Political Science 472
Spring Term 1998
Due: June 17,1998
What is United States Policy-makers policy towards Cuba?
Why are the departments and groups of the United States considering lifting provisions of the Helms-Burton Act, even though the Clinton Administration and Congress has not achieved its policy goals?
Future Policy Goals for United States Policy-makers towards Cuba
On May 18, 1998, while in London, President Clinton released a fact sheet on the understanding reached between the United Sates Policy-makers and the European Union on the subject of illegally expropriated property. The fact sheet informs readers that:
"The United States and the European Union have reached an Understanding that will inhibit and deter investments in illegally expropriated property. The Understanding will strengthen the protection of property rights around the world. It contains special measures to deal with countries that have 'an established record of repeated expropriation in contravention of international law,' of which Cuba is a notable example. The Understanding was developed as a result of negotiations following enactment of the Libertad (Helms-Burton) Act."1
According to title three of the Helms-Burton Act, President Clinton may wave permission for former owners of contested property to sue the foreign companies for compensation American Courts. Another provision of the Helms-Burton Act, title four, that was also under negotiations between the European Union and the United States, requires the government to deny visas to executives of foreign companies that form the disputed property. Under this provision, President Clinton can impose " 'secondary boycott'-that is they direct the United States to apply sanctions against foreign companies doing business in the three countries."2 United States businesses are banned from trading with Cuba under other laws under the United States Law Codes. Title four of the Helms-Burton Act is a provision that the Clinton Administration is seeking to amend, to permit President Clinton to waive sanctions indefinitely for the European Union nations. In exchange, the European Union has made a commitment to promoting democracy and human rights around in Cuba. In exchange, the European Union has agreed to a series of so-called disciplines to limit investment in expropriated property in Cuba and elsewhere. The rules prohibit governments form providing loans, grants, subsides, risk insurance, diplomatic advocacy and many other prohibitions. Under the agreement people who feel that their property has been illegally expropriated would be able to list their claims with a new international registry. Governments would then check that registry when companies request help with particular adventures.3
While attending the World Trade Organization annual meeting for a multilateral trade system, President Castro urged nations to continue tearing down trade barriers and adopt the trading system to the demands of a rapidly changing global economy. President Castro supports the tearing down of trade barriers because of the extreme economic status of Cuba. President Fidel Castro, First secretary of the Central Committee of Communist Party of Cuba, gave a speech responding to the plans for a stronger establishment of the Multilateral Trade System, at the Palace of Nations. However he is aware of the possible alignment of advanced power nations form his Cuba. President Castro states:
"The intention of all this is to internationalize the principle of the infamous Helms-Burton Act under the umbrella of a multilateral agreement. The act, which has not been modified in any way, has arbitrarily turned people who are Cuban citizens at the time of the expropriation into expropriated Americans. Actually, the extraterritorial nature of the blockade had been in force long before that shameful law came into existence. The U.S. government prevents all U.S. companies, no matter where they are based, from trading with Cuba. That constitutes a violation of sovereignty and is extraterritorial in nature. There are plenty reasons for the world to feel humiliated and be concerned and the WTO [World Trading Organization] should be capable of preventing economic genocide. Disputed between the United States and the European Union about this law should not be settled at Cuba's expense. The agreements announced in London yesterday are unclear, contradictory, and threatening for many countries, as well as unethical."4
President Fidel Castro is not in support of the negotiations between the United States Policy-makers and the European Union. President Castro foretells that these negotiations will produce an alliance between advanced economic nations, undermine the country's Marxist-Leninist economic ideology, and cause difficult times in his country. Without the economic sanctions, Castro won't be able to promote propaganda that the United States Policy-makers are trying to kill the Cuban economy. He won't be able to sustain power through the common known threat, the United States Policy-makers, which align some Cubans under his regime. However, President Castro would want the lifting of economic sanctions because it will stimulate the economy in Cuba. No regime wants their subjects unsatisfied and/or hungry; unsatisfied subjects can lead to a revolt against the government.
This essay will explore why departments and interest groups of the United States are considering uplifting economic sanctions, even though the Clinton Administration and Congress has not achieved their goals. This essay will go about doing this by (1) giving a brief description of the Helms-Burton act, it's purposes and Castro's response to the enactment; and (2) provide a description of the different interest groups and departments of the United States, that are either for or against the lifting of these sanctions.
The Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 has an overall purpose "to seek international sanctions against the Castro government in Cuba to plan for support of a transition government leading to a democratically elected government in Cuba and other purposes."5
The Libertad Act, also known as the Helms-Burton Act, was a response to the Cuban government's attack on two aircraft of United States origin, which caused civilian causalities. Upon ratifying the bill on March 12, 1996, President Bill Clinton states:
"[The Helms-Burton Act] is a clear statement of our determination to respond to attacks on U.S. nationals and of our continued commitment to stand by the Cuban people in their peaceful struggle to freedom. The Cuban regime's lawless downing of two unarmed planes served as a harsh reminder of why a democratic Cuba is virtually important both to the Cuban and to the American people. The Libertad Act, which I have signed into law in memory of the four victims of the cruel attack reasserts our resolve to help carry the tide of democracy to the shores of Cuba."6
The Executive and Legislative Branches worked in an bipartisan effort to ensure a quick response to the Cuban regime's terrorist action of shooting down two unarmed planes, despite known opposition of the bill from other nations and interest groups of the United States.
Section three of the Helms-Burton Act, underlines the purposes of this act in explicit terms:
"The purposes of this Act are: (1) to assist the Cuban people in regaining their freedom and prosperity, as well as in joining the community of democratic countries that are flourishing in the Western Hemisphere; (2) to strengthen international sanctions against the Castro government; (3) to provide for the continued national security of the United States nationals by the Castro government and the political manipulation by the Castro government of the desire of Cubans to escape that results in mass migration to the United States; (4) to encourage the holding of free and fair democratic elections in Cuba, conducted under the supervision of internationally recognized observers; (5) to provide a policy framework for United States support to the Cuban people in response to the formation of a transition government or a democratically elected government in Cuba; and (6) to protect United States nationals against confiscated by the Castro regime."7
The Clinton Administration and Congress have not been able to bring the Cuban government towards a democratic system, which is the ultimate goal of this policy. The measures needed to be taken by Cuba in order to lift the sanctions are (1) allowing political parties to organize; (2) support an effort for basic human rights and liberties, (3) promotion of a transition to democracy, and (4) decreasing acts of terrorism. However, the Clinton Administration is considering lifting parts of the Helms-Burton Act, which would allow more countries to perform transactions with Cuba, so long as it doesn't deal with expropriated property. The Clinton Administration is conducting a policy of appeasement in regards to the European Union.
The Cuban economy has suffered due to the economic sanctions placed on them. The Cuban government continues to proclaim Cuba a socialist or communist nation with a centralized economy organized under Marxist and Leninist ideology. "About 75% of the labor force is employed directly by the state."8 "The major sectors of the Cuban economy are tourism, nickel mining, agriculture, especially sugar and tobacco. Sugar, long the mainstay of the Cuban economy was surpassed by tourism in the late 1990's as the main source of foreign exchange. Remittances from abroad estimated at $500-800 million annually, are a major source of income in Cuba and helped sustain many families. An estimated 40% of the population have access to dollars."9 "Dollars" refer to United States Dollar bills. In Cuba, United States currency is highly valued, it gives one access to medicine, food, and other necessities that Cubans with pesos can't receive. Cuba has actual "dollar stores" that hold these necessities, which only accept United States dollars. Tourists and communist supporters have access to these stores.
"The Cuban government defaulted on most of its international dept in 1986, and remains outside of international institutions such as the World Bank. To finance imports, the government relies heavily on short-term loans. Because of its poor credit rating, an $11 billion hard currency debt and the risk associated with Cuban investment, interest rates have reportedly been as high as 22%."10 "The Cuban Government launched a covered program to attract foreign tourism and investment. The Cuban Government estimated growth in 1997 at 2.5%. Estimated per capita income in 1997 was $1,540. Living conditions in 1998 are well below the 1990 level."11 "While continuing to limit private investment by Cuban citizens, the Cuban Government is actively courting international investment. It has attracted investment from Canada, Italy, the United Kingdom, Mexico, Spain, France, and other countries. Estimates of the amount of international investment paid in vary, but it is thought to be between $1.1 billion to $1.4 billion since 1990."12 However, "Investors are constrained by the U.S. Cuban Liberty and Democratic Solidarity Act, which provides for sanctions for those who 'traffic' in property expropriated from the U.S. citizens. As of March 1998, 15 executives of three foreign companies had pulled out of Cuba or altered their plans to invest there, due to the treat of action under the Libertad Act."13 Hopefully, this list of facts concerning the economy in Cuba will show the desperate strain the Marxist-Leninist ideology and the Castro regime actually has on the Cuban economy and why the lifting of economic sanctions will help the economy of Cuba. Unfortunately, the lifting of economic sanctions may help the Castro's regime stay in power.
