Jocelyn Mason

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US-Cuban Trade Relations

•   Jocelyn Mason
• Kelly McFarlane
• Anita Nyaga
• Intl Trade Relations
• December 9, 2009

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Timeline
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Timeline Cont
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Timeline Cont
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Embargo Restrictions

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

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Goals of the Embargo

• Government Reform
• Human rights improvements
• Limit trade opportunities

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US CUBA TRADE RELATIONSMAJOR ISSUES

• The US embargo against Cuba is a financial,
  economic and commercial sanction that has been in
  effect since 1960.
• The embargo makes it illegal for US corporations
  to do business with Cuba

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US CUBA TRADE RELATIONSMAJOR ISSUES

• CUBAN ASSETS CONTROL REGULATIONS
• Issued on July 10th 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

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US CUBA TRADE RELATIONSMAJOR 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

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US CUBA TRADE RELATIONSMAJOR ISSUES

• RESTRICTIONS
• Its illegal for US citizens to spend money or
  receive gifts in Cuba unless you have a US
  government license that is issued by OFAC

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RESTRICTIONS Cont.

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

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US CUBA TRADE RELATIONSMAJOR 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.

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US CUBA TRADE RELATIONSMAJOR 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.

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US CUBA TRADE RELATIONSCRITICAL 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 countrys problems

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The Debate
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Arguments Supporting the Embargo

• Originally was in response to Cubas
  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 Cubas lack of
  political, civil, and economic freedoms and
  disrespect for human rights

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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

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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

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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 Cubas 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.

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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

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Arguments Against the Embargo

• Special Interests
• Business industry leaders
• Agriculture
• U.S. travel industry
• Religious and humanitarian leaders including the
  Vatican

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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 6th largest
  Latin American customer for U.S. agricultural
  products

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Arguments Against the Embargo

• Castro uses the embargo as a scapegoat for the
  economic and social welfare problems in Cuba

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Video

• Is trade embargo with Cuba hurting U.S.
  interests?
• - From CNNPolitics.com

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"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."

• Daniel Griswold, director of the Cato Institute's
  Center for Trade Policy Studies (June 2009)

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Policy Proposal

• Lift the Ban

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Sources

• http//www.cubatrade.org/
• http//www.cubatrade.org/CubaExportStats.pdf
• http//www.bis.doc.gov/policiesandregulations/regi
  onalconsiderations/cuba.pdf
• http//www.aei.org/outlook/8739
• Robles, Francis. U.N. condemns Cuba embargo by
  U.S. http//www.mcclatchydc.com/251/story/77950.
  html . 10/29/2009
• Pepper, Margot. The costs of the embargo.
  http//www.dollarsandsense.org/archives/2009/0309p
  epper.html
• Clark, Lesley. Money talks Report links
  donations, Cuba embargo support.
  http//www.mcclatchydc.com/251/story/78884.html.
  11/16/2009
• Gerz-Escandon, Jennifer. End the US-Cuba
  embargo It's a win-win. http//www.csmonitor.com
  /2008/1009/p09s02-coop.html

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Sources

• http//www.pollingreport.com/cuba.htm
• http//www.treas.gov/offices/enforcement/ofac/prog
  rams/cuba/cuba.pdf
• http//www.treas.gov/offices/enforcement/ofac/prog
  rams/ascii/cuba.txt\
• http//www.nytimes.com/2009/04/13/us/politics/13cu
  ba-factsheet.html?_r1pagewantedall
• http//www.nytimes.com/2009/04/13/us/politics/13cu
  ba-factsheet.html?_r2pagewantedall