On September 12 the United States and Cuba held its Inaugural Economic Dialogue in Washington, D.C.[1]
The goal of the Dialogue is promoting long-term bilateral engagement on a wide range of topics as part of the ongoing normalization process. The delegations discussed trade and investment, labor and employment, renewable energy and energy efficiency, small business, intellectual property rights, economic policy, regulatory and banking matters, and telecommunications and internet access. Both parties agreed to continue the dialogue and, under its auspices, convene working groups to continue technical discussions in the coming months.
The U.S. delegation was co-chaired by Assistant Secretary of State for Economic and Business Affairs Charles Rivkin and U.S. Department of Commerce Deputy Assistant Secretary for the Bureau of Industry and Security Matthew Borman. The Cuban delegation was headed by Ministry of Foreign Trade and Foreign Investment Vice Minister of Commercial Policy Ileana Nunez Mordoche.
In the meantime, a U.S. newspaper, InCubaToday, reports that the Cuban military’s Business Administration Group, GAESA, “has grown dramatically since the declaration of detente between the U.S. and Cuba on Dec. 17, 2014.”[2] GAESA operates through at least the following branches or subsidiaries:
Its tourism office, Gaviota, “has 62 hotels with 26,752 rooms across Cuba, pulling in some $700 million a year from more than 40 percent of the tourists who visit Cuba” and “is in the midst of a hotel building spree that outpaces projects under control of nominally civilian agencies like the Ministry of Tourism.”
Its Cimex has “retail stores, auto-rental businesses and even a recording studio among its holdings.”
Its “retail chain, TRD, has hundreds of shops across Cuba that sell everything from soap to home electronics at prices often several times those in nearby countries.”
“The military-run Mariel port west of Havana has seen double-digit growth fueled largely by demand in the tourism sector.”
“The armed forces this year took over the bank that does business with foreign companies, assuming control of most of Cuba’s day-to-day international financial transactions.”
According to the InCubaToday article, the Cuban “armed forces are widely seen in Cuba as efficient, fast-moving and relatively unscathed by the low-level payoffs and pilferage that plague so much of the government.” A similar observation was offered by Richard Feinberg of the Brookings Institution: “GAESA is wisely investing in the more international — and more lucrative — segments of the Cuban economy. This gives the military technocrats a strong stake in a more outwardly oriented and internationally competitive Cuba deeply integrated into global markets.”
On February 18, 2016, the Cuba Consortium hosted its first annual Washington Conference: “Prospects for United-States Cuba Normalization, Commerce and Investment.” [1]
The speakers at the Conference included Penny Pritzker, U.S. Secretary of Commerce; Rodrigo Malmierca, Cuban Minister of Foreign Trade and Investment; Tom Vilsack, U.S. Secretary of Agriculture; Benjamin Rhodes, Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting; and Andrea Gacki, Assistant Director, Compliance and Enforcement, Office of Foreign Asset Control, U.S. Department of Treasury. Here is a summary of their remarks.
Secretary Pritzker
Secretary Pritzker
In her speech, Pritzker said that she and the U.S. delegation on their visit to Cuba last October learned more about how the Cuban economy works, including the rules and regulations that govern the import, export, and distribution of goods across the island. This information helped to guide the most recent (January 2016) U.S. regulatory changes regarding Cuba.
Those new U.S. regulations created a general policy of approval of exports for purposes such as: disaster preparedness and relief, education, agricultural production, artistic endeavors, food processing, public transportation, Cuban civil society, enhanced communications on the island, and civil aviation safety.
Those new regulations also provided that the Commerce Department’s Bureau of Industry and Security will now review on a case-by-case basis proposed exports from U.S. companies to Cuban state-owned enterprises and government entities to determine if the export will meet the needs of the Cuban people. We had learned in our visit that in Cuba – as in many of our other trading partners around the world – it is necessary to work with state-owned enterprises in order to support the local private sector.
The corresponding new regulations from the U.S. Department of the Treasury permit financing for most authorized exports and travel authorizations.
In sum, whether environmental goods, telecommunications equipment, or products that private sector entrepreneurs need, the U.S. government’s regulatory changes permit a wide variety of trade and commercial activities.
