Economic Challenges Facing Cuba’s New President 

According to John Caulfield, a former Chief of Mission of the U.S. Special Interests Section in Cuba (before the 2015 reopening of the U.S. Embassy in Havana), Miguel Diaz-Canel, when he becomes Cuba’s President of the Council of State on April 19, “will face serious challenges from the moment he takes over. Cuba’s Soviet-style economic model is not working. Raul has acknowledged as much and in 2011 began to implement economic reforms that allowed many Cubans to become self-employed and buy and sell residences. These changes have allowed some Cubans to achieve relative prosperity, while the majority is stuck in low-paying jobs.”[1]

Caulfield added, “Their success caused a negative reaction from inside the Communist Party that saw the rise of these non-state workers as a threat to the system. Recognizing these concerns, Raúl [Castro] told the National Assembly last summer that he took personal responsibility for ‘errors’ and froze the concession of most new business and self-employment licenses.”

This will present Diaz-Canel and the Cuban Communist Party with a dilemma:

  • Pull “Cuba from its economic morass” by introducing “urgent reforms to eliminate economic distortions such as the use of two national currencies and inefficient state industries,” by attracting “private foreign investment to generate new exports and rebuild Cuba’s decaying infrastructure” and by allowing “Cuba’s incipient private sector to grow.”
  • Or reject this reform agenda and thereby halt the creation of private wealth and a threat to the Communist Party’s domination of the island.

The case against reform may have been strengthened by the apparent success of the Mariel Special Development Zone, a deep-water port and adjacent land for industry and distribution businesses on the north shore of the island west of Havana. Currently 10 projects are operational, related to several sectors, including industry, biotechnology and pharmaceuticals, logistics, construction, food processing, and real estate, and this year another  six (Richmeat, Profood Service, Devox Caribe, Bouygues Construcción Cuba, Engimov Caribe, and Nescor) will begin operations while another 18 have been approved and await implementation.along with construction of an Agricultural Terminal, a second business center and other infrastructure.[2]

The Mariel Special Development Zone received another foreign investor on March 29 when a Vietnamese entity signed an agreement to develop an industrial park of 156 hectares in the Zone. Another eight agreements with such entities were signed that day at the conclusion of the visit to the island by Nguyen Phu Trong, general secretary of the Communist Party of Vietnam. One of these agreements called for the construction of a 50 megawatt bio-electrical plant and an agricultural development combined with the use of renewable energy to generate electricity.[3]

On the other hand, as noted in a prior post. Secretary-General Trong in a speech at the University of Havana emphasized the need for the incorporation of market economic measures in communist systems.

At the end of last month there was a public debate in Havana about Cuba’s emerging private sector. A survey of the 200 attendees revealed that those with the highest monthly incomes of 20,000 CUC (roughly $20,000) were the owners of rental houses, paladares (restaurants), musicians, small farmers, and, on a smaller scale, scientists, miners, ministers, workers in the sugar industry, lawyers, and doctors. Havana, Ciego de Ávila and Matanzas, were considered the provinces with the highest incomes in the country. On the other hand, at least 25% of the Cuban population lives below the poverty line, and the average monthly salary for State workers in 2018 rose to 740 Cuban pesos (approximately 30 dollars). The audience also discussed what pattern of inequality the population was politically willing to accept and whether this  which could fracture Communist ideology on the Island.[4]

Overriding all of these issues and problems is the recognized need for Cuba to eliminate their dual currency system. According to Pavel Vidal, a Cuban economist,“It is impossible for Cuba to achieve a significant and sustainable improvement in the productivity of its economy so long as it operates with two national currencies, with multiple exchange rates between them and an official exchange rate that is excessively overvalued.”[5]

However, Vidal said “state enterprises that show permanent losses should be closed or merged instead of being allowed to operate in a ‘financial bubble’ where they are sustained by implicit subsidies received every time they pay for imported inputs using an overvalued exchange rate. This bubble must be burst, and the state sector must be restructured. Enormous amounts of financial and human resources have been wasted in supporting state enterprises with no economic value.” Vidal added that if the Cuban government chooses true currency reform, “it should be accompanied by not only a greater opening to foreign investment but also by liberalization of the private sector. An expansion of the private sector, he said, “would allow Cuba to absorb the unemployment that would be produced from enterprises that go bankrupt.”

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[1] Caulfield, Cuba’s next president faces choice between economy and communism, the Hill (April 4, 2018).   Many of these issues have been discussed in posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Martinez, Promoting development and connecting Cuba to the world (Photos), Granma (April 3, 2018).

[3] Peraza, New accords strengthen strategic relations between Cuba and Vietnam, Granma (April 4, 2018).

[4] Ramirez, Rich “comrades,” Diario de Cuba (April 4, 2018).

[5] Whitefield, Cuba desperately needs to reform currency system, but timing couldn’t be worse, Miami Herald (April 4, 2018).

Raúl Castro To Remain Cuba’s President for At Least Two More Months  

On December 21, 2017, Cuba’s National Assembly determined that Raúl Castro’s term as President would be extended from February 24 to April 19. The stated reason for the extension was the delay in the start of the electoral cycle caused by Hurricane Irma.[1]

Some, however, speculate that the real reason for the extension is trying to cope with Cuba’s many economic and political problems—slower economic growth (if not decline), declining support from struggling Venezuela and increased U.S. hostility. Perhaps a clearer indication of what is happening will be provided by the March meeting of the Central Committee of Cuba’s Communist Party to discuss the results of the economic guidelines, or reforms, introduced under Castro and talk about a strategy for the coming years.[2]

Indeed, during this session of the National Assembly President Castro said, “Next year will also be complicated for the external finances of the nation, however, we will continue credibility of our economy and reiterate to the creditors the fulfillment of the agreed commitments, and we thank support and understanding for the transitory difficulties that we face.” However, Castro did say, “when the National Assembly is constituted, my second and last term [as] . . . the head of the State and the Government [will end] and Cuba will have a new president.”

Simultaneously the Cuban Government announced new regulations on the emerging private and cooperative sectors of the nation’s economy to more closely regulate the income distribution by cooperatives so that no one may earn more than three times of others in the cooperative.  This resulted from investigations revealing that in some non-agricultural cooperatives the president earned fourteen times more than the workers, that this is not a cooperative, but rather a private company and cannot be allowed.

In addition, a cooperative may operate in only one province where it has a legal domicile,  and business licenses will be limited to one per person.

Cuba’s Vice President Marino Murillo, who is also the government’s economy czar, said there will be no new approvals for the time being for non-agricultural cooperatives, while their maximum and minimum earnings will be limited to avoid the existence of de-facto private businesses.

According to Michael Bustamante, an assistant professor of Latin American history at Florida International University, these new regulations “suggest a continued slowing down, if not an undoing, of the economic reforms implemented between 2010 and 2016.”

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[1] Deputies approve extension of the mandate of the provincial assemblies and the National Assembly, Granma (Dec. 21, 2017); Raúl Castro: “Here we are and we will be; free, sovereign and independent, CubaDebate (Dec. 21, 2017); Morales, Evaluates the march of the implementation of the Guidelines, Granma (Dec. 21, 2017); Murillo, The problems we have faced in the Update are more complex and deeper than we had thought, Granma (Dec. 22, 2017); Reuters, Cuba Delays Historic Handover from Castro to New President, N.Y. times (Dec. 21, 2017); Assoc. Press, Castro Confirms He Will Stay Cuba’s President to April, N.Y. Times (Dec. 21, 2017); Londońo, Cuba Delays End of Raúl Castro’s Presidency by Two Months, N.Y. Times (Dec. 21, 2017); Whitefield & Torres, Cuban Leader Raúl Castro will stay in power past February, Miami Herald (Dec. 21, 2107).

