United States embargo against Cuba

The United States embargo against Cuba (described in Cuba as el bloqueo, Spanish for "the blockade") is an economic, commercial, and financial embargo imposed on Cuba on February 7, 1962. The embargo was enacted after Cuba expropriated the properties of United States citizens and corporations (notably those that belonged to the United Fruit Company and the ITT).

The embargo was codified into law in 1992 with the stated purpose of bringing democracy to the Cuban people, and in fact is entitled the Cuban Democracy Act. In 1996 Congress passed the Helms-Burton Act which further restricted United States citizens from doing business in or with Cuba, and mandated restrictions on giving public or private assistance to any successor regime in Havana unless and until certain claims against the Cuban government are met. In 1999, U.S. President Bill Clinton expanded the trade embargo even further by ending the practice of foreign subsidiaries of U.S. companies trading with Cuba in dollar amounts totaling more than $700 million a year.

As of 2007, the embargo which limits American businesses from trading or conducting business with Cuban interests is still in effect, making it one of the few times in history that United States citizens have been restricted from doing business abroad, and is the most enduring trade embargo in modern history. Despite the existence of the embargo, it is worth noting that not all commerce from the United States to Cuba is restricted, as the United States is the seventh largest exporter to Cuba (mainly aid).^[1]

Before the embargo

See main article Cuba-United States relations

The United States and Cuba have a long history of close economic and political ties. Though Cuba had been a Spanish colony for nearly 400 years, the island had developed increasing trade links with the United States during the 19th century. In December of 1898, Spain ceded control of Cuba to the U.S. following her defeat in the Spanish-American War.

The U.S. subsequently granted Cuba its independence in 1902, yet frequently intervened in Cuban political affairs. There was substantial U.S. investment in Cuban production of sugar and tobacco for export, and in tourism, as well as preferential access for Cuban exports to the United States. By 1926 U.S companies owned 60% of the Cuban sugar industry and imported 95% of the total Cuban crop.^[2]

The Cuban Revolution of 1959 saw the overthrow of General Fulgencio Batista and the rise to power of Fidel Castro. The U.S. government formally recognized the new Cuban administration, but relations were to deteriorate rapidly as the Cuban government passed the first Agrarian Reform Law, allowing for the expropriation of large-scale (largely American-owned) land holdings. The compensation offered (based on 20-year bonds at 4.5% interest for the tax-declared value) was seen as inadequate, and was rejected by American interests. What also worried the American government was that by the end of 1959 there was evidence of a Cuban-Soviet rapprochement. During 1960, tensions between Cuba and the US escalated into economic warfare. Each time the Cuban government took control of American properties, the American government in response to that took countermeasures, resulting in the prohibition of all exports to Cuba on October 19, 1960.

Embargo

Fidel Castro at a meeting of the United Nations General Assembly

A U.S. arms embargo had been in force since March 1958 when armed conflict broke out in Cuba between rebels and the Batista government. In July 1960, in response to the expropriations by the Cuban government, the United States reduced the Cuban import quota of sugar by 700,000 tons; the Soviet Union responded by agreeing to purchase the sugar instead, and Cuba took further actions to take over American businesses. A partial economic embargo was imposed by U.S. President Dwight D. Eisenhower on October 19, 1960, and diplomatic relations were broken on January 3, 1961—two years after Castro's rise to power. The Soviet Union promptly stepped in, offering Cuba "preferential" trade prices, mainly for the sugar that Cuba exported and the crude oil the USSR sold them.

In response to Cuba's alignment with the Soviet Union during the Cold War, President John F. Kennedy extended Eisenhower's measures by Executive Order, first widening the scope of the trade restrictions on February 7 (announced on February 3) and again on March 23, 1962. (According to former aide Pierre Salinger, Kennedy asked him to purchase thousands of Cuban cigars for Kennedy's future use immediately before the extended embargo was to come into effect.)^{[citation needed]} Following the Cuban Missile Crisis, Kennedy imposed travel restrictions on February 8, 1963, and the Cuban Assets Control Regulations were issued on July 8, 1963, under the Trading with the Enemy Act in response to Cubans hosting Soviet nuclear weapons, which led to the Cuban Missile Crisis. Under these restrictions, Cuban assets in the U.S. were frozen and the existing restrictions were consolidated.

