Another U.S. Event Promoting U.S.-Cuba Reconciliation

On February 10, 2016, another U.S. event was held to promote U.S.-Cuba reconciliation. This one at Washington, D.C.’s National Press Club was hosted by the U.S. Agricultural Coalition for Cuba, whose launch a year ago was covered in a previous post. [1]

Now we look at an overview of its recent Annual Celebration Event followed by a re-posting of “Bipartisan Support for Ending the Embargo at a USACC Event” (Mar. 1, 2016) by Kaly Moot of the Latin American Working Group (LAWG), which reported on the event. 

Overview of the Event

The Coalition’s past and upcoming years were reviewed by its Chair, Devry Boughner Vorwerk, from member Cargill Incorporated of Minnesota, and its Vice Chair, Paul Johnson. Other members added comments in a discussion moderated by Anne Murray of Cargill; they were Kurt Shultz (U.S. Grains Council), Shawna Morris (National Milk Producers Federation), Chris Rosander (Sun-maid) and Ben Noble (USA Rice).

The Keynote  Address was provided by Tom Vilsack, U.S. Secretary of Agriculture. Members of Congress also made comments; they were U.S. Senators Amy Klobuchar (Dem.,MN) and Heidi Heitkamp (Dem., ND) and U.S. Representatives Cal Emmer, (Rep., MN.), Rick Crawford (Rep., AK), Ted Poe (Rep., TX), Rodney Davis (Rep., IL), Cheri Bustos (Dem., IL) and Jim McGovern (Dem., MA). [2]

State perspectives were provided by Todd Haymore (Virginia Secretary of Agriculture), Richard Fordyce (Missouri Commissioner of Agriculture) and Sid Miller (Texas Agriculture Commissioner). This discussion was moderated by Mark Albertson of member Illinois Soybean Association.

The Cuban Ambassador to the U.S., Josê Ramón Cabańas, offered the views of his government in a discussion that was moderated by Phil Peters of the Lexington Institute.

LAWG’s Coverage of the Event

In a time when bipartisanship in Washington seems harder and harder to come by, it might seem surprising to hear that Democrats from Massachusetts, Minnesota and North Dakota shared not only a stage but also a message with Republicans from Texas and Arkansas.

But that is exactly what happened at an Annual Celebration Event hosted by the U.S. Agriculture Coalition for Cuba (USACC), a coalition of U.S.-based agricultural organizations and companies committed to normalizing trade relations between the United States and Cuba. The wide range of speakers at their one-year anniversary event included industry experts, the U.S. Secretary of Agriculture, the Cuban Ambassador to the United States, and both Democratic and Republican members of the House and Senate.

Although the speakers represented very diverse perspectives, each one managed to agree on one key point: that the United States’ embargo on Cuba –which represents more than five decades of failed policy–must be lifted. Cuba’s ambassador to the United States, José Ramón Cabañas, stressed the fact that Cuba cannot consider completely normalizing relations with the United States while the “bloqueo,” or economic sanctions, remain in place.

Cabañas called trade the “flesh and blood” of a normal relationship between countries and pointed out the fact that only one U.S. bank is authorized to do business with Cuba. However, Cabañas did praise the progress that has been made in the last year, especially with regard to what he called the most important accomplishment: the establishment of respectful dialogue between the U.S. and Cuban governments.

Other speakers offered a variety of reasons why the United States would benefit from full relations with Cuba and an end to the embargo, including increased agricultural trade, possibilities for free trade, advancement of national security interests, and the promotion of human rights.  

Representative Jim McGovern (D-MA) pointed out the rarity and power of the bipartisan effort, joking that it’s not often that he and Republican colleagues agree so closely on an issue. McGovern argued that a majority of American citizens and members of Congress, including Republicans, would like to see the end of the embargo. However, according to McGovern, efforts have been halted by a small but vocal minority of hard liners who promote the continuation of Cold War policies.

Senator Heidi Heitkamp (D-ND), a self-proclaimed incrementalist, called for doing what is immediately possible in this political environment, such as a bill that would permit private banks or individuals to use their own money to invest in trade with Cuba.

Many argued that the embargo had failed at removing Cuban leaders Fidel and Raúl Castro from power, and had instead impeded the United States from promoting human rights on the island through the tools of trade, engagement, and economic development.

U.S. Secretary of Agriculture, Tom Vilsack, highlighted the wide variety of opportunities for trade and the mutual benefits for both countries, arguing that the embargo is unnecessary in this day and age, when normal trade relations could help improve diplomatic relations between Washington and Havana.

U.S. industry experts, particularly those in the U.S. agriculture sector, similarly argued that the restrictions imposed by the embargo currently prevent them from competing in the Cuban market where they say their businesses have many natural advantages, including proximity to the island and quality of goods. According to industry representatives, opening trade between the United States and Cuba could lead to mutual benefits for U.S. companies and the Cuban people, as well as the potential to share information and learn from Cuba research.

