Obama is opening up trade with Cuba
Obama is opening up trade with Cuba
Michael Weissenstein, Associated Press
The Obama administration is loosening the U.S. trade embargo on Cuba
with a new round of regulations allowing American companies to sell to
Cuba on credit and export a potentially wide range of products to the
Cuban government for the first time, officials said Tuesday.
The changes are President Barack Obama’s third attempt to spur U.S.-Cuba
commerce despite an embargo that still prohibits most forms of trade
with the island.
U.S. travel to Cuba has exploded since Obama and Cuban President Raul
Castro declared detente in 2014. But U.S. hopes of building wider trade
between American businesses and Cuba’s private sector have been largely
frustrated by Congressional reluctance to end the embargo itself and by
the island’s labyrinthine restrictions on imports, exports and private
Obama says he hopes to visit Cuba before he leaves office but a trip
would depend on the progress being made in relations between the two
countries. Tuesday’s move appears designed to jumpstart commerce between
the two countries and remove some of Cuba’s biggest excuses for not
opening its economy to trade with the U.S.
“Just as the United States is doing its part to remove impediments that
have been holding Cubans back, we urge the Cuban government to make it
easier for its citizens to start businesses, engage in trade, and access
information online,” National Security Council spokesman Ned Price said.
Among a host of other measures, the new regulations allow U.S. firms to
offer Cuban buyers credit on sales of non-agricultural goods, addressing
a longstanding Cuban complaint about a ban on credit.
The vast majority of Obama’s new regulations have been aimed at spurring
U.S. trade with Cuban entrepreneurs instead of with the state-run firms
that dominate the economy. The Cuban government says that U.S. focus on
private business is partly responsible for the island not opening its
economy in response to the U.S. loosening of the embargo.
The U.S. Commerce Department said Tuesday that it would now allow U.S.
exports to Cuban government agencies in cases where it believed the
Cuban people stood to benefit. It cited agriculture, historic
preservation, education, food processing and public health and
infrastructure as government-controlled sectors that it would not allow
to receive goods from the U.S. on a case-by-case basis, potentially
opening up a huge new field of commerce between U.S. business and the
“You would expect that this would open up a lot of areas where there
should be enhanced trade,” said James Williams, head of the anti-embargo
U.S. group Engage Cuba. He said that while Obama’s initial exceptions to
the embargo were criticized for not reflecting a deep understanding of
Cuba, the new regulations were much more attuned to the peculiarities of
Cuba’s state-controlled economy.
In this July 20, 2015, file photo, Javier Yanez looks out from his
balcony where he hung a U.S. and a Cuban national flag to celebrate the
restored full diplomatic relations between Cuba and the Unites States,
in Old Havana.
Cuban officials issued no immediate comment on the changes and state
media made only brief mention of them in the first hours after the U.S.
Anti-Castro figures in the U.S. have long argued against Obama’s opening
with Cuba, saying it empowers the state rather than the Cuban people and
Tuesday’s announcement gave them ammunition.
“These regulations are more proof that the Obama Administration’s intent
has never been to empower the Cuban people but rather to empower the
Cuban government’s monopolies and state-run enterprises,” said
Republican presidential candidate Marco Rubio, a Cuban-American U.S.
senator from Florida.
The new measures expand the different instances in which Americans can
travel to Cuba without a specific permit, including filming movies and
television programs, conducting market research and commercial marketing
and organizing professional meetings and sports events.
While the embargo prohibits pure tourism, Obama’s changes have largely
turned the ban into a toothless honor system requiring travelers to
self-report the purported legal reason for their travel to their airline
or travel agent and then not engage in tourism on the island.
The new changes make the tourism ban even harder to enforce by expanding
the number of credible reasons that an American could be in Cuba. The
new measures also contain a number of technical changes designed to
allow regularly scheduled flights between the U.S. and Cuba, a
potentially massive change agreed upon by the two countries late last year.
Travelers now must go through third countries or take inconvenient and
expensive charter flights. Regularly scheduled flights could bring
hundreds of thousands more American travelers to Cuba every year.
Source: Obama is opening up trade with Cuba – Business Insider –