Biden Presidency Shouldn’t Return to Obama Era Cuba Relations
Despite the potential in agricultural trade
By R. O. Niederstrasser-Hernández and James Gordy*
HAVANA TIMES – With the deterioration of U.S.-Cuba relations during the Trump administration, much of the agricultural initiatives developed during Obama’s Cuban Thaw were reversed, new restrictions were introduced, and the economic embargo was strengthened.
Early in his presidency, Trump released a statement extending the “National Emergency with Respect to Cuba” declaration arguing that mass migration and the unauthorized entry of Cuban vessels into the United States endangers national security.
Soon after, Title III of the Helms-Burton Act was activated for the first time. One of the law’s principal objectives was to discourage foreign businesses from doing business in Cuba by allowing American property claimants to sue them in United States courts for trafficking in confiscated property.
In this way, Title III cleared the way for lawsuits against foreign companies active in Cuba, especially those that were benefiting from the expropriation of US-owned companies and private property after the Cuban Revolution. Since Bill Clinton’s term in office, every United States president suspended this provision for fear of offending allies and complicating relations with Cuba.
As the bilateral political climate continues to be strained, economic opportunities are eroding. Export promotion and capacity building programs in Cuba, developed during the normalization of relations during the Obama administration, are now severely limited in the capacity for further advancement.
A Biden presidency would have a different reality in negotiating with Havana than Obama had in 2014. For example, sanctions on Cuba over Venezuelan oil exports to the island were increased in 2019 as punishment for its continued support of Venezuelan leader Nicolás Maduro whom Washington considers to be a Cuban puppet.
Another important issue are the human rights in Cuba. Human rights violations on the island are one of the primary concerns that have shaped US policy towards the island nation. Despite the political opening, human rights continue to be severely restricted.
A third emerging problem that has caused frictions between the two countries are the incidents of the “Havana Syndrome.”In September of 2017, the State Department announced it was withdrawing all non-essential personnel from the United States Embassy in Havana. It warned American citizens against traveling to Cuba due to reports that American diplomatic personnel on the island had suffered unusual, inexplicable health problems that dated back to the end of 2016.
Around twenty-six personnel were diagnosed with minor traumatic brain injuries and permanent hearing loss, as well as symptoms such as loss of balance, severe headache, perceptual disorders, and brain swelling. As of May 8th, 2020, a definitive conclusion on the case has not yet been determined.
THE POTENTIAL OF TRADE NORMALIZATION
If the Cuban government opens the economy for foreign trade and investment, an expansion of growth and diversification into other products could be expected in important sectors such as tourism, restaurants, food manufacturing, and livestock production. In addition, aliberalized economic management model would increase productivity, diversification, and strengthen the independent sector.
The 2019 Cuban constitution recognized private businesses, foreign investment, and non-farm cooperatives as legitimate and important economic actors in the economy. But overall, the Cuban economic laws and climate are far from friendly for large-scale foreign investment or trade.
While these sectors are now recognized, they remain regulated and subordinated to the Cuban government, which controls the economy. Therefore, there is no perception of the market’s real and objective existence in terms of the “production-distribution-exchange-consumption cycle, and the necessary interrelationship between macro and microeconomics.”[1]
The command-economy model pursued for many decades only created inefficiencies and hyper centralization negatively affecting wages. By engaging in a liberalized approach towards a mixed economy, state ownership of the land should be transferred to the agricultural growers in a step to give them more autonomy. They also would be given greater decision power on the aspects of what they grow, whom to hire, whom they sell it to, and at what prices.[2] In addition, it could also lead to a reduction in the black market in Cuba.
Another important aspect is the democratization of the political system will free the state’s economic monopoly. The communist system in Cuba has gone through some moderate waves of political reforms. The reforms after Fidel Castro’s death, for example, decentralized power from the president towards the communist party. While many aspects of the state bureaucracy have been pushed out towards new positions such as primer minister and governors, these reforms still grant the Cuban Communist Party (PCC) the monopoly of power within the Cuban political and economic system.
