By Hobie Hunter
Few observers in the 1970s would have predicted that while the US would not have flying cars, it would still be levying an embargo against Cuba. The embargo has not accomplished its stated goal of pushing Cuba toward “democratization and greater respect for human rights. ” In fact, it has been a crutch for the Cuban government to justify mismanagement of the economy. With a pragmatic US administration and an evolving Cuban government, this time marks a unique opportunity to begin to mend relations between the two countries.
Understanding today’s embargo requires a bit of background. After a few failed attempts, Fidel Castro and his band of revolutionaries seized power from Fulgencio Batista’s dictatorial regime on January 1, 1959. Castro insisted for the first two years of his government that he was not a Communist, but US government officials remained suspicious. His continued nationalization of American assets in Cuba angered US officials. When the US cut its import quota of Cuban sugar, the USSR agreed to purchase the difference. The Cuban Missile Crisis further strained the US-Cuba relationship. During a decline in relations in 1962 and 1963, Cuban assets in the US were frozen and trade and travel relations were imposed. Even after the collapse of the Soviet Union and any identifiable threat to the United States, additional acts were passed in 1992, 1996, and 2000.
Although there are many reasons to lift the embargo, the most obvious is that the US would benefit economically. In an economy where growth increasingly comes from exports, Cuba represents an untapped market with great potential. The US loses anywhere from $1.2 billion to $4.8 billion each year from the blockade. On the other hand, the Cuban government estimates that the embargo costs Cuba $685 million per year. While both countries suffer losses, the embargo imposes greater costs on the US than on Cuba.
Cubans, desperate for supplies, stand to benefit from lifting the embargo. Indeed, it seems unethical to deny basic goods to a populace on the basis of their government when they have not clearly given their consent to be governed. Past shortages have included food, energy , toilet paper , condoms , potatoes, and even beer. It is not just basic commodities that are subject to scarcity. Small businessmen need access to supplies in order to grow their business. For example, the New York Times recently profiled a Cuban mechanic who desired a hydraulic elevator. Furthermore, while the embargo excludes medical supplies and equipment, it does make export of these items significantly more difficult. The US government approved $142 million in “health care items” for Cuba, but only $1.2 million reached the country. Some of this disparity, however, can be explained by third-party countries, such as China, offering lower prices for goods. Increased access to American trade could substantially improve quality of life for Cubans.
Additionally, eliminating the embargo would bolster America’s reputation internationally. Each year, the United Nations General Assembly votes on a resolution that calls for the repeal of the US’s embargo against Cuba. In its most recent iteration, 188 states voted yes and only two voted no—the United States and Israel. Furthermore, the embargo has alienated fellow American countries. Cuba has historically been excluded from meetings of the Organization of American States (OAS). In 2012, several countries, including Bolivia, Ecuador, Nicaragua, and some Caribbean countries threatened to boycott the conference if Cuba was not allowed to participate as an observer. In this case, the US was faced with a choice: accommodate Cuba or fail to engage with the rest of the hemisphere. Perhaps most importantly, the primary justification for the blockade, that the United States should not conduct trade with nations with poor respect for human rights, is transparently an excuse. The US currently trades with nations with much worse human rights records, including Tajikistan, Senegal, and Saudi Arabia.
Previously, lifting the embargo would have required immense amounts of political capital. However, such a decision is now politically feasible. Since 1999, each Gallup poll has found that a majority of Americans favor ending the embargo. In the most recent poll, 60% favored ending the embargo, while only 30% wanted to keep it. Traditionally, Cuban Americans have exerted an outsized influence on American policy by composing a substantial bloc of voters in a perennial swing state. However, in a 2014 Florida International University poll among Cuban Americans in Miami-Dade County, an astonishing 52% of respondents favored ending the embargo. Among Cuban-Americans ages 18-29, this figure rises to 62%. With increasing support for ending the embargo, politicians have more leeway to change US policy.
This particular moment represents a unique opportunity to improve Cuban relations. Shortly after his election, President Obama eased restriction on Cuban-Americans’ ability to travel to Cuba as well as to send remittances. This does not go as far as it could or should, but represents stronger action than the Bush administration took. On the other side of the Straits of Florida, Raúl Castro’s government has taken steps to liberalize the economy. Since new economic reforms were introduced in 2011, over 400,000 Cubans have registered to become entrepreneurs. In 2014, the National Assembly voted unanimously to pass a bill designed to attract foreign investment. The bill cuts the profits tax from 30% to 15% and exempts investors from paying it for eight years for companies that partner with the state or Cuban companies. Furthermore, the Cuban government recently constructed a deepwater port in Mariel, surrounded by a special economic zone. The port is being constructed with Brazilian financing and will be managed by a Singaporean port operator. The United States misses out if we do not trade with Cuba when other states do.
Much of the change in circumstances involves oil. Cuba and Venezuela have pursued a mutually beneficial partnership in which Cuba supplies highly trained doctors in exchange for heavily subsidized Venezuelan oil. Trade with Venezuela accounts for 20% of Cuba’s GDP. However, with the Venezuelan economy falling, the government may be forced to demand market prices for oil. The US, on the other hand, recently surpassed Saudi Arabia to become the world’s largest oil producer. This represents a momentous opportunity for beneficial US-Cuba trade. If the embargo is lifted, the US could prevent Cuba from cozying up to Russia a second time. In addition, lifting the embargo would bolster lines of communication should a disaster occur. As Cuba expands drilling in the Florida Straits, the chances of a spill increase. US tankers cannot enter Cuban waters, and any recovered oil is Cuban property and thus cannot enter the United States. A resolution of this jumbled situation is necessary to mitigate environmental catastrophe.
In short, the US embargo against Cuba has failed to produce significant change in Cuba’s political structure. However, due to extenuating circumstances, both the US and Cuba should be more amenable to strike a deal. Without an embargo, Cuba and the US can take advantage of their proximity and ties, particularly the Cuban-American community. Mending this rift would result in greater hemispheric cooperation and increased prosperity through trade. It is time to look past swing voters in Hialeah, and towards the future.
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