Multilateral sanctions were imposed by the Organization of American States (OAS) on July 26, 1964, but these were abandoned on July 29, 1975.

The restrictions on U.S. citizens traveling to Cuba lapsed on March 19, 1977; the regulation was renewable every six months, but President Jimmy Carter did not renew it and the regulation on spending U.S. dollars in Cuba was lifted shortly afterwards. President Ronald Reagan reinstated the trade embargo on April 19, 1982. This has been modified subsequently with the present regulation, effective June 30, 2004,^[3] being the Cuban Assets Control Regulations, 31 C.F.R. part 515.^[4] The current regulation does not limit travel of US Citizens to Cuba per se, but it makes it illegal for US Citizens to have transactions (spend money or receive gifts) in Cuba under most circumstances without a US government Office of Foreign Assets Control issued license[3].

The 1963 U.S. embargo was reinforced in October 1992 by the Cuban Democracy Act (the "Torricelli Law") and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms-Burton Act) which penalises foreign companies that do business in Cuba by preventing them from doing business in the US. The justification provided for these restrictions was that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States.

The European Union resents the Helms Burton Act because it felt that the US was dictating how other nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in favor of negotiating a solution.^[5]

After the shootings of the Brothers to the Rescue planes in 1996, a bi-partisan coalition in the United States Congress approved the Helms-Burton Act. This Title III of this law also states that any non-U.S. company that "knowingly traffics in property in Cuba confiscated without compensation from a U.S. person" can be subjected to litigation and that company's leadership can be barred from entry into the United States. Sanctions may also be applied to non-U.S. companies trading with Cuba. This restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. It's important to note that this title includes waiver authority, so that the President might suspend its application. This waiver must be renewed every six months and it has traditionally been. It was renewed for the last time July 17, 2006,^[6] therefore the suspension of this provision will remain effective for, at least, another six months following that date.

A tobacco plantation in Cuba. In the new millennium, the US Dept. of Justice modified its original embargo on Cuban products to allow importation of a limited amount of Cuban cigars when returning from a licensed trip to Cuba. Effective 2007, however, the United States has once again made it illegal for US nationals to purchase or consume Cuban cigars, in Cuba, or elsewhere, whether licensed or not.

In response to pressure from some American farmers and agribusiness, the embargo was relaxed by the Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress in October 2000 and signed by President Bill Clinton. The relaxation allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. Although Cuba initially declined to engage in such trade, seeing it as a half-measure serving U.S. interests, Castro began to allow the purchase of food from the U.S. as a result of Hurricane Michelle in November 2001. These purchases have continued and grown since then.

Spurred by a burgeoning interest in the assumed untapped product demand in Cuba, a growing number of free-marketers in Congress, backed by Western and Great Plains lawmakers who represent agribusiness, have tried each year since 2000 to water down or completely erase regulations preventing Americans from travelling to Cuba. Four times over that time period the United States House of Representatives has adopted language lifting the travel ban, and in 2003 the U.S. Senate followed suit for the first time. However, each time President George W. Bush, has threatened to veto the bill. Faced with a veto threat, each year Congress has dropped its attempt to lift the travel ban. United States nationals can circumvent the ban by traveling to Cuba from a different country (such as Mexico, The Bahamas or Canada), as Cuban immigration authorities do not stamp passports. In doing so, they would risk prosecution by the U.S. government if discovered. On October 10, 2006 the United States announced the creation of a task force made up of officials from several US agencies that will pursue more aggressively violators of the US trade embargo against Cuba, with penalties as severe as 10 years of prison and thousands of dollars in fines for violators of the embargo.^[7]

Effects of the embargo

Impact on the economy

The Cuban Assets Control Regulations impose restrictions on imports to the U.S. from Cuba and exports from the U.S. to Cuba (including gifts of goods and cash) and on transactions with Cuba or Cuban nationals, impose a "total freeze" or "block" on Cuban assets and financial dealings with Cuba that enter the U.S. or come under U.S. jurisdiction, and restrict travel to Cuba (subject to certain exceptions and licensing). They also make it illegal for U.S. citizens or permanent residents to purchase Cuban goods for consumption outside the U.S. As of 2006, the Regulations are still in force and are administered by the U.S. Treasury Department's Office of Foreign Assets Control. Criminal penalties for violating the embargo range up to ten years in prison, $1 million in corporate fines, and $250,000 in individual fines; civil penalties up to $55,000 per violation may also be imposed.