In order to advance trade between the United States and Cuba, Representative Rick Crawford (R-AR) promoted the Cuba Agricultural Exports Act (HR 3687), a bipartisan bill he introduced in the House to repeal restrictions on export financing and give producers access to Department of Agriculture marketing programs that help the United States compete in foreign markets. Congressman Crawford argued that the embargo has outlived its usefulness, punishing not the Cuban government but rather America’s agricultural producers (and other manufacturers) and the Cuban citizens.

While the speakers each presented different rationales for removing the embargo, as well as different strategies for doing so, all agreed that the embargo ought to be lifted.

Conclusion

I applaud the Coalition for its bipartisan, continuous efforts to seek an end to the U.S. embargo of Cuba and a fuller reconciliation of the two countries.

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[1] Other posts discussed the March 2015 visit to Cuba by a Coalition delegation and its June 2015 letter to the U.S. Senate Foreign Relations Committee reiterating the group’s opposition “to any effort to restrict trade and travel with the nation of Cuba—including possible amendments to appropriations bills or the State Department reauthorization bill.” Any such restriction “would be detrimental to the U.S. agricultural industry and the future of U.S.-Cuba relations.”

[2] Previous posts discussed bills to end the embargo that have been authored by Senator Klobuchar and Representative Emmer. A more recent post reviewed the current status of these and other bills to end the embargo.

Conference on “Prospects for United States Cuba Normalization, Commerce and Investment”

On February 18, 2016, the Cuba Consortium hosted its first annual Washington Conference: “Prospects for United-States Cuba Normalization, Commerce and Investment.” [1]

The speakers at the Conference included Penny Pritzker, U.S. Secretary of Commerce; Rodrigo Malmierca, Cuban Minister of Foreign Trade and Investment; Tom Vilsack, U.S. Secretary of Agriculture; Benjamin Rhodes, Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting; and Andrea Gacki, Assistant Director, Compliance and Enforcement, Office of Foreign Asset Control, U.S. Department of Treasury. Here is a summary of their remarks.

Secretary Pritzker

Secretary Pritzker
Secretary Pritzker

In her speech, Pritzker said that she and the U.S. delegation on their visit to Cuba last October learned more about how the Cuban economy works, including the rules and regulations that govern the import, export, and distribution of goods across the island. This information helped to guide the most recent (January 2016) U.S. regulatory changes regarding Cuba.

Those new U.S. regulations created a general policy of approval of exports for purposes such as: disaster preparedness and relief, education, agricultural production, artistic endeavors, food processing, public transportation, Cuban civil society, enhanced communications on the island, and civil aviation safety.

Those new regulations also provided that the Commerce Department’s Bureau of Industry and Security will now review on a case-by-case basis proposed exports from U.S. companies to Cuban state-owned enterprises and government entities to determine if the export will meet the needs of the Cuban people. We had learned in our visit that in Cuba – as in many of our other trading partners around the world – it is necessary to work with state-owned enterprises in order to support the local private sector.

The corresponding new regulations from the U.S. Department of the Treasury permit financing for most authorized exports and travel authorizations.

In sum, whether environmental goods, telecommunications equipment, or products that private sector entrepreneurs need, the U.S. government’s regulatory changes permit a wide variety of trade and commercial activities.

However, if the U.S. is to truly maximize the benefits of our regulatory changes for the Cuban people, the Cuban government needs to make it easier for Cuban citizens to start their own businesses, purchase goods through wholesale markets, engage in external trade, secure credit, and access information online. These steps include making Cuban economic and business regulations publicly available; providing clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorizing Cuban imports of U.S. products that are now allowed by U.S. regulations.

The bilateral civil aviation agreement signed on February 16 is an example of what we have accomplished together.

“The U.S. embargo continues to be a roadblock to increasing engagement between our countries. As President Obama reaffirmed during his State of the Union address, our Administration strongly supports lifting the embargo, and we will continue to call on Congress to repeal it immediately.”

Minister Malmierca

Minister Malmierca
Minister Malmierca

Malmierca asserted that President Obama has the legal authority to adopt additional regulations that would permit Cuba to use the U.S. Dollar in international financial transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications.

The U.S. regulatory changes to date are positive, but they are not enough. For example, he said, since the December 2014 joint U.S.-Cuba announcement of normalization, six financial institutions have been fined nearly two billion dollars for trading with Cuba. These fines and the ban on the use of the U.S. Dollar have had serious negative effects on Cuba.

The previous day (February 17), Malmierca led a Cuban delegation at a meeting with Secretary Pritzker and other officials of the U.S. Department of Commerce. [2] On that occasion he made many of the same points just mentioned. He also pointed out that Cuba does not apply any coercive measures against U.S. companies or businesspeople and, in fact, welcomes them to do business on the island.

At that prior meeting in response to a question by Secretary Pritzker, Malmierca said that the next meeting of the Congress of the Communist Party of Cuba will seek to define the priority economic sectors for long-term development. “The most complex issue is that Cuba wants all these changes to be implemented without affecting the population; we do not want to apply shock measures or measures that may have a negative effect.”

This upcoming Congress will address the role of the market in the Cuban economy and the role of foreign investment in its economic development. This will seek to further consolidate changes adopted by Cuba before December 17, 2014, which are irreversible. “All the measures we are adopting, and which were sovereignly chosen long before December 17, 2014, . . . will also contribute to making the decisions we are making together more feasible,” he concluded.