After the enactment of the Helms-Burton Act, President Fidel Casrtro of Cuba has used the rhetoric of United States Policy-maker decision to impose sanctions on Cuba as a common enemy among all Cubans. In the Presidential Speech at the "Closing of the 17th CTC Congress," Castro states: "Since the measures [against Cuba] are more absurd each time, we are watching this sentiment grow around the world. The Helms-Burton law seeks to encourage all this, to keep people from daring to lend us any money or to invest here. What a paradox, I was thinking today. Helms and Burton are defending socialism Cuba. They are defending socialism because a joint venture is still in part, a capitalist venture, and an investment of capital. Helms, Burton and company want a 100 percent pure socialist Cuba. ... The mere fact that this administration, in the end, backed the cruel, inhumane brutal, and stupid Helm-Burton law show an unquestionable weakness in character and a lack of ethics."14
In another speech, President Castro states: "One track [sanctions] aimed to starve us to death and the other aims to force us to nibble around the edges of the contemptuous Yankee imperialism. The revolution is so strong and firm that we are facing that cruel and evil law called Helms-Burton Act, which has elicited so much rejection in the world. This represents an attempt to dictate laws on other countries and seek that these countries observe those laws. We cannot underestimate the harm that all those measures do to us, the obstacles they pose to our development, and the ways means in which they attempt to hamper the financing that our country needs for economic recovery. We were badly hurt by the disappearance of the Soviet bloc and the Soviet Union, and now we must contend with the pressures exerted on investors, which today we need as part of the revolutionary strategy to preserve the county's independence and the conquests of the revolution."15
President Castro uses the imposition of Economic sanctions on Cuba as a means of scapegoat. He blames the United States for the desperate conditions in Cuba. He also blames the United States for using "secondary boycotting" measures to deter other countries from investing in Cuba. He attempts to divert the attention of his regime's failure in revitalizing the Cuban economy.
What are certain departments and interest groups responses towards lifting economic sanctions?
The main branch of government proposing the lessening of the restrictions of the Helms-Burton Act is the Executive Branch. Their primary purpose is to maintain and build a multilateral trade system, which adheres to the international laws of illegal expropriated property. The Executive Branch's main goal concerning Cuba is to promote a smooth transitional government in support of democracy. President Clinton, in his preface to Marti's article, "Support for Democratic Transition in Cuba: Report to Congress," he states " the promotion of democracy abroad is one of the primary foreign policy objectives of my Administration. ...The United States is committed to help the Cuban people in a transition to democracy. We will continue working with others in the international community who share our desire to welcome Cuba into the ranks of prosperous democratic nation, where it will proudly join the other thirty -four countries in this hemisphere."16 Jose Marti argues, in his article "Support for a Democratic Transition in Cuba: Report to Congress," that with the growing disparity of democratic and non-democratic nations, these non-democratic nations will push for basic human rights, the dissolvent of the political regime and external international pressures for democratization will bring about democracies in these nations. He further states how the U.S. and the International Community will embrace a democratic Cuba. "Once Cuba has a transitional government -that is, a government committed to the establishment of a fully democratic, pluralistic society-the United States will be prepared to begin normalizing relations and provide assistance to support Cuba's transition. Economic sanctions will be suspended and negotiations will be initiated to promote bilateral trade relations."17
The Executive Branch isn't trying to alienate the Cuban government and economy away from other nations. The Executive Branch doesn't believe in the socialist or communist government that rules Cuba: the Marxist-Lenin ideology portrayed in Cuba's economy: the abandonment of basic human rights of free associations, elective representation, independent trade unions, and small businesses; terrorism set forth during Castro's regime: Cuba acts of proliferation of weapons of mass destruction, and many other workings of the Cuba's government. Once Cuba makes a turn towards democracy, the U.S. policy-makers and the International community shall embrace Cuba. The Executive Branch may wish to lift parts of the Helm-Burton Act in order allow of stimulation of the economy in Cuba; allowing for the Cuban people to interact with the democratic ideas and institutions by other nations. Due to the visit of Pope John Paul, the second, to Cuba, the Executive Branch has also pushed for more humanitarian aid to the Cuban people. This method is being adopted in order to uplift the economic situations of the citizens of Cuba, so they can increase their support and mobilization for democracy.
