Vail Daily column: Cuba: Understanding the embargo
Last week, I returned from Cuba. It is a nation of warm people with music everywhere. It is also a land of overarching poverty. Besides being frozen in time, it seemed almost post-apocalyptic. There were people living in crumbling edifices that most Americans would deign to enter. All of Cuba needs a good scrubbing and a fresh coat of paint.
Daily as we traveled, Cubans came up to us and, asking where we were from, demonstratively welcomed us and enthused how they longed for rapprochement between their nation and ours. The phrase they used repeatedly was that America was their “last hope.”
When you read this, President Obama will have concluded his historic two-day trip to Havana. He will have been the first sitting president in nearly 90 years to set foot on the island nation. The most recent sitting president to do so was Calvin Coolidge in 1928. Havana is a shorter distance from Miami than Grand Junction is to Fort Collins. Geography has placed it at a strategic crossroads that has been both a blessing and a bane.
The purpose of the president’s visit is to begin to thaw relations with our neighbor to the south after a chill has stood between us for the past half century. The first step in so doing was to open an U.S. embassy along Havana Harbor about 15 months ago. With no apparent irony, the embassy is just a stone’s throw from the Anti-Imperialist Plaza, a site used largely for rallies and protests against the U.S. And yet the change that was in the air was palpable.
Among other things, the president intends to open Cuban markets to already budding indigenous entrepreneurship and, one day, to U.S. goods and American investment. Most of the restaurants in which we ate were privately owned “paladars” which are new to Cuba. The streets were lined with small shops — some as tiny as goods stacked up a staircase leading to a family’s living quarters — run by budding Waltons, J.C. Penny’s and Roy Larson Raymonds. There is little doubt that some good old Yankee know-how would jump start the stagnant Cuban economy, which, although never strong, sank to new lows following collapse of the Soviet Empire in 1989.
Some think the president’s visit is misguided; that he should not deal mano-a-mano with President Raul Castro or a with a nation that has had a penchant for human rights abuses. There is traction in that argument. And yet, the longstanding U.S. policy of isolating Havana is due for review. Washington engages with authoritarian regimes of all kinds. Moreover, hopes that U.S. isolation would help topple the Castro regime has proved illusory. First Fidel, and now his brother, Raul, have held the reins of power since the 1950s. That said, Fidel Castro is 90 and Raul is 85. Change, inevitably, will come. Raul has said that he will step down next year in favor of Vice President Miguel Diaz-Canel, who many believe will accelerate the pace of change.
How we got here with Cuba
Although I have my personal beliefs as to how far, how fast and how deeply the U.S. should involve itself in Cuban change, that is not the purpose of this column. Instead, my intended focus is more on how we got to where we are. What is the nature of the big chill between America and Cuba?
The context in which one must consider the embargo is the Cold War, of which Cuba is a relic, a vestige of the historic tension between American democracy and Sino-Soviet collectivism. One must bear in mind that Cuba remains both communist and a dictatorship, both of which have earned our caution. With little doubt, neither the Bay of Pigs fiasco in 1961 nor the Cuban Missile Crisis in 1962 helped bridge the gap between our nations.
The United States embargo against Cuba (in Cuba, called “el bloqueo,” or “the blockade”) is a commercial, economic and financial embargo imposed by the United States. An embargo was first imposed by the United States on Cuba on Oct. 19, 1960 (almost two years after the Batista regime was deposed by the Cuban Revolution), when the U.S. placed an embargo on exports to Cuba with an exception for food and medicine after Cuba nationalized American-owned Cuban oil refineries without compensation.
In early 1962, President John F. Kennedy extended the embargo to include almost all imports. The Cuban embargo is enforced mainly through six statutes: the Trading with the Enemy Act of 1917, the Foreign Assistance Act of 1961, the Cuban Assets Control Regulations of 1963, the Cuban Democracy Act of 1992, the Helms–Burton Act of 1996 and the Trade Sanctions Reform and Export Enhancement Act of 2000. The stated purpose of the Cuban Democracy Act of 1992 is to maintain sanctions on Cuba so long as the Cuban government refuses to move toward “democratization and greater respect for human rights.” The Helms–Burton Act further restricted United States citizens from doing business in or with Cuba, and mandated restrictions on giving public or private assistance to any successor government in Havana unless and until certain claims against the Cuban government were met.
In 1999, President Clinton further expanded the trade embargo by also disallowing foreign subsidiaries of U.S. companies to trade with Cuba. In 2000, Clinton authorized the sale of humanitarian U.S. products to Cuba.
The embargo continues to stand, in part, because, beyond criticisms of human rights in Cuba, the United States holds $6 billion worth of financial claims against the Cuban government. At present, the embargo, which limits American businesses from conducting business with Cuban interests, is still in effect. It is the longest-enduring trade embargo in modern history. Despite the existence of the embargo, the United States is the fifth largest exporter to Cuba (6.6 percent of Cuba’s imports are from the US). However, Cuba must pay cash for all imports, as credit is not allowed.
Will things change following the President’s visit? Almost certainly. What remains unanswered is the pace of change and how the next administration will either build upon the inroads or retrench Cuban isolation. One thing is certain; Cuba will change with or without us. And at least part of the discussion must be if and how we wish to be part of the new direction it inevitably will take.
Rohn K. Robbins is an attorney licensed before the bars of Colorado and California who practices in the Vail Valley with the law firm of Stevens, Littman, Biddision, Tharp and Weinberg LLC. His practice areas include business and commercial transactions, real estate and development, family law, custody, divorce and civil litigation. Robbins may be reached at 970-926-4461 and at firstname.lastname@example.org and email@example.com.