However, if the U.S. is to truly maximize the benefits of our regulatory changes for the Cuban people, the Cuban government needs to make it easier for Cuban citizens to start their own businesses, purchase goods through wholesale markets, engage in external trade, secure credit, and access information online. These steps include making Cuban economic and business regulations publicly available; providing clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorizing Cuban imports of U.S. products that are now allowed by U.S. regulations.
The bilateral civil aviation agreement signed on February 16 is an example of what we have accomplished together.
“The U.S. embargo continues to be a roadblock to increasing engagement between our countries. As President Obama reaffirmed during his State of the Union address, our Administration strongly supports lifting the embargo, and we will continue to call on Congress to repeal it immediately.”
Minister Malmierca
Minister Malmierca
Malmierca asserted that President Obama has the legal authority to adopt additional regulations that would permit Cuba to use the U.S. Dollar in international financial transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications.
The U.S. regulatory changes to date are positive, but they are not enough. For example, he said, since the December 2014 joint U.S.-Cuba announcement of normalization, six financial institutions have been fined nearly two billion dollars for trading with Cuba. These fines and the ban on the use of the U.S. Dollar have had serious negative effects on Cuba.
The previous day (February 17), Malmierca led a Cuban delegation at a meeting with Secretary Pritzker and other officials of the U.S. Department of Commerce. [2] On that occasion he made many of the same points just mentioned. He also pointed out that Cuba does not apply any coercive measures against U.S. companies or businesspeople and, in fact, welcomes them to do business on the island.
At that prior meeting in response to a question by Secretary Pritzker, Malmierca said that the next meeting of the Congress of the Communist Party of Cuba will seek to define the priority economic sectors for long-term development. “The most complex issue is that Cuba wants all these changes to be implemented without affecting the population; we do not want to apply shock measures or measures that may have a negative effect.”
This upcoming Congress will address the role of the market in the Cuban economy and the role of foreign investment in its economic development. This will seek to further consolidate changes adopted by Cuba before December 17, 2014, which are irreversible. “All the measures we are adopting, and which were sovereignly chosen long before December 17, 2014, . . . will also contribute to making the decisions we are making together more feasible,” he concluded.
Secretary Vilsack
Secretary Vilsack
Secretary Vilsack also criticized the U.S. embargo (blockade), noting that it restricts opportunities for trade between Cuba and the U.S. One area of such negative impact was the U.S. helping Cuba’s organic and urban farming practices.
The U.S. Agriculture Department is looking to identify business opportunities through a fund to which several U.S. agricultural companies voluntarily contribute. This fund, however, cannot use federal resources to explore business opportunities with the island, as is common practice, thus obstructing U.S. companies’ access to the Cuban market.
Although a U.S. law in 2000 authorized sales of agricultural products to Cuba, it required Cuba to pay in cash in advance, which has had a severe negative impact on such U.S. exports.
Associate Director Gacki
Associate Director Gacki
Gacki was unable to identify the specific law which prohibits Cuba’s use of the U.S. Dollar in international transactions, but said the Treasury Department currently was investigating whether there were other executive measures President Obama could adopt to reduce the adverse impacts on Cuba of restrictions on its use of the U.S. Dollar.
Assistant to the President Rhodes
Assistant to President Rhodes
Rhodes confirmed that Obama still has broad executive powers to make further and more substantial modifications to the U.S. embargo (blockade) policy.
Rhodes said that while the embargo policy may have had relevance in the past, the island is changing as are opinions of some Cuban-Americans. In addition, the increased numbers of Americans visiting Cuba are seeing why the embargo should be ended.
The Obama Administration, he added, is reviewing other potential regulatory changes that could be made within the existing legal framework.Thus, he believed it is possible to do more before the end of this administration to generate the necessary momentum to definitively end the embargo.
Conference Background
The Cuba Consortium is an assembly of companies, non-profit organizations, investors, academics, and entrepreneurs organized to track and examine the normalization process in both countries and to inform and prepare its members for opportunities to engage Cuba. They are complemented by foreign policy, political, economic, international development, legal, and cultural experts who have specialized knowledge of the diplomacy, politics, and economics of the normalization process.
