European Union To Fund 40 Million Euro Projects in Cuba

On May 15, the first  First Joint European Union (EU)-Cuba Council meeting  will take place in Brussels, Belgium to start the process for the EU providing 40 million Euros for projects in Cuba.[1]

The parties will sign their first Financial Agreement to establish the framework for the implementation of a bilateral program in the area of renewable energies for which the EU will contribute up to €18 million (U.S. $ 21.5 million). This will pave the way for a second Financial Agreement later in the year for a program in support of renewable energy and sustainable food security in Cuba, with an EU contribution of €19.65 million (U.S.$ 23.5 million).

These financial accords are the result of the  two parties’ Political Dialogue and Cooperation Agreement (PDCA), most parts of which have been provisionally applied since last November 1. The PDCA defines general principles and objectives for the relationship between the EU and Cuba and provides the following framework for accompanying the reform process in Cuba:

  • “Political dialogue: addressing issues, such as human rights, small arms and disarmament, non-proliferation of weapons of mass destruction, migration, drugs, fight against terrorism, sustainable development, etc.;
  • Cooperation and sector policy dialogue: including areas, such as governance, civil society, human rights, social and economic development, environment as well as regional cooperation;
  • Trade and trade cooperation: dealing with principles of international trade and covering cooperation on customs, trade facilitation, technical norms and standards, sustainable trade and investment.”

According to the EU, three high-level dialogues already have been held to exchange views on basic principles of human rights, to identify areas to cooperate or share best practices. The two parties also will launch dialogues focused on sustainable development, non-proliferation, arms control, and unilateral measures. The last will include the U.S. embargo on the Island.

The PDCA also  provides for the possibility of suspension in the event of a serious violation of human rights commitments.

Ramón Jáuregui, president of the Euro-Latin American Assembly (a transnational non-governmental body of 150 legislators from Europe and Latin America to improve their governments’ relations), said, “Cuba needs an economic opening, it needs cooperation, it needs energy, it needs investments, it needs to improve its GDP to improve the quality of life of Cubans. [The EU] “can be a loyal partner” of Havana with the agreement and “through this opening and this collaboration, [Cuba] will have no choice but to take successive democratic steps.”

Last month Sweden’s Minister of International Cooperation Isabella Lövin, told her Parliament that Cuba’s civil society and democratic movement have a legitimate role in the discussions on the implementation of the Association Agreement and Political Dialogue. [2]

The 28 EU countries are the main foreign investor in Cuba (mainly in the sectors of tourism or construction), according to the European Commission, which in 2017 had 471 million euros of imports of Cuban goods in 2017 (mostly agricultural products, beverages, tobacco and mineral fuels) 2,094 million euros of EU exports to the island.

Conclusion

The previously mentioned EU-Cuba conference in Belgium will take place the day before Cuba’s Universal Periodic Review in Geneva, Switzerland, and at the latter session Cuba undoubtedly will raise its agreement with the EU for dialogues about human rights.

This EU-Cuba agreement on dialogue about human rights is similar to the human rights dialogues that were conducted by Cuba and the U.S. during the Obama Administration and that apparently are now suspended in the Trump Administration.[3]

It also is interesting that no report about the conference in Belgium was found in the major U.S. newspapers that cover foreign affairs (New York Times, Washington Post and the Wall Street Journal) or in the major news organizations (Reuters and the Associated Press) for U.S. news organizations.

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[1]  EU External Action,  EU-Cuba relations, factsheet (May 7, 2018); Nearly 40 million euros for Havana, the first realization of the agreement with the European Union, Diario de Cuba (May 14, 2018); European Union declares to be ready for the First Joint European Union Council-Cuba, Granma (May 13, 2018); Cuban Foreign Minister will begin this Monday tour of Europe, Cubadebate (May 13, 2018). This blog has published posts about Eu-Cuba relations and agreements that are found in the “Cuba and Other Countries” section of List of Posts to dwkcommentaties–Topical: CUBA.