[2] As reported in a December 1 comment to a post about Cuba’s elections, Domingo Amuchastegui, a former Cuban intelligence analyst who now lives in Miami, said, “The fatherland is in danger; it is facing very difficult economic circumstances plus the threat of aggression from a historical enemy. Facing difficult circumstances, revolutionary leaders don’t back down. These are not times to enjoy life in Varadero and spend time with the grandchildren.”

 

 

Cuba’s Reaction to U.S. Ordering Removal of Cuban Diplomats 

On October 3, the U.S. ordered the removal of 15 Cuban diplomats from the U.S. as discussed in a prior post. Now we examine Cuba’s reaction to that U.S. decision and order as expressed in the Cuba Foreign Ministry’s lengthy  statement and in press conference remarks by its Foreign Minister, Bruno Gonzalez. A future post will look at other such reactions.

Cuba Foreign Ministry Statement[1]

“The Ministry . . .  strongly protests and condemns this unfounded and unacceptable decision as well as the [false] pretext [purportedly justifying it].”

“The Ministry “categorically rejects any responsibility of the Cuban Government in the alleged incidents and reiterates once again that Cuba has never perpetrated, nor will it ever perpetrate attacks of any sort against diplomatic officials or their relatives, without any exception. Neither has it ever allowed nor will it ever allow its territory to be used by third parties with that purpose.”

“The Ministry emphasizes that the U.S. Government decision to reduce Cuba’s diplomatic staff in Washington without the conclusive results from the investigation and without evidence of the incidents that would be affecting their officials in Cuba has an eminently political character.”

“The Ministry urges the competent authorities of the U.S. Government not to continue politicizing this matter, which can provoke an undesirable escalation and reverse even more bilateral relations, which were already affected by the announcement of a new policy made in June last by President Donald Trump.”

Cuba’s Foreign Minister previously had “warned . . . [the U.S. Secretary of State] against the adoption of hasty decisions that were not supported by evidence; urged him not to politicize a matter of this nature and once again . . . [requested U.S.]  effective cooperation . . . to clarify facts and conclude the investigation.”

“It is the second time, after May 23, 2017, that the State Department ordered two Cuban diplomats in Washington to abandon the country; that the US Government reacts in a hasty, inappropriate and unthinking way, without having evidence of the occurrence of the adduced facts, for which Cuba has no responsibility whatsoever and before the conclusion of the investigation that is still in progress.”

Just as was expressed by the Cuban Foreign Minister to Secretary of State Tillerson on September 26, 2017, “Cuba, whose diplomatic staff members have been victims in the past of attempts . . . [on] their lives, who have been murdered, disappeared, kidnapped or attacked during the performance of their duty, has seriously and strictly observed its obligations under the Geneva Convention on Diplomatic Relations of 1961 referring to the protection and integrity of diplomatic agents accredited in the country, for which it has an impeccable record.”[2]

“Since February 17, 2017, when the U.S. embassy and State Department notified [Cuba of] the alleged occurrence of incidents against some officials of that diplomatic mission and their relatives [starting in] November 2016, arguing that these had caused them injuries and other disorders, the Cuban authorities have acted with utmost seriousness, professionalism and immediacy to clarify this situation and opened an exhaustive and priority investigation following instructions from the top level of the Government. The measures adopted to protect the U.S. diplomatic staff, their relatives and residences were reinforced; new expeditious communication channels were established between the U.S. embassy and Cuba’s Diplomatic Security Department and a Cuban committee of experts made up by law enforcement officials, physicians and scientists was created to make a comprehensive analysis of facts.”

“In the face of the belated, fragmented and insufficient information supplied by the U.S., the Cuban authorities requested further information and clarifications from the US embassy in order to carry out a serious and profound investigation.”

“The U.S. embassy only delivered some data of interest on the alleged incidents after February 21, when President Raúl Castro Ruz personally reiterated to the Chargé d’Affairs of the U.S. diplomatic mission how important it was for the competent authorities from both countries to cooperate and exchange more information. Nevertheless, the data subsequently supplied continued to be lacking in the descriptions or details that would facilitate the characterization of facts or the identification of potential perpetrators, in case there were any.”

“In the weeks that followed, in view of new reports on the alleged incidents and the scarce information that had been delivered, the Cuban authorities reiterated the need to establish an effective cooperation and asked the U.S. authorities for more information and insisted that the occurrence of any new incident should be notified in real time, which would provide for a timely action.”

“The information delivered by the U.S. authorities led the committee of Cuban experts to conclude that this was insufficient and that the main obstacle to clarify the incidents had been the lack of direct access to the injured people and the physicians who examined them; the belated delivery of evidence and their deficient nature; the absence of reliable first-hand  and verifiable information and the inability to exchange with U.S. experts who are knowledgeable about this kind of events and the technology that could have been used, despite having repeatedly stating this as a requirement to be able to move forward in the investigation.”

“Only after repeated requests were conveyed to the U.S. Government, some representatives of U.S. specialized agencies finally traveled to Havana in June, met with their Cuban counterparts and expressed their intention to cooperate in a more substantive way in the investigation of the alleged incidents.  They again visited Cuba in August and September, and for the first time in more than 50 years they were allowed to work on the ground, for which they were granted access to all Cuban facilities, including the possibility of importing equipment, as a gesture of good will that evidenced the great interest of the Cuban government in concluding the investigation.”

“The U.S. specialized agencies recognized the high professional level of the investigation which was started by Cuba and its high technical and scientific capabilities and which preliminarily concluded that, so far, according to the information available and the data supplied by the U.S., there were no evidence of the occurrence of the alleged incidents or the causes and the origin of the health disorders reported by the U.S. diplomats and their relatives.  Neither has it been possible to identify potential perpetrators or persons with motivations, intentions or means to perpetrate this type of actions; nor was it possible to establish the presence of suspicious persons or means at the locations where such facts have been reported or in their vicinity.  The Cuban authorities are not familiar with the equipment or the technology that could be used for that purpose; nor do they have information indicating their presence in the country.”

. Nevertheless, the Ministry reiterates Cuba’s disposition to continue fostering a serious and objective cooperation between the authorities of both countries with the purpose of clarifying these facts and concluding the investigation, for which it will be essential to count on the most effective cooperation of the U.S. competent agencies.”

Cuba Foreign Minister’s Press Conference[3]

Foreign Minister Rodriguez in his lengthy press conference made the following additional points:

  • The decision to expel Cuban diplomats “can only benefit those who intend to reverse the progress [in U.S.-Cuba relations] made in recent years and only follows the interests of a handful of people.”
  • The U.S. decision to expel Cuban diplomats “is clearly a political decision unrelated to the ongoing investigation. It is a reprisal. It is politically motivated and malicious. To date there is no concrete evidence regarding the claims of attacks on U.S. diplomats, with theories being paraded around that can only be described as ‘science fiction.’”
  • The only terrorist attacks to have taken place in Cuba were perpetrated by groups based in the U.S., not by any third country.
  • The incidents were reported by the U.S. Embassy months after they were supposed to have occurred. Cuban experts have not visited diplomatic residences, as the U.S. has refused them entry.
  • The question about the future of the bilateral diplomatic agenda should be put to the U.S. government. That agenda has been adversely affected by the expulsion of the Cuban diplomats; by President Trump’s recent speech to the U.N. General Assembly;[4] and his speech in Miami in June about U.S.-Cuba relations.[5] In short, all of these decisions are rash, and the “U.S. will be responsible for the deterioration of relations between the two countries.”
  • Cuba has not taken any action against the U.S.; it does not discriminate against its companies; it invites U.S. citizens to visit; it favors dialogue and bilateral cooperation; it does not occupy any part of the territory of the U.S. and has not adopted any measures of a bilateral nature. On the contrary, Cuba has favored a respectful course on the basis of sovereign equality, to treat our differences and to live civilly with them for the benefit of both peoples and countries.
  • Since the creation of the Cuban Interests Office in Washington (now our embassy) until this minute, Cuban diplomatic officials have never carried out intelligence activities.