Michael E. Ranneberger, Coordinator for Cuban Affairs, addresses the issue of U.S. policy towards Cuba in his speech, "United States Policy toward Cuba and Its Impact on Emerging Markets."18 Ranneberger defines "emerging markets" to "less developed countries which have undertaken market-oriented reforms and are reaping the benefits of economic growth and greater social mobility."19 If the Cuban government and/or people make a transition towards democracy, the transition will open up their economies to other nations and improve the living standards of their citizens. Ranneberger calls for increased information flow between the United States and the Cuban people. The Cuban people are not falling into entrapment of the rhetoric of their President Fidel Castro, which gives some members of Cuba a false sense of nationalism and allegiance to their regime. If the Cuban people know that the United States does allow for humanitarian relief to their country and would provide food and medicine for it's people; this would further alienate the Castro regime form the citizens of Cuba. "While we believe that tough economic sanctions are necessary to maintain pressure on the government to undertake peaceful democratic change, the Administration also believes change in Cuba must come from within, led by Cubans on the island who recognize the problems and the injustices of the current system and challenge them. Increasing the flow of information to, form, and within Cuba is essential to fostering this dynamics, as is outside support and advice to independent groups trying to carve out space for their activities."20
Some members of Congress support an increasing humanitarian aid to Cuba. However, they believe no provisions of the Helms-Burton Act should be lifted. Senator Helms, Senate Foreign Relations Committee Chairman and founder of this Act, stated "It will be a cold day in you know where before the European Union convinces me to trade the bindings restrictions in the Helms-Burton law for an agreement that legalizes their theft of American property in Cuba."21
A report addressed from Senate Foreign Relations and House International Relations Committees to Congress argues for the containment of the Castro regime through economic sanctions and appeasement of the citizens of Cuba through humanitarian aid. "Most ordinary Cubans we [Congress] spoke with blamed the Marxist-Leninist economic system, not the U.S. embargo for their daily hardships. Virtually all of those who said the U.S. embargo should be lifted said they felt this way because it would take away from Castro's excuse; but they added that it would not change their access to food and medicines. Castro is seeking, and is prepared to profit from any relaxation of the U.S. embargo. Castro uses the U.S. embargo as a scapegoat for Cuba's problems, but he is desperate to have it lifted to reap the financial and propaganda benefits."22 By providing humanitarian aid to the citizens of Cuba, United States policy-makers shall help give some relief to the needy people of Cuba, undermine Castro's regime, and help uplift the populations morale to possibly overthrow the government. Some members of Congress have evidence that "Foreign investors in Cuba employ virtual 'slave labor' and provide massive cash subsides directly to the regime. Foreign investors do not hire and pay Cuban workers directly; they get their workers through 'CUBALSE,' a government agency run by the Minister of Interior. Investors pay the regime enormous sums (as high as $10,000 per worker), but the regime pays the Cuban workers a few hundred Cuban pesos (virtually worthless in Cuba's dollar economy) and pockets the difference."23 By allowing lenient measures on the some provisions of the Helms-Burton Act, the Clinton Administration will be indirectly taking off pressure of a multilateral stance against Cuba. The European Nation does state it will support human rights and a democratic change in Cuba, however Congress doesn't find that statement convincing. If Clinton act further on uplifting provisions of the Helms-Burton act, there will be a gridlock for policy in Washington.