[2] Sweden admits that the implementation of the EU-Havana agreement must include the Cuban democratic movement, Diario de Cuba (April 27, 2018).

[3] The contrasting U.S. approaches to Cuba on human rights are covered in many posts in the following sections of List of Posts to dwkcommentaries–Topical: CUBA: “U.S. (Obama) & Cuba (Normalization)– 2014 and 2015 and 2016 and 2017” and “U.S. (Trump) & Cuba, 2016-2017 and 2018.”

Argument Between Wall Street Journal and Cuba’s Ambassador to U.S.

The Wall Street Journal and the Cuban Ambassador to the U.S. are engaged in an argument that started with the newspaper’s April 22 editorial.

The Editorial[1]

 “Eighty-six-year-old Raúl Castro grabbed headlines last week when he ceded the title of president to 58-year-old civilian Miguel Diáz-Canel. Too bad this change at the top is nominal when it comes to freedom for the Cuban people.”

“Mr. Diáz-Canel is . . .[not] an independent thinker. Cubans have every reason to believe him when he says, as he did in his acceptance speech, that he is committed to preserving a police state. If Mr. Diáz-Canel wants to keep his job and privileges, human rights won’t be on his agenda.”

“Raúl still leads the Communist Party and has kept the two most powerful regime positions under his control. Col. Alejandro Castro Espín, his son, runs counterintelligence for the Interior Ministry that controls the secret police. Gen. Luis Alberto Rodríguez López-Callejas, Raúl’s former son-in-law, is top dog at GAESA, the military’s holding company that owns the tourism industry, the shipping company, the airline, construction companies, auto imports and sales, the real-estate business, the banks and control of container traffic at the Port of Mariel. Ramiro Valdés, a regime enforcer, still sits on the Council of State, Cuba’s highest government body.”

. . . .

“Now Havana’s crime family has again run out of other peoples’ money. Its largest sources of hard currency are the doctors and nurses who live in poverty while Cuba “rents” them to countries around the world. Yet even this multibillion-dollar human trafficking isn’t enough to support the broken Cuban economy.”

“President Trump has reined in some of Barack Obama’s executive orders that made it easier for Americans to travel to Cuba. But the regime’s bigger problem is that investors who kick the tires on the Castro jalopy increasingly walk away. There are plenty of opportunities in emerging markets these days, and the smart money doesn’t want gangsters for partners.”

“Promises of greater economic freedom for Cubans have never materialized. Small businesses can operate as long as they are subsistence operations. But they can’t hire and the regime has again cracked down on permitting lest it lose control. Cuba’s poverty suggests something has to change. But liberalization is not in the interests of the Castro family or the military. And they’re still in charge.”

The Cuban Ambassador’s Response[2]

On May 6 Cuban Ambassador José Ramón Cabañas Rodríguez responded to this editorial with the following letter to the Journal.

“The U.S. corporate press has always been predictable in its articles on Cuba and even more so when it comes to its editorials. Newspapers such as yours were against Cubans being free from Spanish power in the 19th century. Later on, they commended local corrupt politicians who supported the invasion—first militarily and then economically by American companies during the first half of the 20th century. Finally, those newspapers relentlessly demonized the Cuban Revolution since 1959.”

“However, I was caught off guard by the sordidness of the language used by your editorial board when referring to my country. It is the typical exercise of those who are left without arguments. There is still a financial, economic and commercial embargo imposed on Cuba intended to starve our population into submission. However, the information blockade has decreased. Americans massively travel to Cuba and 75% of them support a better relationship with our country.”

“Your renewed efforts to promote the business of the ‘dissidence’ in Cuba will not have the slightest success. History is wise and has forgotten (and will forget) the names of the annexationists of Cuban origins, but any educated human being who inhabits the earth today will be able to tell you about Carlos Manuel de Céspedes, José Martí, Antonio Maceo, Julio Antonio Mella, Ernesto Guevara and Fidel Castro; those are the names of the pro-independence figures.”

