Biden Presidency Won’t Return to Obama Era Cuba Relations

Despite the potential in agricultural trade

US presidential candidate Joe Biden and Cuban leaders Raul Castro and Miguel Diaz Canel. File photos: cubaenmiami.com

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.


15 thoughts on “Biden Presidency Won’t Return to Obama Era Cuba Relations

  • 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.

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