The Consortium’s Advisory Board is co-chaired by Senators Nancy Kassebaum Baker and Tom Daschle and includes Dr. Michael Adams, Lon Augustenborg, Richard Blum, Sheila Burke, Tomas Diaz de la Rubia, Senator Byron Dorgan, Rodney Ferguson, Senator Bill Frist, Dr. Helene Gayle, Maurice Greenberg, Senator Bob Kerrey, Linda Klein, Fred Malek, Janet Napolitano, Thomas Ross, Senator Olympia Snowe, The Honorable Ellen Tauscher, Bill Weldon, and Rob Wilder.
The Consortium was organized by the Howard Baker Forum, which was founded by former Senator Howard Baker to provide a platform for examining specific, immediate, critical issues affecting the nation’s progress at home and its relations abroad under a philosophy of reasoned consensus, founded upon an agreed set of facts.
Conclusion
The Consortium and its conference join the U.S. Agricultural Coalition for Cuba and Engage Cuba as important bipartisan U.S. efforts to promote U.S.-Cuba reconciliation. I applaud all of their efforts.
On the same day of this conference, the White House announced that President Obama and Michelle Obama will be visiting Cuba on March 21 and 22. The White House Press Secretary said, “In Cuba, the President will work to build on the progress we have made toward normalization of relations with Cuba – advancing commercial and people-to-people ties that can improve the well-being of the Cuban people, and expressing our support for human rights. In addition to holding a bilateral meeting with Cuban President Raul Castro, President Obama will engage with members of civil society, entrepreneurs and Cubans from different walks of life.”
The previously mentioned Benjamin Rhodes also issued a similar statement that also reviewed the various steps towards normalization since December 17, 2014.
Before President Obama’s trip, I anticipate and hope that the U.S. will announce additional steps in the process of normalization, including:
issue new regulations allowing or expanding Cuba’s ability to use the U.S. Dollar in international transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications;
announce the ending of special U.S. immigration benefits for Cubans, including the policy of allowing entry without visas into the U.S. of Cubans arriving by land (the dry feet policy); and
announce further steps in the process of resolving U.S. claims against Cuba for expropriation of property owned by U.S. persons without compensation.
In addition, it is hoped that before President Obama’s trip Cuba will make Cuban economic and business regulations publicly available; provide clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorize Cuban imports of U.S. products that are now allowed by U.S. regulations. In addition, some improvement in Cuban human rights would be helpful, an objective apparently to be pursued in Havana next week by Secretary of State John Kerry. ==========================================
[1] Gomez, Rapprochement moving forward, Granma (Feb. 22, 2016). Amazingly a 2/23/16 Google search of “Cuba Consortium” did not reveal any U.S. media coverage of this Conference. Secretary Pritzker’s speech was on the website of the U.S. Treasury Department.
On January 26, the U.S. Departments of the Treasury and Commerce released additional amendments to regulations regarding export payment and financing and airline travel with Cuba that will be effective on January 27.[1]
The changes will authorize financial transactions regarding professional meetings, disaster preparedness, information and informational materials and professional media or artistic productions in Cuba.
Other changes will allow U.S. airlines to have blocked space, code-sharing and leasing arrangements with Cuban airlines.
Treasury Secretary Jacob J. Lew said, “Today’s amendments to the Cuban Assets Control Regulations build on successive actions over the last year and send a clear message to the world: the United States is committed to empowering and enabling economic advancements for the Cuban people. We have been working to enable the free flow of information between Cubans and Americans and will continue to take the steps necessary to help the Cuban people achieve the political and economic freedom that they deserve.”
Commerce Secretary Penny Pritzker said, “Following the first ever U.S.-Cuba Regulatory Dialogue and my fact-finding trip to Cuba in October, we have been working tirelessly to maximize the beneficial impact of U.S. regulatory changes on the Cuban people. Today’s Commerce rule builds on previous changes by authorizing additional exports including for such purposes as disaster preparedness; education; agricultural production; artistic endeavors; food processing; and public transportation. These regulatory changes will also facilitate exports that will help strengthen civil society in Cuba and enhance communications to, from and among the Cuban people. Looking ahead, we will continue to support greater economic independence and increased prosperity for the Cuban people, as we take another step toward building a more open and mutually beneficial relationship between our two nations.”