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[1] Cuba Foreign Ministry, Statement (Oct. 3, 2017)

[2] Medical ‘Incidents’ Affecting U.S. Diplomats in Cuba Prompts U.S. To Close Embassy in Cuba and Urge Americans Not to Travel to Cuba, dwkcommentaries.com (Sept. 30, 32017) (discussion of 9/26/17 Rodriguez-Tillerson meeting).

[3] Minute by Minute: Press conference by Cuban Foreign Minister Bruno Rodríguez Parrilla, Granma (Oct. 3, 2017); Bruno Rodríguez: Cuba has never carried out attacks against diplomats (+ Video), CubaDebate (Oct. 3, 2017).

[4] President Trump Condemns Cuba at United Nations, dwkcommentaries.com (Sept. 21, 2017).

[5] President Trump Announces Reversal of Some U.S.-Cuba Normalization Policies, dwkcommentaries.com (June 19, 2017).

U.S. Continues To Suspend Part of Its Embargo of Cuba 

On July 14 U.S. Under Secretary of State for Political Affairs Thomas Shannon notified appropriate Congressional committees that the Trump Administration would suspend Title III of the Helms-Burton Act (a/k/a the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act) for a six-month period beyond August 1. The law requires Congressional notification at least 15 days before a suspension is to begin.[1]

Title III allows former owners of commercial property expropriated by Cuba to sue foreign companies and the Cuban government for using or “trafficking” in those confiscated holdings.

But ever since the enactment of the Helms-Burton Act, every president has routinely suspended Title III at six-month intervals. Such suspensions have been prompted by U.S. fear of alienating important U.S. trading partners such as Canada, Mexico, and EU countries from the filing of a potential tidal wave of lawsuits in U.S. federal courts brought by persons whose Cuban properties had been expropriated against companies from those U.S. trading partners that use Cuban tourism properties, mining operations, or seaports.[2]

This suspension by the Trump Administration is the first action on Cuba since President Trump announced his new direction on U.S.-Cuba relations during a June 16 speech in Miami. It is the latest sign that President Trump is not fully reversing President Barack Obama’s opening of relations with Cuba.[3]

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[1] U.S. State Dep’t, U.S. Determination of Six-Month Suspension Under Title III of LIBERTAD (July 14, 2017); Whitefield, Trump to suspend lawsuit provision of Helms-Burton in August, Miami Herald (July 17, 2017); Assoc. Press, Trump Administration Again Suspends a Part of Cuba Embargo, N.Y. Times (July 14, 2017).

[2] After the December 17, 2014, announcement by President Obama and Castro that the two countries were embarking on a path of normalization, they have engaged in discussions or negotiations about obtaining Cuban payment of U.S. persons’ claims for expropriation, now believed, with interest, to total at least $ 8 billion. Although Cuba has recognized that it has an international legal obligation to pay such claims and has paid expropriation claims from other countries and although Cuba has an economic and political interest in paying these U.S. claims, Cuba does not have the cash to do so and instead has asserted claims against the U.S. for alleged damage from the U.S. embargo and other acts. See these posts to this blog: Resolution of U.S. and Cuba’s Damage Claims (April 4, 2015); Resolving U.S. and Cuba’s Damage Claims (Dec. 13, 2015); U.S. and Cuba Discuss Their Claims Against Each Other (July 30, 2016).

 

[3] President Trump Announces Reversal of Some U.S.-Cuba Normalization Policies, dwkcommentaries.com (June 19, 2017).

 

Economic Problems Bedevil Cuban Government and President Raúl Castro

A prior post reported that Cubans want greater economic growth and opportunity while also expressing pessimism about that happening. The grounds for that pessimism are highlighted in a Miami-Herald article about the many economic challenges facing President Raúl Castro In the last year of his presidency.[1]

This is the article’s big picture. “Many state enterprises are barely limping along, there are jitters as the economy of Cuba’s Venezuelan benefactor spirals downward, the rules of the road are murky for private businesses, salaries are low, a messy dual currency system still needs to be unified and Cuba is in dire need of much more foreign investment.”

These problems will not be easy to solve. “Many of Cuba’s economic problems are interrelated and the timing may not be good for any drastic moves — especially with Cuba’s relationship with the United States still up in the air.”

Yes, it is true that “Cuban officials are estimating economic growth of around 2 percent this year, but that figure is based on the assumption that oil prices will go up and tourism will keep growing.” According to Cuban economist Omar Everleny Pérez Villanueva, the 2 percent growth objective is “very ambitious.” He could have said “unrealistic” as His model puts the Cuban economy in negative territory with a decline of between .3 percent and 1.4 percent in 2017.”

Here are specifics on some of the economic challenges facing the island:

Maintaining Exports of professional services. Medical services by Cuban health care professionals on foreign medical missions in recent years have provided the Cuban government with a major source of foreign currency. In recent years, however, this source of foreign currency has declined with the implosion of the Venezuelan economy being a major factor.

Coping with Venezuela’s Economic Implosion. Venezuela’s problems for Cuba go beyond the decline in foreign medical mission income for Cuba. Since last July, oil deliveries from Venezuela have dropped as much as 60 percent. Venezuela used to send crude oil to Cuba for blending at the latter’s Cienfuegos refinery, but production at the Cuban refinery has fallen by half with the reduction in shipments from Venezuela.

Eliminating Cuba’s dual currency system. Cuba has two currencies: the Cuban peso (CP), which is generally used by the Cuban population and the Cuban convertible peso (CUC), which used by tourists and foreign companies, and the Cuban government for years has had a goal of eliminating this system. According to Carmelo Mesa-Largo, a Cuban economist and professor emeritus at the University of Pittsburgh, “In 2016, the budget deficit was 7.3 percent of GDP, and because of the already difficult economic situation, they have had to print money. The budget deficit may be even higher this year — perhaps 12 percent — generating even more inflation.”

Increasing public salaries. “There are constant complaints about low public salaries. A private cab driver, for example, can earn more than a physician or other professionals. According to Mesa-Lago, even though salaries went up in 2015, buying power was just 62 percent of what it was in 1989. Nominal salaries could be increased by printing more CP, ”but with inflation, they would have to raise salaries even more to have real wage growth.” And that could set off a further inflationary spiral.

Attracting foreign investment. The Cuban government has made it clear that foreign investment is a cornerstone of Cuban economic development going forward, but so far investment is lagging. “Diplomats, business executives and members of the U.S. Congress who favor lifting the embargo all concur that Cuba needs to reform its legal system to offer foreign investors better legal guarantees, make it easier to sign contracts and allow them to directly hire their Cuban employees.” The Cuban government, however, does not want to do anything that potentially could be destabilizing and cause a weakening of political control.

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[1] Whitefield & Torres, The next year will determine Raúl Castro’s economic legacy, Miami Herald (Mar. 23, 2017)   Previous posts in this blog have discussed many aspects of the Cuban economy as listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

United Kingdom Promotes Engagement with Cuba

 

The United Kingdom’s Foreign Secretary, Philip Hammond, visited Cuba in late April to celebrate and promote his country’s engagement with Cuba. It was the first visit by a U.K. foreign secretary since the Cuban Revolution of 1959.[1]

Before the trip, the Foreign Secretary said, “Britain and Cuba have outlooks on the world and systems of government that are very different. But as Cuba enters a period of significant social and economic change, I am looking forward to demonstrating to the Cuban government and people that the UK is keen to forge new links across the Atlantic.”

“That is why Cuba and the UK are set to reach new cooperation agreements on energy, financial services, education and culture, to the benefit of both our nations. [This also] is an opportunity to hear for myself what Cuba thinks about its present challenges and where it sees its future.”

Upon his arrival in the island, Hammond said that Britain was “keen to forge new links” with the Caribbean nation.”

During the visit the U.K. and Cuba reached an agreement to restructure Cuba’s medium and long-term debt with the UK, which should contribute to the expansion of economic, commercial and financial ties between the two nations.