Democratization will ensure the expansion of freedoms and human rights of the Cuban population. In economic terms, it will translate into a loss of control mechanisms over the population and, instead, a focus towards markets. Damaging protective measures of the Cuban government into the economy could be prevented, such as the reversal of the sweeping agricultural reforms of 2010 that loosened regulations favoring market forces and prices.
If these changes were to happen in Cuba, U.S. trade restrictions that are harming agricultural exports to Cuba, would fall imminently. The United States has restricted its export markets for political reasons, abandoning a 2 billion USD market in which it could reasonably expect to capture an estimated 959 million USD in sales.[3]
Cuba currently imports products like rice at higher prices from countries like Vietnam, when the United States would have the natural comparative advantage due to proximity. Restrictions that prevent these imports including prohibiting credit and shipping restrictions raise the price of US goods above the prices of competitors.
The decision to lift trade restrictions should not be dependent upon decisions made within Cuba. Through the codification of the embargo in Helms-Burton, the United States has constricted its ability to determine its foreign policy and trade policy, instead basing such policy solely on domestic policy in Cuba. Eliminating restrictions based in legislation will introduce more flexibility to US trade policy with Cuba and allow the United States to more effectively engage with Cuba.
In addition, investing in export promotion programs will increase market capture and open trade in new products. Despite the possibilities of a hugely expanded agricultural trade, the United States will not be able to capture its full potential in market share unless it operates the usual export promotion programs.
For programs to consider in Cuba, US policymakers should look towards programs currently in place in the Dominican Republic including chambers of commerce and trade representatives, as well as offering services for US exporters including trade counseling, market intelligence reports, and commercial diplomacy programs. These programs are key parts of the United States’ trade relationships throughout the world, there is no reason not to apply these programs to the Cuban market given the potential growth identified.
Lastly, an important aspect is to take steps to ameliorate the negative effects of sanctions. Impacts of sanctions remain a major factor even after sanctions are lifted. Sanctions reduce foreign direct investment, joint ventures, and interest in participating in trade between two countries, with effects lasting after sanctions are lifted due to uncertainty surrounding the economic relationships. Given the history of US-Cuba trade with repeated cycles of easing and tightening of restrictions on trade, policymakers should make clear that the opened space for agricultural trade between the two countries will not just be closed again.
*Havana Times reader guest post.
[1] Jolly, Curtis M., Thomson, Henry: “Free trade with Cuba: The effects of a lifted embargo in Alabama,” Southern Economics and Business Journal (2008), http://webhome.auburn.edu/~thomph1/simcuba.pdf
[2] Ibid.
[3] Gordy, James and Niederstrasser-Hernández, R. O.: “U.S.-Cuba Agricultural Trade: How Trade Normalization will affect Exports and Investment,” Walsh School of Foreign Service, Georgetown University, May 2020.
There is no solution to the Cuban people’s dire lives other than regime change. Anything less ends up like China, Russia, Iran, etc. That’s why those klepto autocracies support their fellow autocrats in Cuba.
Unfortunately, when countries like Spain for financial reasons, or Mexico to pretend they are socialists and thumb their noses at the Gringos, continue to prop the regime, international cooperation for a relatively peaceful change is impossible. The alternative is a violent overthrow. Cuba, like the rest of Latin America, is at the bottom of the list of any US administration priorities, save perhaps Kennedy and Reagan’s. Why? Because real US policy is dictated by finance and trade. This is not a Marxist screed, but based on history. It would take a mass uprising in Cuba and the regime’s predictable massacres to perhaps potentially move US public opinion to pressure a US led multi national military intervention. Given the state of the world. COVID, economic distress, there is little prospect for that. That is why whether it is Trump or Biden will have little effect in making real changes in Cuba. The Democrats have a propensity for wishful thinking, particularly when the “Sandalista” left sympathizers dominate policy. The GOP mirror counterpart ideologues of anything progressive must be Marxists also are unhelpful.