As noted in a prior post, on September 12, 2015, the U.S. and Cuba established an agenda for their bilateral commission to address various issues relating to normalization of relations. Since then there has been limited progress on that agenda.
On September 18, the U.S. Departments of Treasury and Commerce issued new regulations to ease sanctions related to travel, telecommunications and internet-based services, business operations in Cuba, and remittances. The new rules will allow U.S. companies to establish offices and subsidiaries in Cuba, permit joint ventures between U.S. and Cuban firms and make it easier for airlines and cruise ships to import parts and technology to Cuba to improve the safety of their operations.[1]
Secretary Penny Pritzker in CubaSecretary Pritzker with Cuban children
On October 6 and 7, U.S. Commerce Secretary Penny Pritzker was in Cuba to launch a new Regulatory Dialogue between the U.S. and Cuba focused on the impact of new U.S. regulations by her Department and by the Department of Treasury’s Office of Foreign Assets Controls (OFAC). The Dialogue also gave Secretary Pritzker and additional U.S. officials from the Departments of Commerce, State, and Treasury the opportunity to hear from their Cuban counterparts on the structure and status of the Cuban economy. Secretary Pritzker also visited the Mariel Special Development Zone with U.S. charge d’affaires Jeffrey DeLaurentis.[2]
On October 27-30, high-ranking officials of the U.S. Department of Homeland Security visited Cuba to meet with leaders in the Cuban Ministries of Interior, Transportation and Foreign Relations. Issues discussed included aviation security, combating drug trafficking, cybersecurity and resumption of passenger ferry services between Havana and Florida.[3]
Secretary Mayorkas in Havana
The DHS delegation was led by the Department’s Deputy Secretary, Alejandro Mayorkas, who as an infant left Cuba with his family in 1960. On the last afternoon of his DHS trip, he visited a family cemetery, where his grandmother, great aunt and great uncle are buried as well as his father’s elementary school and steel-wool factory. His Cuban hosts, Mayorkas said, were aware of his personal history and “could not have been more gracious and kind” in presenting him with a gift: his family’s original Cuban government immigration file.[4]
The last week of October also was the occasion for the annual Havana International Fair. Attending was an U.S. Chamber of Commerce delegation of 40 U.S. companies including Caterpillar, Amway, Sprint and Cargill for meetings with Cuban officials and the first board meeting of the U.S.-Cuba Business Council, a group dedicated to trade between the two countries. Jodi Bond, the Chamber’s vice president of the Americas, said the council was optimistic that trade will begin to flow between the U.S. and Cuba as each country figures out how to harmonize clashing sets of byzantine regulations. “We want to see U.S. products as part of that beautiful build-out of Cuba,” Bond said. “We’ve done this in so many markets around the world we know that it just takes time.” One of the U.S. companies in the delegation, Sprint, signed an agreement with Cuba to broaden its service to the island[5]
The U.S. and Cuba also are discussing cooperation on baseball, including making it easier for Cuban players to join U.S. professional baseball organizations and for U.S. major league teams to play spring games in Cuba.[6]
Despite these developments, there are voices of disappointment that the process of normalization is not leading to more business transactions. Another post will explore possible reasons for the slow pace of such transactions.
Today, September 18, the United States announced new regulations to improve U.S. trade and travel with Cuba. Additional positive changes also are expected over the next several months.[1]
New Trade and Travel Regulations
The U.S. Departments of the Treasury and Commerce on Friday announced new regulations, to be effective on September 21 upon their publication in the Federal Register, that will ease restrictions on U.S. companies seeking to do business in Cuba and on U.S. citizens traveling to the island.
The new rules target travel, telecommunications, Internet-based services, business operations, banking and remittances. They also will allow U.S. companies to establish a presence in Cuba with offices, stores, warehouses and Cuban employees.
Although the new rules do not change who can travel to Cuba, the rules do ease movement of authorized travelers there by licensing transportation providers. They also lift the cap on remittances and allow U.S. travelers to open and maintain bank accounts there.