On April 30 after meeting with President Raúl Castro, Hammond said Castro ”is espousing a programme of gradual change, embracing the realities of the world we live in. I was very struck by the fact that he described the Internet as the reality of our world, spoke positively about the benefits the Internet could bring.” In addition, “Castro is seeking to position himself in the middle between those who are resisting change and those who want much faster, more radical change.” In particular, Castro said Cuba lacks “management expertise in banking services’ and this is an area where the UK has something very clear to offer.” (Below is a photograph of Castro and Hammond.)

hammond_meets_castro-large_trans++eo_i_u9APj8RuoebjoAHt0k9u7HhRJvuo-ZLenGRumA

British exports to Cuba rose by almost a third last year compared to 2014, and Britain was the second-biggest source of foreign tourists to Cuba after Canada, with 160,000 Britons making the trip in 2015.Education is seen as another growing area of cooperation, with significant numbers of Cuban students interested in higher education in the UK.

One of the problems Britain faces in such engagement is the extraterritorial effects of the U.S. embargo. Hammond commented, “We have also had discussions with the U.S. about the challenges for British and other European banks in doing business with countries that face U.S. sanctions. There are some problems here but we are working through them with the U.S. and hope to make progress in a way that will enable British businesses to do more business with Cuba.

Conclusion

This is but the latest European promotion of engagement with Cuba. For example, earlier this year President Raúl Castro visited France, where he was the official guest for a state dinner hosted by French President François Hollande, who urged U.S. President Obama to fully lift the embargo against Cuba.[2]

France sees strong potential for some of its largest companies to grow their presence in Cuba. Pernod Ricard SA is the biggest investor in Cuba through its ownership of the Havana Club brand of rum, but others are lining up such as hotels group Accor SA and construction group Bouygues SA. France also wants to boost exports to Cuba, which totaled €131 million ($143 million) in the first 11 months of 2015, down from €157 million in 2014. France is well positioned to cash in on Cuban growth after it played a leading role in negotiating debt forgiveness for Cuba at the end of last year and after President Hollande said this February that around half of Cuba’s remaining dues to France will be used to create a €220 million fund to invest in Franco-Cuban projects.

Ahead of the state dinner, French and Cuban officials signed bilateral agreements covering tourism, rail transport and trade. They also signed off on a road map for France’s development agency to begin investing in Cuban infrastructure.

The efforts of the U.K., France and other European countries to expand trade with Cuba are too often ignored in U.S. discussions of ending the U.S. embargo on the implicit and unexamined assumption that the U.S. is Cuba’s only potential trading partner. Eliminating that assumption provides another reason for the U.S. to eliminate the embargo as soon as possible in order to enhance U.S. efforts to expand trade with Cuba.

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[1] U.K. Foreign Ministry, Foreign Secretary Visits Cuba (April 28, 2016); Press Ass’n, Philip Hammond arrives in Cuba to help “forge new links,” Guardian (April 28, 2016); Reuters, Britain Praises Cuba’s Castro for Embracing Realities of Modernity, N.Y. Times (April 30, 2016); Alexander, Philip Hammond Meets Raul Castro during historic visit to Cuba, Telegraph (April 30, 2016); Raúl receives British Foreign Secretary, Granma (May 1, 2016).

[2] Horobin, France Seeks Closer Ties with Cuba During Castro Visit, W.S.J. (Feb. 1, 2016); Assoc. Press, France: Castro Finds Advocates in Paris, N.Y. Times (Feb. 1, 2016).

 

Additional Details About U.S.-Cuba Secret Discussions Leading up to the December 17, 2014, Public Announcement of Rapprochement

A prior post covered the surprising December 17, 2014, announcement of U.S.-Cuba rapprochement while another post discussed the initial public information about the preceding secret U.S.-Cuba negotiations about normalization; yet another post integrated that information into previous public information about U.S.-Cuba relations in President Obama’s second presidential term, 2013-2014.

Now Peter Kornbluh and William LeoGrande. both leading scholars on the relationship between the two countries, have added the following additional details about such previous secret discussions:[1]