In 1958, the U.S. accounted for 67% of Cuba's exports and 70% of its imports; Cuba accounted for three percent of US exports and four percent of U.S. imports, placing it seventh on both the lists of U.S. export markets and U.S. import sources. In the early years of the embargo, official trade between the U.S. and Cuba was completely eliminated.

The Cuban government estimates that the total direct economic impact caused to Cuba by the U.S. embargo is $86 billion, including loss of export earnings, additional import costs, and limiting the growth of the Cuban economy. The U.S. International Trade Commission estimates an ongoing annual loss to U.S. exporters of $1.2 billion. Nevertheless, the embargo had a limited effect on Cuba in its first few decades as the island nation was heavily subsidized by the Soviet Union and the Comecon nations which supplied Cuba with cheap oil, consumer goods, and subsidies. This peaked in the 1980s, when Cuba received around $6 billion per annum. Cuba also was provided with guaranteed export markets for its goods (mainly sugar and nickel), long-term supply and delivery arrangements for Soviet oil and machinery at low prices, and trade credits to support its other trading arrangements.

The collapse of the Soviet bloc in 1989 and of the Soviet Union itself two years later resulted in an economic crisis in Cuba and in the embargo, having its greatest effect by denying Cuba the ability to replace Soviet imports with U.S. imports. Cuba has developed trading relations with the rest of the world, including a substantial amount of official (as well as much unofficial) trade with the U.S. but since the U.S. is the closest geographic entity to Cuba and the dominant producer in the region, the necessity of importing goods from elsewhere (such as Europe) made these goods prohibitively more expensive due to transportation costs. Despite the difficulties created by the embargo in the 1990s, Cuba defied predictions that without Soviet support it would quickly collapse. The end of Soviet support was partly compensated by Cuba opening up to tourism.

Official U.S. exports to Cuba in 1999 totaled $4.7 million, mainly donations of medical aid, pharmaceuticals and other relief or charitable aid, and Cuba ranked 180th out of 180 on the list of importers of U.S. agricultural products in 2000. As a result of the relaxation of sanctions since 2000, Cuba rose to 138th on the agricultural product export list in 2001, 45th in 2002, and was estimated to rank 33rd in 2003.

The US State Department in the report Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba^[8] states that the U.S. embargo has added, at most, relatively small increases in transportation costs. It claims that the main problem is not the embargo but the lack of foreign currency due to the unwillingness to liberalize the economy, diversify the export base, and the need to pay off substantial debts owed to its Japanese, European, and Latin American trading partners acquired during the years of abundant Soviet aid.

Although Cuba was a net food exporter prior to the revolution, food has been rationed in Cuba since 1962.^[9] Because of the chronic food shortages that plague the island, Cuba has become a net food importer. As a consequence, exports of food and related materials from the U.S to Cuba were valued at $344 million in 2006.^[10]

Impact on Cuban society

Mechanics in Cuba work hard to repair old cars because the trade embargo makes it very difficult to import new vehicles.^[11]

The embargo had an effect on the diverse musical culture of Cuba. Salsa, which was an amalgam of different Cuban musical styles, was popular in the U.S. from the 1950s. After the embargo, new forms of music such as Mozambique, Pilón and Songo continued to develop in Cuba, but went almost unheard on the continent despite the attraction that Cuban music generally provided. Also, records produced in New York under the Salsa label were actually Cuban songs. The Cuban resident composers of these songs were registered as all rights reserved, and were expected to receive royalties when the embargo was lifted. Thus, the true roots of Salsa have been somewhat hidden, a situation compounded by the fact that no new records could be imported from Cuba.^[12]

Impact on travel

It is estimated that each year some 80,000 Americans visit Cuba, including over 4,000 business visits. As much as $1 billion per year is remitted to Cuba by Cuban expatriates in the U.S. Much of this activity contravenes the spirit, if not the letter, of the embargo. Cuba produces a number of luxury items, especially cigars, that are in high demand among some Americans. In popular culture, such as in novels, television shows, and motion pictures, rich and powerful men are often shown to have their own personal stock of Cuban rum and cigars (illicitly obtained when in the United States).