The new regulations also increase educational opportunities by allowing Internet-based courses and further expand humanitarian efforts by allowing disaster relief.
Treasury Secretary Jacob J. Lew said, “Today’s announcement underscores the Administration’s commitment to promote constructive change for the Cuban people. These regulatory changes build on the revisions implemented earlier this year and will further ease sanctions related to travel, telecommunications and internet-based services, business operations in Cuba, and remittances. A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike. By further easing these sanctions, the United States is helping to support the Cuban people in their effort to achieve the political and economic freedom necessary to build a democratic, prosperous, and stable Cuba.”
Commerce Secretary Penny Pritzker added, “The regulations published today are designed to support the emerging Cuban private sector and bring us one step closer to achieving President Obama’s historic policy goals. These actions build upon previous Commerce regulatory changes, and will ease travel restrictions, enhance the safety of Americans visiting the country, and promote more business opportunities between U.S. and Cuban companies. In addition to expanding our commercial engagement with the Cuban people, these additional adjustments have the potential to stimulate long overdue economic reform across the country.”
According to the president of the U.S.-Cuba Trade and Economic Council, the two departments have “gone farther at one time than most anyone expected. Not only are companies able to establish a physical presence in Cuba and hire Cuban workers, but . . . [the new rules] are also extending loans and lease payment terms for authorized products.
Other Future Changes
The U.S. and Cuba will open regular postal mail service. Initially it will be a “pilot program” allowing Cubans and Americans to send mail directly to one another using the Miami and Havana airports.
The two countries soon should finalize an agreement on resuming direct, commercial airline routes although the first flights will not happen until next year.
Progress before year-end is expected on counter-narcotics cooperation that will expand Coast Guard interdiction efforts to include the U.S. Drug Enforcement Agency partnering with its Cuban counterpart; joint environmental work involving the National Oceanic and Atmospheric Administration; and setting up maritime passenger routes.
The Committee Chair, U.S. Senator Pat Roberts (Rep., KS), opened the hearing by stating, “At the beginning of this Congress, I was hopeful that trade would be one area where we could work across the aisle to find agreement. I am still hopeful that is the case. . . . International trade of American agriculture products is critical…critical to the nation’s economy and critical to our Kansas farmers and ranchers. I have long fought to eliminate barriers to trade, and I believe that we should continue to work towards new market access opportunities for our agriculture products.”
“The United States and Cuba have a long history full of contention and instability. There is no shortage of opinion from members of Congress about the relationship between our two countries, both present and future. Some are concerned about human rights, others about socioeconomic ideology. But those concerns are not what this committee will focus on this morning. Today we are here to discuss the role of agriculture – opportunities and challenges – in Cuba.”
“This is not an issue that we are going to be able to fix overnight. It will take efforts in addition to bills in Congress to truly normalize trade with Cuba. The decisions that are made regarding increased trade with Cuba must be made carefully.”
“Four months ago the President announced a major shift in U.S. policy towards Cuba. It is my hope that in the future, the President will work with Congress to determine the best path forward. Foreign policy does not happen in a vacuum. We have to take a realistic approach and work out a step-by-step plan towards lifting the embargo. This is a goal that should include Congress.”
“Today we will hear from an impressive panel of experts, from the regulators responsible for writing our policies toward Cuba, to the producers who seek to grow the market for their products. I understand that, like myself, many of our witnesses here have traveled to Cuba to see first-hand what challenges and opportunities exist.”
“Agriculture has long been used as a tool – not a weapon – for peace and stability. It is my hope that Cuba will embrace the practices of free trade, enterprise and commerce, so that both countries will gain from increased relations.”
“Earlier this year, the U.S. Agriculture Coalition for Cuba was launched. They have shared a statement and additional information in support of our work today, [which was] entered into the record.”
Senator Debbie Stabenow (Dem., MI), the Ranking Committee Member, said, “Improving trade with Cuba represents not only a great opportunity for America’s farmers, ranchers, and manufacturers, but a meaningful way to help rebuild trust between our nations. After more than 50 years of stalemate, it’s time for a new policy on Cuba.”