  • In response to the January 2010 devastating Haiti earthquake, the U.S. and Cuba engaged in unprecedented cooperative disaster relief in that country.
  • Thereafter in 2010-2012 two top State Department officials—Cheryl Mills, the Chief of Staff for Secretary of State Hillary Clinton, and Julissa Reynoso, the Deputy Assistant Secretary of State for Western Hemisphere Affairs—had secret discussions with Cuban officials that initially focused on Cuba’s releasing U.S. citizen Alan Gross from a Cuban prison and the U.S.’ allowing the wives of two of the Cuban Five to visit their husbands in U.S. prisons.
  • By September 2011, the Cubans had explicitly proposed swapping the Cuban Five for Alan Gross, but the U.S. was not prepared to do so. Instead, as a show of good faith, the U.S. arranged for the wives of two of the Cuban Five to secretly visit their husbands in U.S. prisons while Cuba permitted Judy Gross regular visits with her husband in a military hospital in Havana.
  • In May 2012, Clinton received a memo from her team that stated: “We have to continue negotiating with the Cubans on the release of Alan Gross but cannot allow his situation to block an advance of bilateral relations…The Cubans are not going to budge. We either deal with the Cuban Five or cordon those two issues off.”
  • This May 2012 memo arrived soon after Clinton and President Obama had returned from that April’s Sixth Summit of the Americas where they had been chastised by heads of states furious over the U.S. stance on Cuba. Afterwards Clinton “recommended to President Obama that he take another look at our embargo. It wasn’t achieving its goals and it was holding back our broader agenda across Latin America.”
  • After his reelection in November 2012, President Obama approached Massachusetts Senator John Kerry about replacing Clinton as secretary of state and raising a new approach to Cuba. Kerry was receptive. As Chairman of the Senate Foreign Relations Committee, he had been a vocal critic of the USAID democracy promotion programs that financed Gross’ secret missions to Cuba and also had long opposed the US economic embargo of the island.
  • During the U.S.-Cuba secret discussions in Canada in 2013=2014 that were discussed in a prior post, The U.S. was not willing to talk about the USAID programs or the status of Guantán­amo Bay. Cuba, on the other hand, was not willing to discuss human rights or U.S. fugitives living in their country.
  • In September 2013 Senator Dick Durbin (Dem., IL) suggested to National Security Advisor Susan Rice that the U.S. should see about getting Pope Francis involved in helping the two countries resolve their differences.
  • In February 2014, Senator Patrick Leahy had his staff collaborate with former White House counsel, Greg Craig, to draft a 10-page memo of options “to secure Mr. Gross’ release, and in so doing break the logjam and change the course of U.S. policy towards Cuba, which would be widely acclaimed as a major legacy achievement [for President Obama].” The document, dated February 7, laid out a course of action that would prove to be a close match with the final accord.
  • Apparently also in or about February 2014, Leahy sent a confidential message to Cuban Cardinal Jaime Ortega, asking him to encourage the Pope to help resolve the prisoner issue. Drawing on the close ties between Obama’s Chief of Staff, Denis McDonough, and Cardinal Theodore McCarrick of Washington, D.C., the White House also “got word to the Vatican that the president was eager to discuss” Cuba at the upcoming upcoming March private audience with the Pope.
  • In early March 2014, a small group of Cuba policy advocates, including representatives of a newly formed coalition for changing U.S. policies regarding Cuba, met with Cardinal Seán O’Malley in the rectory of the Cathedral of the Holy Cross in Boston. The advocates of change explained the recent trends, the conversations with President and others in the administration and Congress and indicated this was a historic moment, and a message from the Pope to President Obama would be significant in moving the process forward. A letter from Senator Leahy was given to Cardinal O’Malley urging him to focus the Pope’s attention on the “humanitarian issue” of the prisoner exchange.
  • During this same time period, Leahy personally delivered a similar message to Cardinal McCarrick and arranged for yet another to be sent to Cardinal Ortega in Havana. There now were three cardinals urging the Pope to put Cuba on the agenda with Obama.
  • At the private audience later that month (March 27), Obama told the Pope that the U.S. had something going with Cuba and that it would be useful if the Pope could play a role.” (Other details about the audience were provided in a prior post.) A few days later, Francis summoned Cardinal Ortega to enlist his help.
  • On May 1, 2014, Leahy, along with Senators Carl Levin (Dem., MI) and Dick Durbin (Dem., IL) and Representatives Chris Van Hollen (Dem., MD) and Jim McGovern (Dem., MA) met in the Oval Office with Obama, Vice President Joe Biden, and National Security Advisor Susan Rice. The legislators urged Obama to press for Gross’ release and replace the policy of hostility with one of engagement. “You said you were going to do this,” McGovern reminded the president. “Let’s just do it!” Obama had a non-committal response,”We’re working on it” and gave no hint of the back-channel diplomacy then well underway.
  • On May 19, 2014, the previously mentioned coalition released an open letter to Obama signed by 46 luminaries of the U.S. policy and business world, urging the president to engage with Cuba. The signatories included former diplomats and retired military officers—among them former U.N. Ambassador Thomas Pickering; Cuban-American business leaders like Andres Fanjul, co-owner of a Florida-based multinational sugar company; and John Negroponte, George W. Bush’s director of national intelligence. The same day, not coincidentally, the conservative US Chamber of Commerce announced that its president, Tom Donohue, would lead a delegation to Cuba to “develop a better understanding of the country’s current economic environment and the state of its private sector.”
  • During the summer of 2014 the Pope wrote forceful, confidential letters to Obama and Raúl Castro, imploring the two leaders“to resolve humanitarian questions of common interest, including the situation of certain prisoners, in order to initiate a new phase in relations.”
  • To safeguard his communications, the Pope sent both letters via papal courier to Havana—with instructions to Cardinal Ortega to personally deliver the message into the two presidents’ hands. After delivering the Pope’s letter to Raúl Castro, Ortega then sent his top aide to Washington to advance his clandestine diplomatic mission to deliver the other letter to Obama. But arranging a secret face-to-face meeting with President Obama was easier said than done. Alerted to the problem, Cardinal McCarrick conferred with White House officials, who enlisted his help as a secret back-channel go-between. In early August, McCarrick traveled to Cuba carrying a note from Obama that asked Ortega to entrust McCarrick with delivering the Pope’s letter to the White House. But Ortega’s papal instructions were to deliver the message himself. McCarrick, therefore, left Cuba empty-handed.
  • Back in Washington, McCarrick worked with McDonough at the White House to arrange a secret meeting for Ortega with the President. On the morning of August 18, Ortega gave a talk at Georgetown University—providing a cover story for his presence in Washington—and then quietly went to the White House. (To make sure the meeting did not leak, U.S. officials kept Ortega’s name off the White House visitor logs.) Meeting with the President on the patio adjacent to the Rose Garden, Ortega finally completed his mission of delivering the Pope’s sensitive communication, in which he offered to “help in any way.”
  • In October 2014, at the Pope’s invitation, the two sides met at the Vatican and hammered out their final agreement on the prisoner exchange and restoring diplomatic relations. The U.S. representatives, Rhodes and Zuniga, also noted Obama’s intention to ease regulations on travel and trade, and to allow US telecom companies to help Cuban state enterprises expand internet access. They acknowledged these initiatives were aimed at fostering greater openness in Cuba. Cuban officials said that while they had no intentionof changing their political system to suit the United States, they had reviewed the Americans’ list of prisoners jailed for political activities and would release 53 of them as a goodwill gesture. The Pope agreed to act as guarantor of the final accord.
  • On October 12, the New York Times published an editorial calling for ending the U.S. embargo of Cuba and for a new relationship between the two countries; it turned out to be the first of a series of editorials on various aspects of the relationship.[2] These editorials were the work of Ernesto Londoño, a new member of the Editorial Board and a native of Colombia. He talked to administration officials, Senator Leahy’s office, and the new coalition, but recently said, “There was really no collusion or formal cooperation in what they were doing and what we were doing. The Times simply saw an opportunity to push the policy it advocated forward. We figured it was worthwhile to give it a shot.”
  • On November 6, 2014, Obama’s National Security Council met to sign off on the details. Later that month, the negotiating teams convened one last time in Canada to arrange the logistics of the prisoner exchange.

These additional details about the over two years of previously secret negotiations should be merged with the earlier post about President Obama’s Second Term Record Regarding Cuba, 2013-2014. Together they demonstrate the diplomatic skill of that Administration in achieving this historic breakthrough that will benefit both countries.

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[1] Kornblu & LeoGrande, Inside the Crazy Back-Channel Negotiations That Revolutionized Our Relationship with Cuba, Mother Jones (July 2015)  This information will be incorporated in a new edition of their book: Back Channel to Cuba: The Hidden History of Negotiations Between Washington and Havana that will be published this October by the University of North Carolina Press.

[2] Previous posts covered the other Times editorials that commended Cuba’s foreign medical missions (Oct. 19), recommended normalization (Oct. 26) and prisoner exchanges (Nov. 3) and criticized USAID programs on the island (Nov. 10), the U.S. Cuban medical parole program (Nov. 17) and the U.S. designation of Cuba as a “state sponsor of terrorism” (Dec. 15).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reactions to Reopening of U.S. and Cuba Embassies and Other Issues Regarding U.S.-Cuba Normalization

As discussed in an earlier post, on the morning of July 20, 2015, Cuba officially opened its Embassy in Washington, D.C., and the United States did likewise in Havana although the ceremonial opening of the latter will be on August 14 when Secretary of State John Kerry goes to Havana to preside over that event. Another post, that afternoon’s joint press conference at the U.S. Department of State by U.S. Secretary of State John Kerry and Cuba’s Foreign Minister Bruno Rodriguez; yet another post, recent comments about Cuba by the White House Press Secretary.

Now we look at the reactions to the significant issues raised by these events: (1) restoration of diplomatic relations; (2) future changes in Cuba; (3) future changes in Cuban human rights; (4) ending the U.S. embargo (or blockade) of Cuba; (5) altering or terminating Cuba’s lease of Guantanamo Bay to the U.S.; (6) ending U.S. Radio and TV Marti; (7) ending USAID and other covert U.S. “democracy” programs in Cuba; (8) Cuba’s returning U.S. fugitives; and (9) nominating and confirming the appointment of an U.S. ambassador to Cuba.

1. Restoration of U.S.-Cuba Diplomatic Relations?

There has been substantial U.S. approval of the restoration of diplomatic relations.

According to the Center for Democracy in the Americas (CDA), for instance, 12 public opinion polls conducted and released since January 1 show that “public support for the Cuba opening is strong, growing, and pervasive. Support for the new policy is bipartisan. It is significantly high among segments of voters — such as Hispanics — that candidates running for office increasingly care about. Most of all, the latest research shows that public support is rising. For example, support for ending the embargo was measured in July by the Chicago Council on Global Affairs at 67%, and earlier this year by Gallup at 59% and by the Associated Press at 60%.”[1]

Moreover, CDA sees “evidence that public support for America’s new Cuba policy is exerting its force on policymakers in the U.S. Congress.” It points to last week’s action of the Senate Appropriations Committee’s approving amendments eliminating House measures that would impede normalization in various ways[2] and to Republican legislators—Senator Dean Heller (NV) and Representative Bradley Byrne (AL)–who recently joined the ranks of supporters of normalization.