Maria clarifies that Cuba’s problems are too numerous to list. She is also correct in saying that most tourists do not see the reality of those problem’s. Political incompetence reigns. Does life for Cubans have to deteriorate even further? It appears so.
Biden’s policy towards Cuba has yet to be defined, but will be well down the list of his priorities.
Looking at your comments give me conflicting feelings. I’m Cuban, I left when I was 23 years old, I’ve been in the States for 28 years. I voted democrat every year since I became a US citizen, because I liked the soft approach of the democratic party towards Cuba. Now I’m not sure anymore. Any economic progress in Cuba will only serve to strengthen the communist party, it will provide the long-awaited riches to the government crapula?(not sure if it’s the right word) They already sucked dry Venezuela, they are praying for Biden to win, and deep down I would like that too, it’ll mean my family is not going to starve any longer. But at what cost? Cuban people are suffering, the country’s health system is a disaster, there is merely food in the stores, children can only have milk until the age of 7. They starved the country for 3 months, hiding the food so they could sell it now for dollars, however every cuban citizen is paid in cuban pesos, one dollar is equivalent to 25 pesos. A doctor is paid 500 pesos a month, so they have to choose between buying cooking oil or laundry detergent. Some of them go to serve in other countries so they can get paid in dollars and buy toiletries for their family, clothing and shoes for their kids; according to doctors that I’ve met, their pay was 200 dollars a month for the duration of the mission, 2 years. I apologize for going out of the subject and ranting a little but Cuba is not what the American people see when they travel to Cuba. Neighborhoods are falling apart, killing people that live in those buildings (ruins) because they rather sleep inside than the sidewalk. Even though my 72 year old mother is bedridden with cancer, my mentally and physically disabled brother is in critical condition also at home and my 78 year old father is trying to keep everything afloat, I’m almost convinced that Biden’s policy towards Cuba is not helpful at all. As much as I dislike to say this, it hurts me to admit that Trump’s policy is shaking down the communist government. Cuba was destroyed by the Castro’s, we were a country with a great farming system, now we don’t even have our own sugar, or coffee. The wide variety of tropical fruits that grew in every corner have disappeared. I could go on but I don’t want to bore you. I’m still confused but I have untill November to figure it out.
Gosh Nick, even you and I are occasionally in agreement. Curt is but a poor stand-in for Elio, although sharing blind ignorance of the causes of Cuba’s ills.
You are exactly correct about the need for Cuba to address food production. I would take a few years to achieve self-sufficiency, but that ought to be the objective.
However policy requires implementation, and the system in place is incapable of achieving that. Just as it would take experienced industrial management to produce say cars in Cuba, the same applies to agriculture.
it will be interesting to observe who is correct in anticipating Biden’s priorities.
Curt does not explain how to change relationships between countries without discussion. Blind stupidity when political opportunity occurs is – as demonstrated in March 2016.
Having visited Cuba every year since 1996
I have had the opportunity to deal with the
Cuban government on one occasion as a result of having the aid of the Canadian
Ambassador to Cuba
That went nowhere. That aside , I made
Several friends in Havana and continue
Those friendships to this day
Over several years I have had a number
Of requests to aid people who wanted
To leave Cuba and travel to USA or
Canada. I was not in a position to do so
As much as I wanted to because of
What was involved in such an undertaking.
Having become aware of the problems
of the Cuban people through my encounters with them over the years
I have always been wondering what it
would take to do what is being tried
in Lebanon and Argentina. Namely
removing the Communist Party of
Castro. I invite your comments.
various
Upon receiving your comments I would
be in favor of making a monthly
contribution to assist in your continuing
Fight for the truth as you see it.
Buen suerte
No I made no reference to removing
the present Cuban government if I
Remember correctly.
Having visited Cuba every year since 1996
I have had the opportunity to deal with the
Cuban government on one occasion as a result of having the aid of the Canadian
Ambassador to Cuba
That went nowhere. That aside , I made
Several friends in Havana and continue
Those friendships to this day
Over several years I have had a number
Of requests to aid people who wanted
To leave Cuba and travel to USA or
Canada. I was not in a position to do so
As much as I wanted to because of
What was involved in such an undertaking.