“To maintain a part of the audience you still have, before criticizing Cuba again, or any other Latin American or Caribbean country for that matter, please start by looking at yourselves in the mirror.”

Conclusion

Although I believe that U.S. policies regarding Cuba are heading the wrong direction in the Trump Administration and deplore its abandonment of many (but not all) aspects of  the Obama Administration’s opening of relations with Cuba and although I have met and respect the Cuban Ambassador, this exchange or argument is unsatisfying.[3]

The Journal, given its general support of free markets and capitalism, should have (a) encouraged the Cuban government to engage in further efforts to promote the expansion of its private sector of bed-and-breakfasts, restaurants and other ventures and (b) criticized some of the Trump Administration’s policies that discourage such Cuban expansion of free enterprise and markets.

Such efforts enable Cubans to increase their financial circumstances and offer better-paying jobs to other Cubans and thereby provide the Cuban economy with desperately needed boosts. Cuba’s efforts last year to restrict such expansion were misguided out of fears of changes.

This would have forced the Cuban Ambassador into the difficult position of trying to justify the regime’s clamp-down last year of expansion of the private sector.  The Ambassador in this hypothetical, however, could have argued that the Cuban Government needed to be cautious on these issues because of illegitimate U.S. efforts, overtly and covertly over many years, to promote regime change in Cuba.

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[1] Editorial, Cuba Gets a Castro Convertible, W.S.J. (April 22, 2018).

[2] Letter to Editor, Cabañas to W.S. J., W.S.J. (May 6, 2018).

[3] See List of Posts to dwkcommentaries—Topical: CUBA.

 

U.S. and Cuba Continue To Confer Over Common Concerns 

Despite various Trump Administration’s hostile actions regarding Cuba, the two countries continue to confer over common concerns. Three such conferences occurred this week in Washington, D.C..[1]

Conference on Money Laundering [2]

On February 12, 2018, the two countries met in Washington, D.C. to discuss combatting the crime of money laundering. This exchange, which falls within the context of the law enforcement dialogue between both countries, provided both parties with the opportunity to discuss this crime at a regional level, the main experiences gained in combatting this crime and the next steps that would be taken to advance the bilateral collaboration on this matter. 

The Cuban representatives underscored the necessity to increase the two countries’  cooperation and both parties shared the view that determined action is required against these acts and against those who commit them and the consensus was that impunity cannot be permitted.

The Cuban delegation also stated that for the comprehensive analysis of these issues, Cuba favors the exchange in different forums, mainly of the U.N. system. In addition, the Cuban government actively collaborates with the Financial Action Task Force of Latin America (GAFILAT), a regional inter-governmental organization to prevent and combat money laundering, terrorist financing and the funding of the proliferation of mass-destruction weapons. In its Mutual Evaluation Reports, GAFILAT acknowledges that the general risk for money laundering and terrorist financing in Cuba is low, highlights the inter-institutional coordination and cooperation existing at all levels in the country to combat these crimes and the updated legal framework Cuba has for this purpose.

The Cuban delegation was composed of representatives of the Ministry of the Interior, Banco Central de Cuba, the Office of the Attorney General of the Republic and the Ministry of Foreign Affairs. The U.S. delegation was composed of officials of the Departments of Homeland Security, Justice, State, Health and Human Services and Treasury.

This was the second such meeting and took place in a respectful and professional ambience. Both parties agreed to continue with these technical exchanges in the future and to coordinate actions that may contribute to the effective combat against this crime.

Conference on Human Trafficking [3]

On February 13, 2018, at the U.S. State Department the parties met to give updates on the advances made, experiences gained and the challenges faced in the prevention of, and combat against, trafficking in persons and protection of victims.

Cuba emphasized its ratification of the zero-tolerance national policy against human trafficking, adoption of a National Plan of Action for 2017-2020 to Prevent and Combat Trafficking in Persons and to Protect the Victims thereof, the establishment of  a Commission to implement the multidisciplinary actions contained in said Plan, and the results of the visit to Cuba by Ms. María Grazia Giammarinaro, U.N. Special Rapporteur on trafficking in persons, especially in women and children.