Despite the vigorous opposition to normalization repeatedly expressed by Cuban-Americans in Congress—Senators Marco Rubio (Rep., FL) and Robert Menendez (Dem., NJ) and Representatives Ileana Ros-Lehtinen (Rep., FL) and Mario Diaz-Balart (Rep., FL) [3]—there has been little organized opposition to normalization in the Cuban-American community, especially in Florida.[4]

This assessment has been confirmed by prominent Cubans in the U.S. and on the island. Pedro Freyre, a Cuban-born Miami lawyer with a national law firm representing several U.S. and foreign clients seeking to do business in Cuba and a former hardliner himself, said, “It’s over and done in Miami. It died with a whimper.” Indeed, he added that President Obama’s new policy was now widely accepted by South Florida’s 1.5 million Cuban exiles. Similar views were expressed in the Miami Herald by Mike Fernandez, a healthcare millionaire and Bush supporter, who said, “Cuban-Americans everywhere, but especially the diaspora in South Florida, have been awakening to the reality that Cuba’s isolation was and is not a sustainable strategy. It’s time to accept change. Let us not heed those relatively few voices who would go on continuing to trap our minds in hatred.” Carlos Alzugaray Treto, a former Cuban diplomat who is close to President Raúl Castro and his brother Fidel, put it best. He said, “The genie is out of the bottle. And once it’s out, you’re not going to be able to put it back in.”

Senator Amy Klobuchar (Dem., MN), who is the author of a bipartisan bill to lift the embargo, said this must be done for the U.S. to avoid losing investment opportunities that will come with loosening of travel restrictions to the island. She said, “Once millions of American tourists are going, they will need places to stay and they will need food to eat. … So when they come, they are going to be starting to sleep in Spanish hotels and eat German foods because those countries will be able to supply what they need in the tourism industry, not to mention the computers and Wi-Fi and everything else.”[5]

James Williams, the President of Engage Cuba, a major bipartisan group promoting this normalization, issued a statement on the reopening of embassies. He said, “we begin a new chapter of engagement between our two countries. American diplomats will now be much better equipped to engage with the Cuban people and civil society. They will be in a stronger position to elevate issues of concern, like human rights, as well as expanding on areas of cooperation with Cuba.” He pointed out that the “vast majority of the American people, and 97% of the Cuban people support opening relations. We applaud both governments for taking this important step to move forward beyond the Cold War policies of the past and call on Congress to play a constructive role at this historic moment of transition.”[6]

John Dinges, Associate Professor at Columbia University’s School of Journalism and an expert on U.S.-Cuba relations, said for the U.S. “the new relationship with Cuba removed a stumbling block in relations with the entire region, where the US attitude [was] considered irrational and stupid.”[7]

However, others argue that this change is misguided and erroneous. For example, Edward Gonzalez, professor emeritus of political science at U.C.L.A., stated that “in the face of potentially destabilizing change and high expectations at home, Cuban officials are tightening state controls in the short term.” Moreover, “given the regime’s totalitarian proclivity and apparatus, the state’s repression of dissidents and civil society, and its control over the lion’s share of the island’s economy, it is likely to continue into the distant future.” Therefore, he continues, the new U.S. engagement with Cuba “makes the [U.S.] complicit in propping up the regime both economically and politically, while leaving Cuban society even more isolated and defenseless vis-à-vis the all-powerful, coercive state.”[8]

Moreover, Senator Marco Rubio and former Florida Governor Jeb Bush, currently two of the many contenders for the Republican nomination for president in 2016, have said that if elected president in 2016, they would rescind the diplomatic relations. And Senator Tom Cotton (Rep., AK) has pledged to “work to maintain and increase sanctions on the regime, block the confirmation of a new ambassador, demand the extradition of U.S. fugitives from justice, and hold the Castro regime accountable.”[9]

Secretary of State John Kerry in his July 20 interviews,[10] responded to these threats to rescind the relations with Cuba. Kerry said that whoever is elected president in 2016, including Marco Rubio, will have “the ability to make a decision [on whether or not to rescind the re-establishment of diplomatic relations with Cuba]. Congress, obviously, has an ability to have an impact on that.” [11] But I think it would be a terrible mistake [to rescind such diplomatic relations]. The vast majority of the American people believe this is a very good thing to do. It doesn’t make sense. I mean, we had diplomatic relations with the Soviet Union. We had diplomatic relations with then-called Red China. We have to have relationships with countries to do business. And American citizens get hurt when we don’t do that.” Moreover, Kerry added, “I believe . . . President [Obama] has taken an irreversible step. I do not believe a next president, Republican or Democrat, will change it.”

Kerry continued, “Given the fact there are so many Cuban Americans, people who have family in Cuba, to not have a relationship where we can advocate for people, advocate for human rights, advocate for fairness, for elections, for democracy, for travel, for engagement, and all these things that make a difference in the quality of life of Cubans would be a terrible, terrible mistake. So I think, as time goes on, people will see the benefits that come from this policy.”

2. Future Changes in Cuba?

As Foreign Minister Rodriguez’s July 20 statement and Secretary Kerry’s statements made clear and as both governments previously had recognized, the opening of the embassies did not mean the process of normalization had been completed. Indeed, it has just started.

Secretary Kerry, in his interviews, observed, There are “key issues in the normalization process, and . . . [Minster Rodriguez and I] both said today that it will be long and complex. . . . [T]he measure of progress and success is really going to come from what happens in the next months as we go through this early diplomatic rekindling of a relationship. My suspicion is that there’s a possibility it could move faster than people think, simply because I think the Cuban people want it. And as we are there doing diplomacy, more present, able to engage, we actually can work at these kinds of issues more effectively than we’ve been able to for the last 50, 60 years.”

Kerry added that if Cuba is “willing to embrace it, we can bring them a tremendous leap in their economy. We could bring a better standard of living to their people. We can bring technology. We can bring various modern instruments of education, of health delivery, of communications. And I believe that over time things will change . . . at a pace that will be acceptable and, frankly, helpful to Cuba.” Kerry also said, the U.S. wants to see “a true, deep engagement [by Cuba], a willingness to work through these issues. There’s so much that we can cooperate on right now. We want to cooperate on law enforcement, . . . the environment, . . . our visas, . . . health, education, the rights of people, . . . hemispheric issues and interests like the war in Colombia or the relationship with Venezuela.”

Although not in direct response to the reopening of the embassies, Cuba’s President Raúl Castro in his July 15 speech to Cuba’s legislature (the National Assembly of People’s Power)[12] asserted, “We will continue the process of transformations in Cuban society at our own pace, which we have sovereignly chosen, with the majority support of the people, in the interest of constructing a prosperous and sustainable socialism, the essential guarantee of our independence.” (Emphases added.) He reiterated this theme near the end of his speech with these words: “Changing everything which must be changed is the sovereign and exclusive domain of Cubans. The Revolutionary Government is willing to advance in the normalization of relations, convinced that both countries can cooperate and coexist in a civilized manner, to our mutual benefit, beyond the differences we have and will have, thus contributing to peace, security, stability, development and equity in our continent and the world.” (Emphases added.)

A New York Times editorial said, “The full normalization of relations between the United States and Cuba will take years and will be an arduous process. Issues that will be hard to resolve include the disposition of American property the Cuban government seized in the 1960s, and the fate of the United States Navy base in Guantánamo Bay, which the Cuban government considers an illegally occupied territory.”[13]

Professor Dinges offered a similar assessment of the future. He said, “’normal’ relations are not compatible with the [U.S.] travel ban, with [the U.S.] economic embargo, with a recent history of semi-clandestine operations by the [USAID] to promote economic and social discontent. I hope to see in the near future gestures of friendship and rapprochement. For the [U.S.], it is important to dismantle the Guantanamo prison, and the minimization of military forces at the base. On behalf of Cuba, a gesture of detente toward the Miami Cubans would not cost anything and could have huge benefits. . . . There is distrust, there is a long history of [U.S.] aggression [against Cuba]. . . . [He believes future] “changes will be economically, technically, diplomatically. It would be illusory to expect radical changes in political structures in Cuba. Equally unrealistic to think that the US will stop talking about democracy and human rights.”