Having become aware of the problems
of the Cuban people through my encounters with them over the years
I have always been wondering what it
would take to do what is being tried
in Lebanon and Argentina. Namely
removing the Communist Party of
Castro. I invite your comments.
various
Upon receiving your comments I would
be in favor of making a monthly
contribution to assist in your continuing
Fight for the truth as you see it.
Buen suerte
I would also be optimistic that Joe Biden would do as he suggests in the quote kindly provided by John McAuliff.
I can see no reason for him to do otherwise. Although as Mr MacD states the list of trump’s blunders is a long one so where would Cuba be on Joe Biden’s priorities?
What Cuba needs to do is work toward food self sufficiency. This should be the number one priority. It requires a pretty big change of policy. The Covid situation shines even more light on the requirement to achieve this.
If this is achieved, Cuba would not so much subject to the vagaries of whether or not there is a right wing nut job in The White House.
trump may be the worst but he ain’t the first and quite possibly won’t be the last.
Moses, in our past exchanges you regularly said President Obama should not and would not do what he did.
Why do you know better what President Biden will do? (See quote below)
Florida is in play, but the game has moved even further than when Obama won by promising opportunities for engagement.
We both may be prone to wishful thinking. However, my thoughts look to the positive while yours are always negative.
From Americas Quarterly:
Q9. WHAT IS YOUR VISION FOR RELATIONS BETWEEN THE U.S. AND CUBA?
“Biden: Americans – and especially Cuban-Americans – can be our best ambassadors for freedom in Cuba. Therefore, as president, I will promptly reverse the failed Trump policies that have inflicted harm on the Cuban people and done nothing to advance democracy and human rights.”
https://www.americasquarterly.org/content/2020-candidates-10-questions-latin-america-policy
You are too chicken to use your real name. The Cold War ended almost 40 years ago. You need mental help to get back to reality.
So Cuba has to kiss the US”s ass in order to have sanctions removed. Hopefully the persons who wrote this article are wrong. Cuba is a sovereign country and the main problem is the US wants Cuba to be a slave and do things to their standards. Cuba was making much more progress and the Cuban people were much happier after the Obama opening. As far as human rights go, the Cuban government has always toughen up during presidential administrations that are hostile to Cuba. We tolerate much more from other countries that have worse human rights than Cuba. Under the Trump administration, hardliners who are running Cuba still think of the archaic idea that if you starve the Cuban people by putting draconian sanctions against them, that they will rise up and overthrow the Cuban government. I am optimistic that Biden will reinstate Obama’s Cuba policy.
First of all, I agree with Eclectic. Why should the US attempt to play nice with Cuba again? Obama tried and the Castros spit in his face. As Carlyle correctly affirmed, the US farmer is already free rice to sell to Cuba. The problem is that Cuba has to buy food from international sellers on credit and, well, they don’t have any. Second, the State of Florida is in play for November 3 and if Biden wants to keep it competitive he will need to pacify the ever-shrinking but still powerful Cuban “mafia” and make no concessions to the Castro dictatorship without justification. Finally, in the four years since Obama visited Cuba, Cuba has only become weaker economically and politically. Their patron saint Venezuela is running on fumes these days so if ever the argument could be made to keep the US foot on the gas, now is that time. I see Biden letting the status quo run its course, at least for the first two years of his administration.
Re: Four Levels of Opportunity
Opportunity for whom? The suggestions would be a great help to Cuba, but have very little benefit to the U.S. Why would Biden or any other U.S. politician follow those suggestions.
Until Cuba denounces communism and converts to a market economy, the only changes I would expect will be inconsequential. Maybe Joe and Raul could go to a baseball game together?
The American farmer already feeds the Cuban foe and it was only Donald Trump’s embargoes that caused them to cease feeding Chinese foes.