Cuba also mentioned its establishment of a Family Protection Division and the operation of a Unique Telephone Line of the Attorney General’s Office; its specialized training seminars for prosecutors, judges and law enforcement officers, the workshops and training courses for educators, and the celebration of the World Day against Trafficking in Persons. In addition, Cuba stresses the preventive nature of its National Health System and the important role played by the Cuban medical doctors in the early detection and attention of potential victims of human trafficking, both in Cuba and in other countries where our nation provides medical cooperation.

In 2016, 21 cases were prosecuted in Cuba for crimes with typical features of trafficking in persons, through the typified crimes of “Corruption of Minors” and “Procurement and Trafficking in Persons”. In this same period, Cuba maintained international collaboration for the investigation and solution of cases transcending the national territory.

Cuba also asserted that the low incidence of trafficking in persons in Cuba is associated with its social and public safety achievements, equal opportunities and policies and programs aimed at empowering women, providing free access to health services, education, culture and sports, which reduces the country’s vulnerability and strengthens its capacity to increase international cooperation in this field, as a State Party to the legal instruments signed on this and other related matters.

This was the fifth such bilateral meeting on this subject since December 2014, the last occurring in January 2017, and both parties ratified the usefulness of the exchange, which took place in a professional and respectful ambiance, and agreed to continue holding these exchanges in the future.

Conference on Technical Issues About Human Trafficking [4]

On February 14, the U.S. Department of Homeland Security hosted a technical exchange on trafficking in persons, one of the eight working-level exchanges under the U.S.-Cuba Law Enforcement Dialogue. Participants discussed best practices on investigations and prosecutions, human trafficking trends in the region, and potential areas of coordination to fight the scourge of trafficking, which threatens national security and public health and safety in both countries.

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[1] Other posts to dwkcommentaries have discussed other U.S.-Cuba bilateral meetings in the Trump Administration: U.S. and Cuba Hold Discussions About Human Trafficking and Migration Fraud (Dec. 10, 2017); U.S. and Cuba Hold Bilateral Migration Talks (Dec. 12, 2017); Cuba and U.S. Continue To Hold Bilateral Meetings on Various Issues (Jan. 18, 2018).

[2] Cuba Foreign Ministry, Cuba and the United States hold exchange on the cooperation to prevent and combat money laundry (Feb. 13, 2018). 

[3] Cuba Foreign Ministry, Delegations from Cuba and the United States Hold Exchange on Trafficking in Persons (Feb. 13, 2018); U.S. State Dep’t, United States and Cuba Meet to Combat Trafficking in Persons (Feb.14, 2018).

[4]  U.S. State Dep’t, United States and Cuba Meet to Combat Trafficking in Persons (Feb.14, 2018); Cuba Foreign Ministry, Cuba and the USA carry out technical exchanges on trafficking in persons and child sexual abuse (Feb. 14, 2018).

U.S. and Cuba Hold Biannual Migration Talks 

Despite the significant recent cooling of relations, the U.S. and Cuba held their biannual discussion of migration issues, this time at the State Department in Washington, D.C. on December 11.

Migration Discussions[1]

According to the Department, the two countries “discussed the significant reduction in irregular migration from Cuba to the [U.S.] since the implementation of the January 2017 Joint Statement [during the last days of the Obama Administration [2]]. Apprehensions of Cuban migrants at U.S. ports of entry decreased by 64 percent from fiscal year 2016 to 2017, and maritime interdictions of Cuban migrants decreased by 71 percent. The [U.S.] confirmed it met its annual commitment in fiscal year 2017 to facilitate legal migration by issuing a minimum of 20,000 documents under the Migration Accords to Cubans to immigrate to the [U.S.] The U.S. delegation also raised the need for increased Cuban cooperation in the return of Cubans with final orders of removal from the [U.S.]”