3. Future Changes in Cuban Human Rights?

Probably the leading U.S. desire for future changes in Cuba is with respect to human rights. For example, in one of his July 20 interviews, Kerry said Cuba does not “want [domestic] interference, but they know we’re not going to stop raising human rights issues. We made that very clear. . . . [W]e’re not giving up the DNA of the [U.S.], which is a deep commitment to human rights, to the values of democracy, freedom of speech, and so forth. So those . . . will be on the agenda. But on the other hand, the great step forward here is that neither of us . . . [is] taking one of our issues of contention and making it a showstopper. We want to engage, and when you get to that point, that’s what begins to break down the barriers.”

Kerry also told Andrea Mitchell, “There’s been a little bit of give . . . [by Cuba] with respect to some agreement on human rights. And I think that over time the elections discussion and the more pointed human rights issues are going to be very much part of the discussion. They are in every country where we have an embassy and an ambassador. We are fearless in our determination to walk in and talk to the authorities and give them a shared our sense of the problems that exist.”

According to the non-governmental Cuban Commission for Human Rights and National Reconciliation, there were 2,822 politically related detentions in the first six months of 2015, less than half the 5,904 registered in the same period last year. Many of those detained this year, however, report being treated more roughly, however.[14]

The previous source also reports, “more than 20 U.S. lawmakers have come to Cuba since February without meeting with opposition groups that once were an obligatory stop for congressional delegations.” This was apparently due to “Cuban officials . . . [having] made clear that if Congress members meet with dissidents, they will not get access to high-ranking officials such as First Vice President Miguel Diaz-Canel, the man expected to be the next president of Cuba” and to U.S. assessment that “talking with Cuban leaders is clearly the most promising way to promote reform on the island.”

On the issue of Cuban human rights, I submit that there is an enormous cognitive dissonance in the minds of U.S. opponents of normalization. Here are the reasons for that conclusion:

  • First, any objective student of history has to conclude that the U.S., especially since the start of the Cuban Revolution in 1959, has committed and threatened serious acts of hostility towards Cuba, including the embargo, the 1961 U.S.-supported invasion of Cuba’s Bay of Pigs, the 1962 threatened bombing of Cuba during the Cuban Missile Crisis, the embargo of the island and CIA attempts to assassinate Cuban President Fidel Castro. Moreover, U.S. hostility toward Cuba started at least in 1898 when it intervened in Cuba’s war of independence from Spain. Indeed, Foreign Minister Rodriguez’ July 20 speech referred to the late 19th century warning by José Marti of the U.S. “excessive craving for domination [over Cuba].”
  • Second, Cuba, therefore, has good reason to be fearful of the much larger and more powerful U.S. and as a result to take steps to protect itself against such perceived threats by restricting dissent. What would you do if you were in the Cubans’ shoes? It, therefore, will take time for Cuba to develop a sense of trust of the U.S. and as a result modify its restrictions on free speech and assembly.
  • Third, the self-proclaimed advocates of Cuban human rights like Rubio and Jeb Bush do not appear to be aware of the first two points. In addition, they apparently do not appreciate that their very hostility towards Cuba and normalization, purportedly on the ground of promoting Cuban human rights, instead contributes to Cuban skepticism about the good intentions of the U.S. and to the prolonging of Cuba’s restrictions on free speech and other civil liberties.

4. Ending the U.S. Embargo of Cuba?

Ending the embargo or blockade, of course, is a key demand by Cuba, and President Obama has asked the Congress to do just that. As discussed in previous posts, various bills to end the embargo have been introduced in this Session of the Congress, and supporters of normalization or reconciliation of the two countries, like this blogger, urge the Congress to approve such bills as soon as possible.

Such congressional action is in the U.S. national interest because the embargo has failed for over 50 years to produce positive change in Cuba, the embargo clearly has harmed or damaged the island’s economy, and Cuba has insisted on its removal as a key requirement for full normalization of relations.

In addition, there are at least two additional reasons for ending the embargo that this blogger has not seen mentioned in all the public discussion of this issue.

  • First, last October at the U.N. General Assembly Cuba alleged that the damage to Cuba from the embargo or blockade totaled $1.1 trillion, and the longer the embargo remains in effect that number will only increase. For a U.S. business this would require at least a footnote to its balance sheet identifying this as a contingent liability and explaining whatever reasons the business has for challenging the claim or the alleged amount of the claim. The rational action for such a business would be to terminate the conduct allegedly causing the damage, especially when it is not producing some benefit to the business.
  • Second, because of the U.S.-Cuba rapprochement of last December, other countries, especially the European Union and its members, are accelerating their efforts to obtain beneficial trade arrangements with Cuba. In short, the longer the U.S. waits to end the embargo, the further behind the U.S. will be with respect to competitors from around the world seeking to do business with Cuba.

Wake up, Congress!

5. Altering or Terminating the Cuba-U.S. Lease of Guantanamo Bay?

As previously noted, Foreign Minister Rodriguez at the July 20 reopening of the Cuban Embassy and at the subsequent joint press conference with Secretary Kerry reiterated Cuba’s request or desire to have its lease of Guantanamo Bay to the U.S. terminated and the territory returned to Cuba. Although the Foreign Minister did not set forth any alleged legal basis for this claim, he did mention that the 1906 lease occurred during a period of U.S. military occupation of the island that “led to the usurpation of [this] piece of Cuban territory”and thereby suggested that the lease was unfairly or coercively obtained.

Interestingly Rodriguez did not mention a previous legal theory advanced by the Fidel Castro regime: that the lease purportedly runs in perpetuity and, therefore, is illegal under Cuban law. Nor did Rodriguez mention another theory for ending the lease: the U.S. operation of a prison/detention facility at Guantanamo that allegedly is not permitted by the lease and, therefore, the U.S. has breached the lease.[15]

At that same joint press conference, Secretary Kerry immediately rejected U.S. willingness to return Guantanamo to Cuba. However, there were caveats in his comment: he said, At this time, there is no discussion and no intention on our part at this moment to alter the existing lease“ and “I can’t tell you what the future will bring but for the moment that is not part of the discussion on our side.” (Emphasis added.) This was reiterated, with similar qualifications, on July 22 by National Security Advisor Susan Rice at a White House press conference.[16] She said, “We’ve been clear that we’re not, at this stage, at all interested in changing the nature of our understanding and arrangements on Guantanamo.  And they may choose to raise it, but we’ve been equally clear that, for us, that’s not in the offing at the present.” (Emphasis added.) Do these caveats indicate an U.S. willingness in the future to discuss altering or even terminating the lease? I could understand a lease amendment increasing the amount of the rent and perhaps making administrative changes, but would be surprised if the U.S. would be willing to discuss termination of the lease and returning Guantanamo to Cuba.[17]

Although Cuba has not mentioned the U.S. operation of a detention facility at Guantanamo and the alleged U.S. torture of some of the detainees as a reason for Cuba’s desire to have the territory returned, it should be noted that President Obama has been trying to close that facility since the start of his first term.

On July 22, White House Press Secretary Josh Earnest confirmed “that the administration is, in fact, in the final stages of drafting a plan to safely and responsibly close the prison at Guantanamo Bay and to present that plan to Congress. That has been something that our national security officials have been working on for quite some time, primarily because it is a priority of the President.  He believes it’s in our clear national security interest for us to close the prison at Guantanamo Bay.” Earnest also said the President has decided to veto a defense spending bill now being negotiated in Congress if it includes provisions that would make it harder to close the prison.[18]

A few more details about the plan to close the detention facility were offered on July 25 by Lisa Monaco, one of Obama’s top national security aides, who said that such a plan was nearing completion. It will call for the U.S. to step up the transfers of 52 detainees cleared for resettlement in other countries and for the transfer to U.S. “Supermax” or military prisons for trials or continued military detention of at least some of the other 64 detainees still at Guantanamo who are deemed too dangerous to release. Efforts will be made to reduce the size of the latter group through “periodic review boards” that have been used to clear others for transfer.[19]

6. Ending U.S. Radio and TV Marti?

Another Cuban request is for the U.S. to stop its radio and TV broadcasts aimed at Cuba (Radio and TV Marti), again mentioned on July 20 by Minister Rodriguez. On July 22 National Security Advisor Rice stated, apparently in response to this request, the U.S. ”will continue to say and do what we think is appropriate to advance our interests in human rights and democracy in Cuba. . . . we’re not going to change just because the Cuban government may wish that we did.”

