Jocelyn Mason Kelly McFarlane Anita Nyaga Int’l Trade Relations December 9, 2009 US-Cuban Trade Relations 1

Timeline 2 DateAction 1959President Eisenhower officially recognized the government of Cuba, after the Cuban Revolution October 19, 1960 Prohibition of all exports from US to Cuba January 3, 1961 US withdrew diplomatic recognition of the Cuban government 1962President Kennedy broadened the partial trade restrictions imposed by Eisenhower to a ban on all trade with Cuba, except for non-subsidized sale of foods and medicines. 1963Prohibited travel and financial transactions by U.S. citizens with Cuba 1975US allows foreign subsidiaries of US companies to sell products in Cuba, and that it would no longer penalize other nations for trade with Cuba

Timeline Con’t 3 DateAction 1977President Carter drops the ban on travel to Cuba 1978President Carter allows remittances to be sent into Cuba 1981President Reagan tightened the embargo and re-established the travel ban 1992Cuban Democracy Act- prohibited foreign-based subsidiaries of US companies from trading with Cuba, travel to Cuba by US citizens, and family remittances to Cuba 1996Helms-Burton Act- prohibits any non-US company that "knowingly traffics in property in Cuba confiscated without compensation from a US person" can be subjected to litigation and company's leadership can be refused entry into the US

Timeline Con’t 4 DateAction 1999Changes to the embargo, which include: - Sales of some food and agricultural products to private individuals and non-governmental organizations, - An increase in the number of charter flights to Cuba - Increases the amount of money a US visitor can spend on the island from $100 per day to $185 per day. 2001US companies began selling food to Cuba for the first time since the embargo began 2004President Bush enforces the travel ban and bans vessels from traveling to Cuban ports from US ports March 2009President Obama signs a Congressional spending bill easing economic sanctions and travel restrictions for Cuban- Americans

Embargo Restrictions Travel Remittances Export of goods into Cuba Limit flight and port activity Business Trade Partners Subsidiaries 5

Goals of the Embargo Government Reform Human rights improvements Limit trade opportunities 6

US CUBA TRADE RELATIONS MAJOR ISSUES The US embargo against Cuba is a financial, economic and commercial sanction that has been in effect since The embargo makes it illegal for US corporations to do business with Cuba

US CUBA TRADE RELATIONS MAJOR ISSUES CUBAN ASSETS CONTROL REGULATIONS Issued on July 10 th 1963 under “Trading With the Enemy Act” These regulations affect: All US citizens and permanent residents All organizations and individuals in the US Subsidiaries and branches of US organizations all over the world

US CUBA TRADE RELATIONS MAJOR ISSUES Anyone engaging in transactions that involve property in the US and any property that is under US jurisdiction These regulations are overseen by the “Office of Foreign Assets Control” (OFAC) which is under the Treasury Department

US CUBA TRADE RELATIONS MAJOR ISSUES RESTRICTIONS It’s illegal for US citizens to spend money or receive gifts in Cuba unless you have a US government license that is issued by OFAC

RESTRICTIONS Cont. Financial Commercial Economic General license for travel Visits Ban on goods from Cuba Remittances Imports and exports

US CUBA TRADE RELATIONS MAJOR ISSUES President Obama recently directed the Secretaries of State, Commerce and Treasury to take steps to: “Lift all restrictions on transactions related to the travel of Cuban Americans to Cuba. Remove restrictions on remittances to family members in Cuba. Authorize U.S. telecommunications network providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the United States and Cuba. “

US CUBA TRADE RELATIONS MAJOR ISSUES “License U.S. telecommunications service providers to enter into roaming service agreements with Cuba's telecommunications service providers. License U.S. satellite radio and satellite television service providers to engage in transactions necessary to provide services to customers in Cuba. License persons subject to U.S. jurisdiction to activate and pay U.S. and third-country service providers for telecommunications, satellite radio and satellite television services provided to individuals in Cuba. Authorize the donation of certain consumer telecommunication devices without a license. Add certain humanitarian items to the list of items eligible for export through licensing exceptions.”

US CUBA TRADE RELATIONS CRITICAL ISSUE The critical issue here is the embargo itself. This has led to some unintended consequences such as: Humanitarian issues Castro is using the embargo as a scapegoat for the country’s problems

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Arguments Supporting the Embargo Originally was in response to Cuba’s expropriation of ~$1.8 billion of U.S.-owned property in late 1960s (according to the U.S. Foreign Claims Settlement Commission An important symbolic protest of Cuba’s lack of political, civil, and economic freedoms and disrespect for human rights 16

Arguments Supporting the Embargo Supporters of the U.S. embargo against Cuba have contributed nearly $11 million to members of Congress since 2004 The top five recipients: Miami's three Cuban-American Republican members of Congress, John McCain and New Jersey Democratic Sen. Robert Menendez “I will not apologize for the Cuban-American community practicing its constitutional, democratic right to support candidates who believe in freedom and democracy for the Cuban people over business and tourism interests." Mauricio Claver-Carone, Director of the U.S.-Cuba Democracy PAC 17

Arguments Against the Embargo Cost to the United States vs. Cost to Cuba U.S.: Estimates range from $1.2 - $4.84 billion/year in lost sales and exports Cuba: $685 million annually (Cuban government estimate) Black markets 18

Arguments Against the Embargo Cost to the United States vs. Cost to Cuba Beyond the economic costs, the blockade has deprived U.S. citizens of Cuba’s medical breakthroughs: First meningitis B vaccine Treatments for the eye disease retinitis pigmentosa A preservative for un-refrigerated milk CimaVax EGF: the first therapeutic vaccine for lung cancer. 19

Arguments Against the Embargo Popular Opinion: CBS News/NYTimes Poll: 67% Americans think the US should re-establish diplomatic and trade relations with Cuba (20% say should not and 13% unsure) The UN has voted 18 times (187 – 3 with 2 abstentions) to condemn the embargo including this past October The EU has also condemned the embargo 20

Arguments Against the Embargo Special Interests Business industry leaders Agriculture U.S. travel industry Religious and humanitarian leaders including the Vatican 21

Arguments Against the Embargo Benefits realized from the 2000 liberalization of the embargo (The Trade Sanctions Reform and Export Enhancement Act): Increases in commerce – total sales of farm products to Cuba have increased from near 0 to ~$700 million in 2008 Previously dead last, Cuba is now the 6 th largest Latin American customer for U.S. agricultural products 22

Arguments Against the Embargo Castro uses the embargo as a scapegoat for the economic and social welfare problems in Cuba 23

Is trade embargo with Cuba hurting U.S. interests? - From CNNPolitics.comFrom CNNPolitics.com 24 Video

"The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports." 25 Daniel Griswold, director of the Cato Institute's Center for Trade Policy Studies (June 2009)

Lift the Ban 26 Policy Proposal

Sources pdf pdf Robles, Francis. “U.N. condemns Cuba embargo by U.S.” 10/29/ Pepper, Margot. “The costs of the embargo.” Clark, Lesley. “Money talks: Report links donations, Cuba embargo support.” 11/16/ /16/2009 Gerz-Escandon, Jennifer. “End the US-Cuba embargo: It's a win-win.”

Sources ba/cuba.pdf ba/cuba.pdf cii/cuba.txt\ cii/cuba.txt\ factsheet.html?_r=1&pagewanted=all factsheet.html?_r=1&pagewanted=all factsheet.html?_r=2&pagewanted=all factsheet.html?_r=2&pagewanted=all