The Department added, “A strong migration policy is vital to the [U.S.] national security. The Migration Talks, which began in 1995, provide a forum for the [U.S.] and Cuba to review and coordinate efforts to ensure safe, legal, and orderly migration between Cuba and the [U.S.]. The talks were last held in April 2017 [in the Trump Administration].”

The Cuban statement provided greater details on the substance of these discussions. It said “Cuba urged the [U.S.] to fulfill its obligation to issue no less than 20,000 travel documents annually to Cuban citizens to emigrate to that country. “Cuba also questioned the “validity of the U.S. Cuban Adjustment Act, which continues to be a stimulus to irregular migration and whose repeal will be essential to achieve normal migratory relations between the two countries.”[3] Another impediment to cooperation on migration, said Cuba, was the U.S. cancellation of “trips of official delegations from the [U.S.] to Cuba, which has led to the postponement of previously scheduled exchanges of mutual interest, which , if maintained,  could deepen the effects on exchanges in this and other areas.”

The Cuban statement also said that Cuba  had “expressed its deepest concern about the negative consequences that [U.S.] unilateral, unfounded and politically motivated decisions [in September and October 2017] have on immigration relations between both countries.”[4]

Furthermore, Cuba “warned . . .about the negative impact of the suspension of the granting of visas in the [U.S.] Consulate in Havana [due to the U.S. reduced staffing], which, by paralyzing the procedures of Cuban citizens to visit or emigrate to that country, seriously hampers family relations and exchanges of all kinds between both peoples.” Cuba reiterated its objection to the U.S.”arbitrary expulsion of a significant group of officials from [Cuba’s] Embassy in Washington, which has significantly affected the functioning of the diplomatic mission, . . . [especially] the services it provides to Cubans residing in the[U.S.]. . . . and] to American citizens who are interested in traveling to our country.”[5]

On a more positive note, Cuba observed that both side recognized “the positive impact of the Joint Declaration signed on January 12, 2017 [during the last days of the Obama Administration] and, specifically, the elimination of the “dry feet-wet feet” policy and the “Parole Program for Cuban Medical Professionals” in the decrease of irregular emigration from Cuba to the [U.S.]”[6]

In addition, both countries” agreed on the usefulness of the exchange between Coast Guard Troops and the Coast Guard Service held in July [2017]and the technical meeting on human trafficking and immigration fraud carried out in September [2017] which will continue on December 12. Cuba reaffirmed its willingness to give continuity to the rounds of conversations on migration issues.”

Conclusion

As an advocate for normalization of U.S.-Cuba relations, it is good to know that the two countries still manage to hold respectful meetings to discuss issues of mutual concern even though they do not agree on all such issues and even though this blog disapproves of the Trump Administration’s recent changes to U.S. regulations on travel to Cuba and trade with Cuba.

This blog was also pleased to read the U.S. implicit positive endorsement of the Obama Administration’s January 12, 2017, Joint Declaration with Cuba about the latter’s migration to the U.S.

On the other hand, this blog disagrees with the U.S. reduction of the staffing of its Embassy in Havana and the expulsion of Cuban diplomats from its Embassy in Washington and supports Cuba’s complaint about the negative consequences of those decisions.

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[1] U.S. State Dep’t, United States and Cuba Hold Biannual Migration Talks in Washington, D.C. (Dec. 11, 2017); Washington’s unilateral actions hamper relations with Cuba, Granma (Dec. 11, 2017)

[2] See these posts to dwkcommentaries.com: U.S. Ends Special Immigration Benefit for Cubans and Meets with Cubans To Discuss Claims (Jan. 13, 2017); Additional Reactions to End of U.S. Immigration Benefits to Cubans (Jan. 14, 2017); Reuters, Cuba Tells U.S. Suspension of Visas Is Hurting Families, N.Y. Times (Dec. 12, 2017).

[3] Cuban Adjustment Act, Wikipedia.