Impact on Cuban-Americans

Though the community of Cuban expatriates in the U.S. is the main proponent of continuing the embargo, the policy has come to have a great effect on expatriate families, particularly more recent immigrants who still have family in Cuba, as they must circumvent the embargo in order to send goods to their relatives or even communicate with them. The leadership of these expatriates is dominated by opponents of the Cuban Revolution who fled to Miami in the years following 1959 and formed the backbone of the opposition to Fidel Castro, supporting and participating in initiatives such as the Bay of Pigs invasion and various anti-Castro terrorist organizations. While many of these older expatriates left Cuba because they lost their properties, or were simply opposed to the revolution, more recent immigrants from Cuba are more likely to have left the island due to purely economic considerations (for example, in the early 1990s after the fall of the Soviet Union) and are more likely to have family remaining on the island whom they wish to assist economically.

Criticism

The embargo has been the source of almost unanimous international criticism. Annual votes in the United Nations General Assembly that call on the U.S. to lift its sanctions pass with exceptionally large margins (173 to 3 in 2002; 179 to 4 in 2004). In the 2006 vote, only the U.S., Israel, the Marshall Islands, and Palau voted against the resolution (with Federated States of Micronesia abstaining).

The fact the US didn't impose sanctions on the Batista regime has led some scholars to question the true reason for the embargo; according to Noam Chomsky, this was revealed in "a declassified 1964 State Department document [which] declares Fidel Castro to be an intolerable threat because he 'represents a successful defiance of the United States, a negation of our whole hemispheric policy of almost a century and a half,' since the Monroe Doctrine declared that no challenge to U.S. dominance would be tolerated in the hemisphere."[4] Some critics of Chomsky would point out that the United States did impose an embargo on weapon sales in March 1958, ^[13] but did not impose trade sanctions because Batista's government did not expropriate its citizens' properties.

Some critics of the embargo argue that rather than undermining the socialist nature of the Cuban system, it tied Cuba even more closely to the USSR and resulted in it closely following the Communist model. Other critics point out the contradiction between the United States policy of isolating Cuba and its constructive engagement towards Communist states such as the People's Republic of China and Vietnam as well as the then-Communist states of eastern Europe and the Soviet Union, where it was argued that trade with the west is a means of encouraging economic reform. These critics tend to point out that none of the Cuban-Americans in Congress—senators Mel Martinez (R-Florida) and Bob Menendez (D-NJ) and representatives Lincoln Diaz-Balart (R-Florida), Mario Diaz-Balart (R-Florida), and Ileana Ros-Lehtinen (R-Florida)—have tried to re-enact similar economic restrictions on such other communist nations as China or Vietnam. While these members of Congress have not introduced legislation to reenact restrictions on commerce with those countries, supporters would point out that none of the Cuban-American members of Congress have supported normalizing relations with these countries in the first place. Likewise, there are some supporters of the embargo who would point out that none of the countries confiscated U.S. properties.

Some scholars argue that the embargo is the main reason that Cuba remains stuck to the communist model and resists calls for change from outside and from within.^[14]

Some argue that this contradiction is not a result of a strategic policy but a product of domestic American politics and, particularly, the impact of the Cuban-American lobby and their financial contributions to American electoral considerations. The embargo may even be seen as counterproductive since it allows the Cuban government to blame the US for every problem in Cuba, and to even receive support for this from many foreign governments.^[15]

There is a movement in the United States Congress to lift these restrictions based on the argument they have not accomplished their stated goal of bringing democracy to Cuba, and may in fact have contributed to strengthening the Cuban government. They have not made much progress amongst their colleagues, however, as the embargo continues to enjoy a bi-partisan majority in the House.

The Helms-Burton Act has been the target of criticism from Canadian and European governments in particular, who resent the extraterritorial pretensions of a piece of legislation aimed at punishing non-U.S. corporations and non-U.S. investors who have economic interests in Cuba. In the Canadian House of Commons, Helms-Burton was mocked by the introduction of the Godfrey-Milliken Bill, which called for the return of property of United Empire Loyalists seized by the American government as a result of the American Revolution (the bill never became law). Furthermore, the European Parliament in 1996 passed a law making it illegal for EU citizens to obey the Helms-Burton act. This EU law was clearly more symbolic than anything else, but virtually eliminated any weight the act had over EU citizens. ^{[citation needed]} The European Council:

while reaffirming its concern to promote democratic reform in Cuba, recalled the deep concern expressed by the European Council over the extraterritorial effects of the "Cuban Liberty and Democratic Solidarity (Libertad) Act" adopted by the United States and similar pending legislation regarding Iran and Libya. It noted the widespread international objections to this legislation. It called upon President Clinton to waive the provisions of Title III and expressed serious concern at the measures already taken to implement Title IV of the Act. The Council identified a range of measures which could be deployed by the EU in response to the damage to the interests of EU companies resulting from the implementation of the Act. Among these are the following:

1. a move to a WTO dispute settlement panel;
2. changes in the procedures governing entry by representatives of US companies to EU Member States;
3. the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
4. the establishment of a watch list of US companies filing Title III actions.