I think that both Stephen and John McAuliff are optimistic. Obama made his initial move towards some form of reconciliation in 2014, then took a bold step by visiting Cuba in March, 2016 and endeavoring to make further improvements in the relationship – only to be snubbed directly by Fidel Castro within a week and indirectly by Raul Castro through Bruno Rodriguez one day later.
Joe Biden was Obama’s Vice President, and is consequently unlikely to present opportunity for a further political snub. There is a long list of US international policies in need of repair following Trump’s successive blunders, requiring Biden’s urgent attention, before Cuba which is away down on the list of priorities, becomes a consideration – and if by chance Florida votes Democratic, an even longer period.
I was interested in the optimism of John McAuliff’s proposed “levels of opportunity” but think that in reality, they are but a pipe dream.
From the headline and initial paragraphs this appeared to be an article skeptical of how much Biden could restore Obama policies toward Cuba. By the end, it reads more like a case for expansion of economic relations.
Biden has four levels of opportunity:
1) Immediately upon taking office, announced right after election: restore Obama policies on individual and group travel licenses, cruises, flights to regional cities, remittances, import of agricultural products, specific types of investments and banking, shipping, facilitation of visas for educational and cultural exchange. (Depending on US success in controlling Covid-19, this could open the winter and spring seasons to the travel sector.)
2) Within the first year: fully staff the embassy, reopen consular authority, restore visas for immigration and family reunion visits; support legislation to totally end restrictions on travel, agricultural and medical sales, and collaboration in medicine and science as well as on related financial transactions. Assure that Cubans granted visas to visit or study in the US are ineligible to claim status under the Cuban Adjustment Act.
3) Within the first two years: negotiate a comprehensive political solution with Cuba and Venezuela to end all economic sanctions and embargoes; open consulates in at least one Cuban and one US city; open ferry service between US and Cuban ports.; fund wide ranging cultural, educational, professional and business exchanges.
4) Within the first term: initiate a process to restore full sovereignty to Cuba of the Guantanamo base and withdrawal of all US military forces
With these steps Biden can benefit the well being of the people of both countries, give Cuba space to strengthen its reforms, and open an historic new chapter of US relations with the hemisphere.
I believe most posters would agree a Biden Presidency won’t return to Obama era Cuba relations.
For the reasons highlighted in the article and the most obvious: a totalitarian, autocratic state does not give up unilateral power and total country control that easily. Yes, there has been a bit of propagandized tinkering around the Cuban economic edges: an additional hotel project over here, a few essential imports of rice over there, all to stem the tide of inevitable, eventual economic collapse.
The United States government will not capitulate its Monroe Doctrine of total control of the economic Western hemisphere just because one insignificant island does not want to play by its rules. The United States will continue to try and engage with the communist island but by its own rules and regulations. On the other hand, the Cuban elite have come this far with their Revolution, therefore will not relent; hence, the stalemate will continue.
In capitalist America, U.S.A. farmers wanting to export their products to Cuba will probably be able to do so and the Cubans, provided they have the funds to pay, will accept the trade. The Americans using the appropriate language will be calling this Freedom for Funds or some sort of language that obfuscates the true nature of the transaction. After all, the American farmer does not want to be portrayed as feeding a foe.
On the other end, the Cuban propaganda Ministry will announce how well the communist system functions under new leadership at the top. So, now there is a win-win situation for both entities though they utterly despise one another. That is how business operates. Lucky, North Korea is not in the Western hemisphere of American influence otherwise free trade between the two so called enemy countries would trump (pun unintended) any form of mutual economic hatred.
Who can predict what will occur in November 2020 in the United States election, but if Biden does enter the White House those around him more than likely will be more sympathetic to the Cuban situation than the present Republicans. The Democrats perhaps will deal a softer hand in its relations with the island.
Unfortunately, in a totalitarian state that softening by American economic influence will not easily trickle down to the ordinary Cuban who must bear the consequences of all American political changes whether good (the Obama opening), or bad (the Trump term).