The Cuban American National Foundation (CANF)'s main itinerary towards Cuba is stated:
"The process to restore the institutionally, the human rights and liberty and democratization of Cuba will only commence with the complete separation from the structures of military and civil power of Fidel and Raul Castro. Once separated from power the main culprit of the Cuban tragedy, it is incumbent on those of the Cuban armed forces who have not participated in the repression and the crimes against the population to become guarantors of the social and political stability, protections of the national sovereignty and the civil and human rights of its people, thus gaining the trust of a grateful nation."24 The CANF's main purpose is to promote democracy in Cuba and humanitarian aid to relieve the Cuban people.
Jose R. Cardenas, a member of CANF, states "The role of the U.S. policy is to keep Castro's predicament right before his eyes and to force him to face the consequences of his misrule."25 Jose R. Cardenas also responds to the assumption that Corporate America can promote democracy, which is one of the lead arguments of the interest group of U.S. Engage. He states "The argument that trade can lead to the expansion of individual freedoms and that subvert a dictatorship only has merit, for some semblance of free market economic activity is at work in the society. In Cuba, there is none. Lifting the embargo before Castro allows any free market activity in Cuba will not undermine him; it will only enable him to re-capitalize and reinforce his dictatorship."26
Before taking a look at departments and interest groups that are pushing for total abandonment of the Helms-Burton Act, it is important to note that these departments and interest groups have something to gain by the up lifting of the embargo. They gain a hard currency flow in their departments and interest groups. There are numerous numbers of groups that are against the Helm-Burton Act and argue for total uplifting of the act; this essay will focus on U.S.A Engage and The International Business Center for Strategic &International Studies.
Ernest H. Prego & William M. School, Chair in the International Business Center for Strategic & International Studies, argues that the economic sanctions on Cuba should be lifted. He believes that the last thing the Castro regime wants if to see the lifting of the U.S. economic sanctions. They state "the failed Cuban policies are principally to blame, but that the U.S. embargo deprives the Cuban economy of $1-2 billion per year of hard currency, which is substantial compared with the total Cuban imports of goods and services in 1996 of $4.2 billion. This $1-2 billion adverse impact on the Cuban economy from the U.S. embargo comes principally from the prohibition on U.S. imports form Cuba and travel to Cuba by U.S. citizens. A lifting of the import embargo would also permit significant Cuban exports to the United Sates of fruits, vegetables, cigars, rum, and other consumer products. In contrast, the embargo to the United States exports to and investment in Cuba is having relatively little adverse impact on the Cuban economy."27
Another interest group that wishes to have the embargo lifted on Cuba is U.S.A. Engage. They argue that economic interaction with other non-democratic countries will actually promote democracy. In "Economic Engagement Promotes Freedom," they argue that "the engagement of Americans abroad is a powerful tool to promote freedom and peace Economic activity--business and farmers exporting, investing, purchasing-is an important element of engagement. ... Americans also bring with then American values -inherent worth of the individual, freedom, and the rule of law. A growing diversified economy is one of the pillars of democracy. Market-oriented development causes social changes that impede authoritarian rule. These include widespread education, the opening of society to the outside world, and the development of an independent middle class."28
The Clinton Administration is considering lifting title three and title four of the Helms-Burton Act, even though the Administration and Congress has not achieved it's policy goal of a democratic Cuba. President Bill Clinton has shifted him emphasis on a more multilateral effort towards Cuba, which can jeopardize some of the original contents of the Act. During negotiations with the European Union, the Clinton Administration has promised for more lenient measures in regard to Cuba, if the European Union agrees to support international law regarding illegal use of expropriated property. The push for change will not occur easily for the Clinton Administration. Other departments and interest group are dead against the releasing of some of the pressure on the Cuban government.