[4]  See these posts to dwkcommentaries.com: A New Travel Warning for Americans Traveling to Cuba (Sept. 19, 2017); Medical “Incidents” Affecting U.S. Diplomats in Cuba Prompt U.S. To Reduce Staff at Havana Embassy and Urge Americans Not to Travel to Cuba (Sept. 30, 2017); U.S. Orders Cuba To Remove 15 Cuban Diplomats (Oct. 4, 2017); U.S. Embassy in Cuba Issues “Hotel Restrictions” Security Message (Oct. 7, 2017).

[5] See n.4.

[6] See these posts to dwkcommentaries.com: U.S. Ends Special Immigration Benefit for Cubans and Meets with Cubans To Discuss Claims (Jan. 13, 2017); Additional Reactions to End of U.S. Immigration Benefits to Cubans (Jan. 14, 2017).

 

Is Cuba-North Korea Cooperation Good or Bad for U.S.? 

On November 22-24 North Korea’s Foreign Minister Ri Yong Ho was in Havana to meet with Cuba’s Foreign Minister Bruno Rodriguez and President Raúl Castro. Was this a positive or negative development for  the U.S., which has simultaneous strained relationships with both countries?[1]

Background

Since 1960, soon after the Cuban Revolution assumed control of the island’s government, Cuba and North Korea have had close diplomatic relations. It started with a 1960 visit to North Korea by Che Guevara, who praised the North Korean regime as a model for Cuba to follow.

In 1986 Fidel Castro visited North Korea and met with the country’s founder, Kim Il-sung, and his son and successor, Kim Jong-il (the grandfather and father, respectively, of the current North Korean leader).

In July 2013, a North Korea-flagged vessel was seized by Panamanian authorities carrying suspected missile-system components hidden under 10,000 tons of sugar bags upon its return from Cuba. Cuba claimed the weapons were going to North Korea for repairs and were to be sent back. However, the next year a United Nations panel of experts concluded that the shipment had violated sanctions placed on North Korea, although Cuban entities were not sanctioned in the aftermath despite protests from the U.S.

In 2015, Cuba’s First Vice President and foreseeable successor to Raúl Castro, Miguel Díaz-Canel , was received by Kim Jong-un in the North Korean capital.

In December 2016, a North Korean delegation to the funeral of Cuban leader Fidel Castro emphasized that the two nations should develop their relations “in all spheres” — a comment that was echoed by Raúl Castro, according to state media reports at the time.

This year the Kim regime has been strengthening its ties with Cuba with a view to breaking its diplomatic isolation, before the tightening of sanctions imposed by the international community. In January, Cuban Vice President  Salvador Valdés Mesa  received the number three of the North Korean regime, Choe Ryong-hae. In May the North Korean trade union leader Ju Yong-gil visited  Havana as part of a meeting of the World Federation of Trade Unions and reportedly returned with a message of solidarity from President Raúl Castro.

The Ho-Rodriguez Meeting

Ho’s first meeting in Cuba was with Foreign Minister Rodriguez and below is a photograph of the two men at that meeting. 

Afterwards Cuba’s Foreign Ministry stated that the two officials  had “reviewed the satisfactory status and positive evolution of bilateral relations, which [are] based on the traditional bonds of friendship established by the historical leaders Fidel Castro Ruz and Kim Il Sung and the links that exist between both peoples, parties and governments.” They also asserted their “respect for peoples’ sovereignty, independence and free determination, territorial integrity, the abstention or threat of the use of force, the peaceful settlement of disputes and non-interference in the internal affairs of States.”

They then “strongly rejected the unilateral and arbitrary lists and designations established by the US government which serve as a basis for the implementation of coercive measures which are contrary to international law.” In addition, they “expressed their concern over the escalation of tensions and the increased military activity in the [Korean Peninsula].”

The Ho-Castro Meeting

After the two officials’ meeting, the official note of the meeting released on Cuban official television stated, “In the fraternal meeting both parties noted the historic bonds of friendship that exist between the two nations and discussed international issues of common interest.”

