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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 by the United States on February 7, 1962. As of 2005, the embargo is still in effect, making it one of the most enduring trade embargoes in modern history. It remains an extremely controversial issue worldwide.
Before the embargo
The United States and Cuba have close geographic, economic and historical ties. Cuba was a Spanish colony for 400 years until December 1898, when Spain ceded control of Cuba to the U.S. after it was defeated in the Spanish-American War. The U.S. subsequently granted Cuba its independence in 1902. There was substantial U.S. investment in Cuban production of sugar and tobacco for export, and in tourism, and preferential access for Cuban imports to the United States.
The U.S. government initially supported the Cuban Revolution, formally recognizing the new government of Fidel Castro on January 7, 1959, after Batista fled on January 1. However, relations rapidly deteriorated when the new Cuban government passed the first Agrarian Reform Law to begin expropriation of large-scale (largely American-owned) land holdings on May 17, 1959. The compensation offered (based on 20-year bonds at 4.5% interest for the tax-assessed value) was seen as inadequate, and was rejected by American interests.
A U.S. arms embargo had been in force since armed conflict broke out in Cuba in 1958. In response to the nationalizations and expropriations, the U.S. reduced the Cuban import quota of sugar by 700,000 tons in July 1960; the Soviet Union responded by agreeing to purchase the sugar instead, and further Cuban expropriations followed. 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 again stepped in to provide economic subsidies to Cuba.
As a further 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 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.) Following the Bay of Pigs affair, 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 certain hostile actions by the Cuban government" under which Cuban assets in the U.S. were frozen and the existing restrictions were consolidated.
The ban on U.S. citizens traveling to Cuba lapsed on March 19, 1979; the ban was renewable every six months, but President Jimmy Carter did not renew it and the ban on spending U.S. dollars in Cuba was lifted shortly afterwards. President Ronald Reagan reinstated the travel ban on April 19, 1982.
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). While the U.S. has sought to normalize trade relations with other Communist states, such as the People's Republic of China and Vietnam, there is a large lobby among the largely conservative Cuban-American constituency, particularly Cuban exiles living in Florida. Because Florida is a politically important state, it is difficult for either the Republican Party or the Democratic Party to substantially change American policy towards Cuba. However, the Republican Party has generally been in favor of a more hardline approach, as evidenced by the Helms-Burton Act of 1996.
In response to pressure by 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 untapped Cuban economic market, 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 traveling 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, conscious of Florida's anti-Castro voters, has taken a hard-line stance and threatened to veto the bill. Faced with a veto threat, each year Congress has dropped its attempt to lift the travel ban.
Effects of the embargo
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 licencing). As of 2004, 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 percent of Cuba's exports and 70 percent 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 $70 billion, including loss of export earnings, additional import costs, limiting the growth of the Cuban economy, and social damage. 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.
One of the more visible manifestations of the embargo is the almost complete absence of modern automobiles on the streets of Havana. Instead, Cubans have made a virtue out of the necessity of keeping pre-1960 American automobiles in running order, making Cuba a haven for 1950s vintage American cars. Also, due to the general slowing of the economy in Cuba, the country has fostered many artisans as opposed to industrialists, creating a culture of musicians, artists and poets that is well respected around the world.
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 American ones. 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 Europe instead of the U.S. at full market value made these goods more expensive due to transportation costs and thus made it more difficult for Cuba to pay for vital imports. Despite the difficulties created by the embargo in the 1990s, Cuba defied predictions that without Soviet support it would quickly collapse.
Official US exports to Cuba in 1999 totalled $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.
It is estimated that each year some 80,000 Americans visit Cuba, including over 3,000 business visits. As much as $1 billion per year is remitted to Cuba by Cuban Americans. 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 thought to be 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 illicitly obtained Cuban brandy and cigars. Although the embargo itself may be partially responsible for the notion, it is commonly accepted by many Americans that the "best" cigars are Cuban cigars (although many cigar experts believe Cuban cigar quality has declined to the point where they are no longer the best in the world. Contributing to this was the decline in soil conditions from the lack of quality fertilizer due to the embargo; the smuggling of Cuban tobacco seeds to neighboring countries whose climatic conditions are similar to Cuba's; and Cuban growers / producers leaving the island and bringing their expertise abroad.)
Though the leadership of the Cuban-American community is the main proponent of continuing the embargo, the policy has come to have a great effect on Cuban-American 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 Cuban-American leadership 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 Castro supporting and participating in initiatives such as the Bay of Pigs invasion. More recent immigrants from Cuba are more likely to have left the island due to economic rather than political considerations and are more likely to have family remaining on the island who they wish to assist economically.
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. 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 on American electoral considerations.
Left-wing and more radical critics of U.S. policy toward Cuba, including Noam Chomsky, argue that the embargo was put in place to prevent Castro's socialist program from succeeding and serving as a model for other Latin American countries.
Some conservative critics argue that the embargo actually helps Castro more than it hurts him by giving him an issue which he has been able to use for 40 years to rally Cubans around his government and a scapegoat he can use to blame for all of Cuba's problems.
American business leaders and free marketers in particular argue that the embargo gives a commercial advantage to foreign competitors of American business by giving them a market which they can exploit without having to compete with Americans and that this gives foreign businesses a "head start" in Cuba's eventual post-Communist market.
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 2004 vote, only the U.S., Israel, the Marshall Islands, and Palau voted against the resolution (with Micronesia abstaining).
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-American corporations and non-American 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). 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:
- a move to a WTO dispute settlement panel;
- changes in the procedures governing entry by representatives of US companies to EU Member States;
- the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
- the establishment of a watch list of US companies filing Title III actions.
Religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic hardships the embargo imposes on the poor of Cuba. 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 an "historic mistake" while visiting the island on January 25, 2004. American 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 Rev. 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."
- History of Cuba
- Economy of Cuba
- Opposition to Castro
- 2001 Report by the Cato Institute
- 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 - "What You Need To Know About The U.S. Embargo" (PDF, 86K)
- USITC February 2001 report on the economic impact of the embargo (PDF, 3.8M)
- What Castro wants Time letter about the Cuban embargo
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