cuban Liberty and Democratic Solidarity Act (LIBERTAD). July 1996.
Smith, W. "Time to trade? YES." Star-Ledger. Newark: 3 January 1999.
USA*Engage. "Statement of Policy." 3 March 1999.
H.R.927 "The Cuban Liberty and Democratic Solidarity Act" Washington: U.S. Congress, 1996.
H.R.229.Washington: U.S. Congress, 1999.
"Cuban Democracy Act." Washington: U.S. Congress, 1992
KEYWORDS:
HELMS
NORTHAMERICA
SNAMER
Cuba
USA
Unilat
IMBAN
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