“When I visited Cuba earlier this year – just days after President eased some trade restrictions – I saw firsthand the eagerness of Cubans who want to develop a more effective relationship with the [U.S.] But we can only get there if we begin to take meaningful steps to soften many of the barriers that exist between us.”
“And America’s farmers and ranchers are uniquely positioned to lead the way. Consider this – in 2014, the U.S. exported just over $290 million in agricultural goods to Cuba. That’s a good start, but for a country only 90 miles off our coast, we can do much more. Cuba’s own import agency estimates that it will receive approximately $2.2 billion (in U.S. dollars) worth of food and agricultural products this year alone.”
“That type of economic potential deserves a chance to succeed – and is one reason why many of the largest producer groups, trade associations, and companies from within agriculture have come together to push for increased engagement.”
“Many on this Committee have pushed for increased engagement and have taken the opportunity to visit Cuba in recent months. I’d like to recognize Senators Leahy and Klobuchar, as well as Senator Boozman and Heitkamp, for their bipartisan leadership on this issue.”
“The commitment to democratic ideas and human rights we share as Americans are best realized through engagement. Our bedrock principles accompany every product farmers and ranchers send to Cuba.”
“Last week’s action by the President [in rescinding the designation of Cuba as a “state sponsor of terrorism”] is a step forward toward in normalizing our relationship and will test the commitment of the Cuban government to this process.”
“But even while we are making significant progress in rebuilding our relationship with Cuba – the policies governing trade between our countries are not yet designed to allow a steady flow of goods and services. We must find a path forward that allows U.S. financial institutions to safely and securely work with Cuban purchasers, including the extension of lines of credit. And we should work to authorize a greater range of goods, services, and supplies for export to Cuba. These measures not only make good business sense – they also will help build Cuba’s agricultural capacity and make the island a better trading partner in the long run.”
The witnesses at the hearing were the following: (1) The Honorable Michael T. Scuse, Under Secretary, Farm and Foreign Agriculture Services, U.S. Department of Agriculture; (2) Mr. Matthew Borman, Deputy Assistant Secretary, Bureau of Industry and Security, U.S. Department of Commerce; (3) Mr. John Smith, Acting Director, Office of Foreign Assets Control, U.S. Department of the Treasury; (4) Mr. Michael V. Beall, President & CEO, National Cooperative Business Association; (5) Mr. Terry Harris, Senior Vice President, Marketing and Risk Management, Riceland Foods; (6) Mr. Ralph Kaehler, Farmer and Owner, K-LER Cattle Company, St. Charles , MN; (7) Mr. Doug Keesling, Fifth Generation Owner, Keesling Farms, Kansas Wheat, Chase , KS; and (8) Dr. C. Parr Rosson III, Professor & Department Head, Department of Agriculture Economics, Texas A&M University.
Witness Ralph Kaehler
Senator Amy Klobuchar
Minnesota’s Senator Amy Klobuchar, who is a member of the Committee and the author of the Freedom to Export to Cuba Act (S.491) ending the U.S. embargo of Cuba, introduced Ralph Kaehler, whose family has been operating a livestock, row crop, and canning vegetable farm in Minnesota for nearly 130 years.
The Senator prefaced her introduction with this statement: “For too long, export and travel restrictions have prevented American farmers and ranchers from seeking opportunities in Cuba. That is why I have introduced bipartisan legislation to lift the trade embargo on Cuba, and this hearing allowed us to focus on how we can ensure that our farmers and ranchers benefit from normalized relations between our two countries.”
Mr. Kaehler testified that his farm was “an exhibitor in the First U.S./Cuba Food and Agriculture Exposition [in Havana] in 2002.” It “was the only one with live animals— affectionately known as the ‘Cuban Ark’ . . . to exhibit the diversity of U.S. livestock producers, and to introduce Cuba to the typical USA farm family.”
“Since then, the Kaehler Family has led over 10 trade delegations to Cuba. These missions have included producers from seven different states and a bipartisan mix of state lawmakers and officials. To date, some of the most successful exports to Cuba we have facilitated include shipments of livestock, dried distillers grains, powdered milk, animal milk replacer, and texturized calf feed.”