1 White House. "White House Fact Sheet on Expropriation Understanding (Aims to Resolve Helms-Burton dispute with EU)." May 18,1998. http://www.usia.gov/regional/ar/us-cuba/eu18.htm
Further Information: European Union "Understanding with Respect to Disciplines for the Strengthening of Investment Protection." May 18,1998. http://www.eurunion.org/news/invest.htm
2 Kempster, Norman. "GOP may retaliate for waiving of sanctions: Politics: White House efforts on free-trade accord, UN funding could be jeopardized, House staff members say." Los Angeles Times: Home Edition. May 20,1998. http://web.lexis nexis.com/universe/doc…3&_md5=969ce08b5c477693fbda9ed4090c6dbc
3 White House. Ibid. http://www.usia.gov/regional/ar/us-cuba/eu18.htm
4 Castro, President Fidel. "Unity is the only wealth we possess, the only guarantee in the defense of our legitimate aspirations." 50th Anniversary of the establishment of the Multilateral Trade System at the Palace of Nations. Geneva, Switzerland. May 19, 1998. http://www.granma.cu/1998/98may2/discu-i.html
5 Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996&emdash;Helms-Burton. 104th Congress of the United States of America. http://www.usia.gov/regional/ar/us-cuba/libertad.htm
6 Clinton, President Bill. "Statement by the President." The White House. Office of the Press Secretary. http://www.usia.usemb.se/topical/econ/libertad/prezful.htm
7 Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996. http://wwwusia.gov/regional/ar/us-cuba/libertad.htm
8 United States Department of State. "Background Notes: Cuba, April 1998." Released by the Bureau of Inter-American Affairs. http://www.state.gov/ww/background_notes/cuba_0498_bgn.html
14 Castro, President Fidel. "Castro speaks art Closing of 17th CTC Congress." Havana Radio and Television Networks. May 1,1996. http://www.lanic.utexas.edu/cgi-bin/search/lanic?language=English&verbose=1&listenv=PRE&application=&convert=&converthl=&refinequery=&formintern=&formextern=&multiple=0&descriptor=local%2fcuba%2fcastro-1990s%7c147%7c12516%7c1996%20%20Cuba:%20Castro%20Closes%20Youth%20Congress%2020%20Jul%7cTEXT%7clocalhost:0%7c%2fexport%2fshare%2fwais%2fdata%2fcuba%2fcastro-1990s%7c0%2012516%20%2fexport%2fshare%2fgopher%2fdata%2fla%2fCuba%2fCastro%2f1996%2f19960721
15 Castro, President Fidel. "Castro Addresses CDR Rally." Havana Radio Rebelde Network. September 29, 1996. http://www.lanic.utexas.edu/cgi-bin/search/lanic?language=English&verbose=1&listenv=PRE&application=&convert=&converthl=&refinequery=&formintern=&formextern=&multiple=0&descriptor=local%2fcuba%2fcastro-1990s%7c106%7c28718%7c1996%20%20Cuba:%20Castro%20Addresses%20CDR%20Rally%7cTEXT%7clocalhost:0%7c%2fexport%2fshare%2fwais%2fdata%2fcuba%2fcastro-1990s%7c0%2028718%20%2fexport%2fshare%2fgopher%2fdata%2fla%2fCuba%2fCastro%2f1996%2f19960929
16 Marti, Jose. "Support for a Democratic Transition in Cuba: Report to Congress." Preface by President William Clinton dated January 28, 1997. http://www.state.gov/www/regions/ara/helmbu.html
18 Ranneberger. Michael E. "U.S. Policy toward Cuba." Remarks at Friedrich Hayek University. Coral Gables, Florida. November 17, 1997. http://www.state.gov/www/regions/ara/971117_ranneberger.html
21 Balz, Dan. "U.S. Eases Stands on Cuba, Iran Sanctions; Helms Condemns, Europe Hails Move." The Washington Post. May 18,1998. http://web.lexis-nexis.com/universe/doc…3&_md5=of 3377bbccb118db554ec03696c8ad
22 Reported form Senate Foreign Relations and House International relations Committees. "Congressional Panels call for increased Humanitarian Aid to Cuba." March 5, 1998. http://ww.usia.gov/regional/ar/us-cuba/congress.htm
24 Board of Directors. The Cuban American National Foundation. Miami, Florida. January 12, 1998. http://www.canfnet.org/canf-lib/basis.pdf
25 Cardenas, Jose R. "U.S. Policy towards Cuba: A Defense." The Cuban American National Foundation. January 19,1998. http://www.canfnet.org/english/press/e980119a.pdf.
27 Prego & Schooll. Chair in the International Business Center for Strategic & International Studies. House Ways and Means Trade Trade Policy with Cuba. "Testimony." May 7,1998. http://web.lexis-nexis.com/universe/docu…a3&md5=32071d25265dc43c04d53aa6e5accd9
28 U.S.A Engage. "Economic Engagement Promotes Freedom." http://www.usengage.org/studies/engagement.html