Secretary Vilsack

Secretary Vilsack
Secretary Vilsack

Secretary Vilsack also criticized the U.S. embargo (blockade), noting that it restricts opportunities for trade between Cuba and the U.S. One area of such negative impact was the U.S. helping Cuba’s organic and urban farming practices.

The U.S. Agriculture Department is looking to identify business opportunities through a fund to which several U.S. agricultural companies voluntarily contribute. This fund, however, cannot use federal resources to explore business opportunities with the island, as is common practice, thus obstructing U.S. companies’ access to the Cuban market.

Although a U.S. law in 2000 authorized sales of agricultural products to Cuba, it required Cuba to pay in cash in advance, which has had a severe negative impact on such U.S. exports.

Associate Director Gacki

Associate Director Gacki
Associate Director Gacki

Gacki was unable to identify the specific law which prohibits Cuba’s use of the U.S. Dollar in international transactions, but said the Treasury Department currently was investigating whether there were other executive measures President Obama could adopt to reduce the adverse impacts on Cuba of restrictions on its use of the U.S. Dollar.

Assistant to the President Rhodes

Assistant to President Rhodes
Assistant to President Rhodes

Rhodes confirmed that Obama still has broad executive powers to make further and more substantial modifications to the U.S. embargo (blockade) policy.

Rhodes said that while the embargo policy may have had relevance in the past, the island is changing as are opinions of some Cuban-Americans. In addition, the increased numbers of Americans visiting Cuba are seeing why the embargo should be ended.

The Obama Administration, he added, is reviewing other potential regulatory changes that could be made within the existing legal framework.Thus, he believed it is possible to do more before the end of this administration to generate the necessary momentum to definitively end the embargo.

Conference Background

The Cuba Consortium is an assembly of companies, non-profit organizations, investors, academics, and entrepreneurs organized to track and examine the normalization process in both countries and to inform and prepare its members for opportunities to engage Cuba. They are complemented by foreign policy, political, economic, international development, legal, and cultural experts who have specialized knowledge of the diplomacy, politics, and economics of the normalization process.

The Consortium’s Advisory Board is co-chaired by Senators Nancy Kassebaum Baker and Tom Daschle and includes Dr. Michael Adams, Lon Augustenborg, Richard Blum, Sheila Burke, Tomas Diaz de la Rubia, Senator Byron Dorgan, Rodney Ferguson, Senator Bill Frist, Dr. Helene Gayle, Maurice Greenberg, Senator Bob Kerrey, Linda Klein, Fred Malek, Janet Napolitano, Thomas Ross, Senator Olympia Snowe, The Honorable Ellen Tauscher, Bill Weldon, and Rob Wilder.

The Consortium was organized by the Howard Baker Forum, which was founded by former Senator Howard Baker to provide a platform for examining specific, immediate, critical issues affecting the nation’s progress at home and its relations abroad under a philosophy of reasoned consensus, founded upon an agreed set of facts.

Conclusion

The Consortium and its conference join the U.S. Agricultural Coalition for Cuba and Engage Cuba as important bipartisan U.S. efforts to promote U.S.-Cuba reconciliation. I applaud all of their efforts.

On the same day of this conference, the White House announced that President Obama and Michelle Obama will be visiting Cuba on March 21 and 22. The White House Press Secretary said, “In Cuba, the President will work to build on the progress we have made toward normalization of relations with Cuba – advancing commercial and people-to-people ties that can improve the well-being of the Cuban people, and expressing our support for human rights. In addition to holding a bilateral meeting with Cuban President Raul Castro, President Obama will engage with members of civil society, entrepreneurs and Cubans from different walks of life.”

The previously mentioned Benjamin Rhodes also issued a similar statement that also reviewed the various steps towards normalization since December 17, 2014.

Before President Obama’s trip, I anticipate and hope that the U.S. will announce additional steps in the process of normalization, including:

  • issue new regulations allowing or expanding Cuba’s ability to use the U.S. Dollar in international transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications;
  • announce the ending of special U.S. immigration benefits for Cubans, including the policy of allowing entry without visas into the U.S. of Cubans arriving by land (the dry feet policy); and
  • announce further steps in the process of resolving U.S. claims against Cuba for expropriation of property owned by U.S. persons without compensation.

In addition, it is hoped that before President Obama’s trip Cuba will make Cuban economic and business regulations publicly available; provide clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorize Cuban imports of U.S. products that are now allowed by U.S. regulations. In addition, some improvement in Cuban human rights would be helpful, an objective apparently to be pursued in Havana next week by Secretary of State John Kerry. ==========================================

[1] Gomez, Rapprochement moving forward, Granma (Feb. 22, 2016). Amazingly a 2/23/16 Google search of “Cuba Consortium” did not reveal any U.S. media coverage of this Conference. Secretary Pritzker’s speech was on the website of the U.S. Treasury Department.

[2] Gomez, Malmierca: Obama has support to continue dismantling the blockade, Granma (Feb. 18, 2016).