“Given the opportunity, U.S. farmers do well in Cuba. We have a significant advantage of shorter shipping over Europe, South America, Asia, and other major exporters. In addition, Cuba can take advantage of U.S. rail container service and sizing options, which also brings significant benefits to smaller privately owned businesses like ours. On top of all this, the U.S. produces a wide variety of affordable and safe food products that Cubans want to eat.”
“Unfortunately, some of the policies currently in place diminish the natural advantages American agriculture enjoys over its competitors. For instance, requirements for using third country banks for financing adds a lot of paperwork, time, and personalities to every transaction. Coupled with a restrictive cash‐in advance shipping policy . . . there is a very small margin for error before a shipper faces demurrage fees. As a family operation trying to build our business through exports, this self‐inflicted inefficiency can be tough to manage.”
Mr. Kaehler then made three specific recommendations to Congress. “First, . . . improve the trade financing rules for Cuba. . . . Second, . . . small firms like ours . . . need marketing support and assistance [from USDA] to help support our companies and figure out exactly what’s going on in markets abroad. . . . [Third,] I hope that Congress will expand the universe of people involved in U.S.‐Cuba trade by allowing a greater variety of goods and services to be traded.”
[1] A quick examination of the official websites of the Committee’s 20 members reveals that seven have made statements favoring at least some aspects of U.S.-Cuba reconciliation (Boozman (Rep., AK), Brown (Dem., OH), Heitkamp (Dem., ND), Hoeven (Rep., ND), Klobuchar (Dem., MN), Leahy (Dem., VT) and Stabenow (Dem., MI)). Only two have negative statements about that reconciliation (Grassley (Rep., IA) and Perdue (Rep., GA)). The other eleven members‘ websites do not reveal any position on Cuba (Bennet (Dem., CO), Casey (Dem., PA), Cochran (Rep., MS), Donnelly (Dem., IN), Ernst (Rep., IA), Gillibrand (Dem., NY), McConnell (Rep., KY), Roberts (Rep., KS), Sasse (Rep., NE), Thune (Rep., SD) and Tillis (Rep., NC)). A more thorough examination of the records of the last 11 would probably uncover other indications of their positions on reconciliation with Cuba.
Effective January 16th the U.S. is easing restrictions on Americans’ travel and exports to Cuba.[1]
Under the new regulations, Americans will now be allowed to travel to Cuba for any of the following specific reasons without first obtaining a special license from the U.S. government:
family visits;
official business of the U.S. government, foreign governments, and certain intergovernmental organizations;
journalistic activity;
professional research and professional meetings;
educational activities;
religious activities;
public performances, clinics, workshops, athletic and other competitions, and exhibitions;
support for the Cuban people;
humanitarian projects;
activities of private foundations or research or educational institutes; exportation, importation, or transmission of information or information materials; and
certain authorized export transactions.
Airlines and travel agents will be allowed to provide service to Cuba without a specific license.
Travelers will be permitted to use credit cards and spend money while in the country and bring back up to $400 in souvenirs, including up to $100 in alcohol or tobacco. In addition, Americans will be allowed to send more money to Cubans, up to $2,000 every three months instead of the $500 currently permitted.
The new regulations will also make it easier for U.S. telecommunications providers and financial institutions to do business with Cuba.
Treasury Secretary Jacob J. Lew, whose department oversees sanctions policy, said in a statement, “These changes will have a direct impact in further engaging and empowering the Cuban people, promoting positive change for Cuba’s citizens. The amended regulations also will facilitate authorized business for U.S. exporters and enhance communications and commerce between Cuba and the United States. To the extent legally possible, the President has made clear that we want U.S. policy to ease the burdens on the Cuban citizens we seek to help.”
“Cuba has real potential for economic growth and by increasing travel, commerce, communications, and private business development between the United States and Cuba, the United States can help the Cuban people determine their own future.”
Commerce Secretary Penny Pritzker issued a similar statement with respect to changed regulations from her department. She said, “our regulations will change export policy and authorize the flow of certain goods and services to Cuba without a license, to spur private sector activity and encourage entrepreneurship in Cuba. These are smart changes in America’s outdated policy that will help the Cuban people realize an improved standard of living, greater economic independence, and increased prosperity.”
