The Cuba Embargo: When Will it Be Lifted? - Global Trade Magazine
  August 17th, 2016 | Written by

The Cuba Embargo: When Will it Be Lifted?

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  • The U.S. embargo against Cuba is still being enforced.
  • Signs of progress towards lifting the U.S. embargo against Cuba are scarce.
  • Florida Senator Marco Rubio: U.S. policy shift on Cuba is “based on an illusion.”

In December of 2014, President Obama announced that it was time to “cut loose the shackles of the past,” inaugurating a fundamental change in relations between the United States and Cuba.

For more than 50 years, there had been few signs of engagement between the two nations, resulting in the only place left on the planet where armistice had yet to be declared in the Cold War. But after 18 months of secret negotiations, the president ordered the restoration of full diplomatic relations and opened a U.S. embassy in Havana.

The final and most significant step in this new chapter, Obama stated, would be the lifting of the trade embargo, then 54 years old. That embargo is now 56 years old and still being enforced.

Those looking for signs of progress are likely to be disappointed. Obviously anything this significant is not going to get done until after the presidential election in November, And if the Republicans hold onto the Senate, it might not get done at all. Florida Senator Marco Rubio described the policy shift as “based on an illusion, on a lie…that more commerce and access to money and goods will translate to political freedom for the Cuban people.”

Certainly some good has emerged from what has transpired thus far. Alan P. Gross, an American government contractor serving a 15-year stretch in a Cuban prison, is now back home safely, exchanged for three imprisoned Cuban spies. Restrictions on travel and banking have been eased, and Cuba has allowed increased internet access.

But the embargo stands, despite the President’s call for an “honest and serious debate.” And in this case Obama’s pen and phone will not be sufficient. That discussion must, by law, take place in Congress, and require a congressional act before moving forward.

Reimbursement and Reparations

Two rounds of talks have been held on the embargo, the most recent last month. Little progress was reported. Both sides appear to have long memories, and are unwilling to move forward until past points of contention are resolved.

For several U.S. companies, that means compensation for the land, ranches, factories, and bank accounts that were seized in the 1959 Cuban Revolution. These property claims must be settled to the satisfaction of those affected, as stipulated in the 1996 Helms-Burton Act. Estimates place their worth at approximately $1.9 billion at the time Fidel Castro rose to power, an amount that has climbed to more than $8 billion after a half-century of interest. Additional judicial claims against the Cuban government topping $2 billion must also be settled.

At the same time, Cuba is demanding $121 billion for economic damage and $181 billion in human damage resulting from the embargo.

So Cuba gets a bill for about 13 percent of its annual gross domestic product, and the U.S. is handed a much larger bill it has no intention of paying. That does not bode well for future negotiations. And these bills are backed by long standing legal decisions established in both nations, where a statute of limitations does not apply. That makes it even more difficult to negotiate a more moderate settlement. Plus, if America ever pays even a portion of what can only be characterized as reparations, which may open a door to other countries (such as Iraq) seeking similar payouts.

The Right Thing to Do?

While polls show six in 10 Americans in favor of full normalization of U.S.-Cuban relations, the question for many remains not whether the embargo will be lifted, but whether it should be, at least without some additional progress by Cuba in the area of human rights and a free press, as well as a better quality of life for its citizens.

Proponents of closer relations claim that “contagious capitalism” will be a rising tide that lifts all boats. But that tide would have to be a tsunami to raise the standard of living when most Cubans earn about $20 a month. Government housing looks exactly like what you’d expect less than 20 bucks a month to buy, and the government still provisions ration stamps for the purchase of goods.

President Obama believes change is “inevitable,” but many hurdles remain. Teh Cubans show no eagerness to settle old disputes on U.S. terms. And by the time his rule ends, whenever that is, there may be an equally intransigent occupant in the White House.

In the meantime, you’ll still have to seek alternate channels to get those Cuban cigars.


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