Some libertarian and conservative critics argue that the embargo actually helps Castro more than it hurts him by giving him a scapegoat he can use to blame for all of Cuba's problems. American business leaders and free marketers in particular argue that, as long as the embargo continues, non-U.S. foreign businesses in Cuba do not have to compete with U.S. businesses and thus will have a head start when and if the embargo is ended. They openly call for an end to the embargo.^[16]

Religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic hardships the embargo imposes on Cubans. Pope John Paul II called for the end to the embargo during his 1979 pastoral visit to Mexico, and again during his 1998 visit to Cuba. Patriarch Bartholomew I called the embargo a "historic mistake" while visiting the island on January 25, 2004. United States religious leaders have also opposed the embargo. A joint letter in 1998 from the Disciples of Christ and the United Church of Christ to the U.S. Senate called for the easing of economic restrictions against Cuba. Rev. Jesse Jackson, Rev. Al Sharpton, and Minister Louis Farrakhan have also publicly opposed the embargo. On May 15, 2002 former President Jimmy Carter spoke in Havana, calling for an end to the embargo, saying "Our two nations have been trapped in a destructive state of belligerence for 42 years, and it is time for us to change our relationship."

The Foreign Minister of the Republic of Cuba, Perez Roque called the embargo 'an act of genocide'. Cuba has also denounced as "theft" the use of frozen Cuban assets to pay for lawsuits filed in the US against the Republic of Cuba. [5]

In addition to the Cuban authorities, film director Michael Moore has also challenged the embargo by bringing 9/11 rescue workers in need of health care to Cuba to obtain subsidized health care.

See also

• History of Cuba
  • Spanish-American War (1898)
  • Cuban Revolution (1950s)
  • Cuban missile crisis (1962)
• Cuba-United States relations
• Economy of Cuba
• Helms-Burton Act
• Opposition to Fidel Castro

External links

• Four Decades of Failure: The U.S. Embargo against Cuba, October, 2005
• 2001 Report by the Cato Institute
• Cuba versus Blockade Cuban website opposing the embargo.
• The Effects of the U.S. Embargo Against Cuba
• The European Union's reactions to the Helms-Burton D'Amato legislation
• Timeline of the embargo
• Timeline of votes by the U.N. General Assembly
• U.S. embargo against Cuba fades away article on growing Cuban-American trade in food.
• U.S. Treasury - Office of Foreign Assets Control - Cuba Sanctions An overview of the Cuban Assets Control Regulations Title 31 Part 515 of the U.S. Code of Federal Regulations
• Public Affairs document February, 9th 2004 relating to the travel embargo
• Cuba Embargo Under Growing Siege A piece by the Council on Hemispheric Affairs regarding the current state of the embargo.

• USITC February 2001 report on the economic impact of the embargo (PDF, 3.8M)
• What Castro wants Time letter about the Cuban embargo
• U.S.-Cuba Trade Association
• U.S-Cuba Trade and Economic Council
• Effects of the Embargo on Cuban Healthcare

Filmography

"Cuba: Lost in the Shadows," a documentary about the impact of U.S.-Cuba relations and intrigue. Can be viewed online at Google video: http://video.google.com/videoplay?docid=1333400783825545990&hl=en

References

Cuba-United States relations

Bay of Pigs Invasion • Brothers to the Rescue • Cuban American • Cuban-American lobby • Cuban Five • Cuban Missile Crisis • Elián González affair • Guantanamo Bay Naval Base • Helms-Burton Act • List of Cuba-US aircraft hijackings • Luis Posada Carriles • Mariel boatlift • Opposition to Fidel Castro • Platt Amendment • Spanish-American War • United States embargo against Cuba • United States Interests Section in Havana • United States Ambassadors to Cuba

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