Implications for the U.S.

On November 23 Canadian Prime Minister Justin Trudeau raised the possibility that the North Korea-Cuba relationship was a positive development for the U.S. and the world. He said that last year he had discussed with Castro the possibility of working together to defuse global tensions with North Korea. “Can we pass along messages through surprising conduits?” Implicitly answering “yes” to his rhetorical question, Trudeau said. “These are the kinds of things where Canada can, I think, play a role that the United States has chosen not to play, this past year.”

Canada had an interest in seeking such solutions, not just because of regional security but also because the flight path of possible North Korean missiles would pass over its territory, Trudeau said.

An unnamed Asian diplomat had a similar thought: “We often ask the Cubans if they can talk to [the U.S. about North Korea].”

A more negative assessment was offered by an anonymous U.S. State Department official who said that the U.S. had made clear it wanted a peaceful resolution to the North Korean nuclear issue, but North Korea’s “belligerent and provocative behavior demonstrates it has no interest in working toward a peaceful solution.” Also skeptical was Anthony Ruggiero, a senior fellow at the Foundation for Defense of Democracies and a former U.S. Treasury Department official, who said,  “A key element of the Trump administration’s sanctions effort is isolating North Korea. The U.S. should warn Cuba about the dangers of a relationship with North Korea.”

Conclusion

Although this blog desperately hopes for a de-escalation of tensions between the U.S. and North Korea and the avoidance of a nuclear war, I doubt that Cuba or Canada via Cuba can make a significant contribution to that objective.

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[1] Reuters, Castro Meets North Korean Minister Amid Hope Cuba Can Defuse Tensions, N.Y. Times (Nov. 24, 2017); The North Korean chancellor brings to Raúl Castro a ‘verbal message’ from Kim Jong-un, Diario de Cuba (Nov. 24, 2017); MacDonald, North Korea relations could be cooled using Cuba, Trudeau says, Global News (Nov. 23, 2017); Reuters, Cuba, North Korea Reject ‘Unilateral and Arbitrary U.S. Demands, N.Y. Times (Nov. 23, 2017); Cuba Foreign Ministry, The Cuban Foreign Minister met with his counterpart from the Democratic People’s Republic of Korea (Nov. 22, 2017); Gomez, Bruno Rodriguez receives Foreign Minister of the Democratic People’s Republic of Korea, Granma (Nov. 22, 2017); Reuters, North Korean Foreign Minister Heads to Cuba, N.Y. Times (Nov. 20, 2017); Taylor, Amid growing isolation, North Korea falls back on close ties with Cuba, Wash. Post (Nov. 17, 2017).

 

 

Cuba’s Many Problems Prompt Speculation Galore  

Cuba’s facing many problems: the collapse of its ally and benefactor, Venezuela; recovering from the damage caused by Hurricane Irma; increased hostility from the Trump Administration; Cuba’s government’s fear of an expanding private sector of the economy; declining visitors from the U.S.; a declining national economy; the imminent political transition next February and the regime’s blocking 175 independent candidates from the upcoming election of municipal councils.

A Miami Herald article gathers experts’ speculation over whether Raúl Castro will in fact relinquish the presidency next February; whether the presumed new president, Miguel Diaz-Canel, will be capable of handling all of these problems; whether hardliners in the regime have been or will be empowered. Read it to get the full flavor of these and other speculations.[1]

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[1] Whitefield & Gámez, Raúl Castro: Will he stay in power in Cuba or retire? Miami Herald (Nov. 21, 2017).