7. Ending USAID and Other Covert U.S. “Democracy” Programs in Cuba?

Prior posts have discussed recent “discreet” or covert programs in Cuba operated by the U.S. Agency for International Development (USAID) through private contractors purportedly to promote democracy in Cuba and the latter’s objections to same. Rodriguez in his July 20 speech did not specifically mention such programs, but did so indirectly by objecting to the U.S. seeking “obsolete and unjust goals” (i.e., regime change) by “a mere change in the methods.”

These prior posts have expressed this blogger’s objections to such USAID programs. The New York Times has done the same.

8. Cuba Returning U.S. Fugitives?

Although not specifically mentioned last week by Secretary Kerry or Minister Rodriguez, the issue of Cuba’s returning U.S. fugitives remains a top priority for many in Congress and in the U.S. generally. On July 24 Representative Jerry McNerney (Dem., CA) raised the issue with respect to Charles Hill, who is the sole surviving member of a group who hijacked an airliner in 1971; Hill and two others were fleeing charges relating to the killing of a New Mexico state trooper. McNerney, who was on that hijacked airliner, wants Hill to be returned to the U.S.[20]

9. Nominating and Confirming U.S. Ambassador to Cuba?

With respect to congressional threats to not provide funds for the U.S. embassy in Cuba and to not confirm an ambassador to that country, Kerry observed, “it always matters when Congress is sort of stepping in the way of something being able to . . . be fully effected. . . . [W]hy are they going to do that? Are they going to do that because the [old] policy [purportedly] has been so successful? Are they going to do that because they can show so much change that’s taken place in the last 60 years that this is a crazy path? . . . [It] just doesn’t make sense to prevent our diplomats from carrying the message . . . [of human rights and democracy]. To not be able to meet with more people in Cuba to know what is going on is a huge cutoff of opportunity. So I just think it’s cutting off your nose to spite your face and it’s a shame.”

Kerry also said, “Well, it depends on whom, obviously, the next president is, and we don’t know that now. So you can’t bet on it that way. You have to do what you think is right. You have to do what’s appropriate and make the difference. Nobody can guard against every eventuality of the future. But I believe the President has taken an irreversible step. I do not believe a next president, Republican or Democrat, will change it.”

Conclusion

The time has come for all U.S. citizens to support full normalization of our relations with Cuba!

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[1] Center for Democracy in Americas, Flag Poles to Public Opinion Polls—Is Congress (Finally) Getting the Message (July 24, 2015)

[2] The Senate Committee on July 23 voted, 18 to 12, to lift the “decades-long ban on travel to Cuba . . . . to block enforcement of a law prohibiting banks and other U.S. businesses from financing sales of U.S. agricultural exports to Cuba. . . . [and] to lift restrictions on vessels that have shipped goods to Cuba from returning to the U.S. until six months have passed.” A journalist asserted, “The panel’s votes reflect growing sentiment, even among some GOP conservatives, to ease the five-decade-plus Cuba trade embargo and travel restrictions to the island, which have failed to move the Castro regime toward democracy.” (Assoc. Press, GOP-Controlled Senate Panel Votes to Life Cuba Travel Ban, N.Y. Times (July 24, 2015); Davis, Senate Panel Takes Small Step Toward Easing Travel Restrictions with Cuba, N.Y. Times (July 23, 2015); Shabad, GOP-led Senate panel votes to lift travel ban to Cuba, The Hill (July 23, 2015).) This move in the Senate Appropriations Committee is part of a Democratic Senators’ strategy of attacking House riders in appropriation bills that imperil U.S.-Cuba reconciliation. (Shabad, Dems show their hand in budget poker, The Hill (July 26, 2015),)

[3] Menendez, Menendez Statement on Cuban Embassy Opening (July 20, 2015;    Ros-Lehtinen, Opening of Cuban Embassy in Washington, D.C. Harms Our National Security, Says Ros-Lehtinen (July 20, 2015); Diaz-Balart, Embassy in Washington, D.C. Will Represent the Castros, Not the Cuban People (July 20, 2015).

[4] Reuters, Cuban-American Resistance to Diplomatic Thaw Proves Tepid, N.Y.Times (July 21, 2015); Assoc. Press, Poll: Majority of Americans Favor Diplomatic Ties With Cuba, N.Y. Times (July 21, 2015); Reuters Video, Cubans enthusiastic about reopening of U.S. embassy in Havana, N.Y. Times (July 21, 2015).

[5] Klobuchar, News Release: Klobuchar: Opening of Cuban Embassy Marks Next Chapter in Relationship (July 20, 2015).

[6] Engage Cuba, Statement from Engage Cuba on Official Opening of U.S. and Cuba Embassies (July 20, 2015).

[7] Elizalde, John Dinges on Cuba-US relations: ‘I’m optimistic,’ CubaDebate (July 23, 2015)

[8] Gonzalez, Letter to Editor: Effects of Our Cuba Policy, N.Y. Times (July 24, 2015)

[9] Carney, GOPer doubles down on pledge to block Obama on Cuba, The Hill (July 20, 2015).

[10] Dep’t of State, [John Kerry] Interview with Steve Inskeep of National Public Radio (July 20, 2015); Dep’t of State, [John Kerry] Interview with Andrea Mitchell of NBC News (July 20, 2015).

[11] This blogger disagrees with Kerry’s saying Congress had a role in deciding to recognize a foreign government; such a congressional role appears to be unconstitutional in light of a recent U.S. Supreme Court decision that the president has the exclusive constitutional authority to recognize foreign governments.

[12] Speech presented by Army General Raúl Castro Ruz: ‘We will continue the process of transformations in Cuban society at our own pace, CubaDebate (July 15, 2015.

[13] Editorial, Formal Restoration of Diplomatic Ties with Cuba Is Just a Beginning, N.Y. Times (July 20, 2015).  The Washington Post, on the other hand, continued its opposition to normalization with Cuba with an editorial that focused on the human rights problems in Cuba and urging our diplomats to concentrate on those issues. (Editorial, U.S. diplomats in Cuba would do well to focus on human rights, Wash. Post (July 20, 2015).) As Secretary Kerry emphasized in his remarks, the U.S. continues to concentrate on those issues.

[14] Assoc. Press, Cuban Dissidents Feel Sidelined as Focuses on State Ties, N.Y. Times (July 23, 2015).

[15] A prior post suggested that Cuba’s best argument for terminating the lease was the U.S. operation of the prison/detention facility. However, Dr. Michael Strauss, an expert on this lease, asserts that at least in 2002 Cuba offered to facilitate U.S. transportation of detainees to Guantanamo; such conduct should weaken, if not demolish, such an argument for Cuba. (Strauss, Cuba and State Responsibility for Human Rights at Guantanamo Bay, 37 So. Ill. Univ. L.J. 533, 546 (2013).)

[16] White House, Press Briefing by Press Secretary Josh Earnest, 7/22/15.

[17] A prior post discussed these issues about the Guantanamo lease and recommended that the parties submit any unresolved disputes about the lease to the Permanent Court of Arbitration at the Hague in the Netherlands.

[18] Assoc. Press, White House Finishing Up Latest Plan for Closing Guantanamo, N.Y. Times (July 22, 2015) Guantanamo, N.Y. Times (July 22, 2015).

[19] Reuters, Some Guantanamo Inmates Would Go to U.S. Under New Plan: Obama Aide, N.Y. Times (July 26, 2015)

[20] Hattem, House Dem demands fugitives in Cuba be returned to the U.S., The Hill (July 24, 2015). A prior post explored the issues regarding extradition under a U.S.-Cuba treaty on the subject and recommended submitting any unresolved disputes about extradition to the Permanent Court of Arbitration at the Hague.