Trump’s New Regulations Adversely Affect Cuban Entrepreneurs

The new travel regulations and anti-Cuba rhetoric of President Trump already are hurting ordinary Cubans, especially those who have become entrepreneurs and who employ 600,000 of the island’s 11 million people.  The “self-employed” sector, a euphemism used by the Cuban government to avoid the words “private” or “entrepreneur,” already is encumbered by Cuban regulations that leave little room for development.[1]

Now an “association of Cuban businesswomen has asked to meet with Senator Marco Rubio (Rep., FL), a Cuban-American who has never been to the island and who is believed to be a major influencer on the Trump Administration’s Cuba policies. These women want to explain ” the impact on the country’s nascent private sector of rolling back a detente in U.S. relations.” They say, “The current situation has us very worried and we would like to share our personal histories and perspective from Cuba.”

One of these women, Niuris Higueras, the owner of the Atelier restaurant in Havana, said her  “business is down 60 percent from a year ago.” Another woman, Julia de la Rosa, who runs a 10-room bed and breakfast, said rentals were down 20 percent in October and she expected a further decline as new U.S. regulations on individual travel kick in this month.

The Trump Administration’s evident hostility toward Cuba also has caused U.S. businesses to reduce their interest in trying to create and build business in Cuba. At this year’s Cuba trade fair only 13 U.S. companies had booths compared with 33 last year. Another cause of this reduction is growing awareness of the difficulty of doing business in Cuba.[2]

Former U.S. Secretary of Commerce Carlos Gutierrez, the Cuban-born head of the U.S.-Cuba Business Council, said, “This is a huge step backwards. We had made so much progress.”

U.S. airlines with licenses for flights to Cuba also are seeing the reduction in U.S. demand for visiting Cuba. As a result, five airlines have cancelled all flights to the island while others have reduced the number of their flights.[3]

A caveat to this negative reaction is the opinion of some that the new regulations on business dealings “produce brighter lines that may make it easier for companies to identify who exactly they can do business with when trying to operate on the island.”

One who expressed this view is Peter Harrell, an adjunct senior fellow at the Center for a New American Security who previously served as a deputy assistant secretary for counter-threat finance and sanctions in the U.S. State Department, said that the new regulations “made trade easier with the country’s private sector.” A significant point in this regard was the State Department’s FAQ document stating that “entities not on its restricted list, even if they’re subsidiaries of those on the list, are [not] restricted until they themselves appear on the blacklist.”[4]

Another caveat is “the new regulations limiting “disruption to pre-existing commercial activities, ensuring that U.S. companies can continue to do business with Cuba’s nascent private sector.” Examples of such preexisting deals are Deere & Co. and Caterpillar Inc.’s arrangements for distribution of their products on the island.[5]

Myron Brilliant, the head of international affairs at the U.S. chamber of Commerce, urged the administration “to continue to keep business in mind and avoid further steps to restrict the economic relationship between the U.S. and Cuba.”

Nevertheless, the U.S. regime of Cuba sanctions presents risks to U.S. companies. The latest example is the November 17 announcement by the U.S. Treasury of an OFAC settlement with American Express Co. for $204,000 for its 50%-owned Belgian credit-card issuer’s corporate customers’ 1,818 transactions in Cuba between 2009 and 2014.[6]

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[1] Reuters, Cuban Businesswomen Seek Rubio Meeting as U.S. Policies Bite, N.Y. Times (Nov. 17, 2017). The above topics and others are the subjects of earlier posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Reuters, Blooming U.S. Business Interest in Cuba Wilts Under Trump, N.Y. Times (Nov. 10, 2017).

[3] Reuters, Alaska Airline Discontinues Los Angeles-Havana Daily Flight, N.Y. Times (Nov. 14, 2017); Assoc. Press, Alaska Airlines to Halt Flights to Cuba, N.Y. Times (Nov. 14, 2017).

[4] Rubenfeld, New U.S. Cuba Regulations May Make Compliance There Easier, W.S.J. (Nov. 9, 2017).

[5] Schwartz & Radnofsky, New Trump Rules Pare Back Obama’s Opening to Cuba, W.S.J. (Nov. 8, 2017).

[6] Rubenfeld, American Express Unit Fined Over Cuba Sanctions Violations, W.S>J. (Nov. 17, 2017).