US-Cuba relations have been mutually belligerent since Spain ceded Cuba to the US in 1898. Political shenanigans keep getting in the way of moves towards more equal relations and the political influence of first-generation Cuban-Americans has played its part.
The history of the Trade Embargo
The US trade embargo on Cuba, or ‘el bloqueo’ (‘the blockade’), as the Cubans call it, is a commercial, economic, and financial embargo, encompassing all exports to Cuba except for food and medicine (it was extended to include almost all imports on February 7th 1962). The trade embargo, and the severing of diplomatic relations with Havana, was imposed by the US on October 19th 1960 as a reaction to Fidel Castro’s 1960 reforms, under which all American owned Cuban oil refineries were nationalized without compensation. This act of nationalisation was itself a response to President Eisenhower’s cancelling of sugar imports from Cuba to the US, and US refusal to export oil to Cuba. In other words, ‘tit for tat’ hostility, based on economic and political differences, has defined relations between the two countries.
There are six statutes, derived in Congress, that enforce the embargo:
- Trading with the Enemy Act, 1917
- Foreign Assistance Act, 1961
- Cuban Assets Control Regulations, 1963
- Cuban Democracy Act, 1992
- Helms-Burton Act, 1996
- Trade Sanctions Reform and Export Enhancement Act, 2000
The Cuban Democracy Act, 1992, states that the US will maintain sanctions on Cuba until the country embraces democratisation and shows greater respect for human rights. It is this issue of human and democratic rights that is at the centre of Congress’ determination to keep the embargo in place.
The Helms–Burton Act, 1996, further restricts the rights of US citizens to do business with, or in, Cuba with restrictions on giving any public or private assistance to any government in Havana until certain claims, primarily financial in nature, are met. President Bill Clinton expanded Helms-Burton in 1999 – disallowing foreign subsidiaries of US companies to trade with Cuba. He moderated this in 2000 by authorising the sale of ‘humanitarian’ US products to Cuba. The Helms-Burton Act has been criticised by Canadian and European governments who object to legislation aimed at punishing non-US corporations and non-US investors who have economic interests in Cuba.
The trade embargo tends to react to any market reforms to the Cuban economy. For example, in 1993 Cuban market reforms legalized the US dollar and limited individual private enterprise, and transformed many state farms into semi-autonomous co-operatives – resulting in a tightening of the trade embargo. In October 2003, US President George Bush announced fresh measures to hasten the end of communist rule in Cuba, including tightening the travel embargo to the island, cracking down on illegal cash transfers, and directing a more robust information campaign.
It is difficult not to think of the trade embargo as a whipping rod, used by the US to punish and isolate Cuba. Every year since 1992 the UN General Assembly puts the embargo up for vote and annually passes a resolution condemning the ongoing impact of the embargo. This declares it to be in violation of the Charter of the United Nations and international law.
Human rights groups such as Amnesty International, Human Rights Watch, and the Inter-American Commission on Human Rights have criticised the embargo for its effects on food, clean water, medicine, and other economic needs of the Cuban population. Travel restrictions embedded in the embargo have also been shown to limit the amount of medical information that flows into Cuba from the United States. Some religious leaders point out that the humanitarian and economic hardships the embargo imposes on Cubans are un-Christian. Some critics of the embargo claim it is not legitimate because Cuba still receives tourists and trade from other countries. Others argue that Cuba’s problems are not the fault of the trade embargo but are due to Cuba’s unwillingness to liberalize its economy and diversify its export base during the years of abundant Soviet aid, resulting in a lack of foreign currency and financial debts owed to Cuba’s Japanese, European, and Latin American trading partners.
The U.S. Chamber of Commerce estimates that the embargo costs the US economy $1.2 billion per year in lost sales and exports, while the Cuban government estimates that the embargo costs the island itself $685 million annually. The self-proclaimed non-partisan Cuba Policy Foundation estimates that the embargo costs the US economy $3.6 billion per year in economic output.
The role of Obama’s Cuba Policy
Barack Obama discussed easing (but maintaining) the embargo during his 2008 campaign for the presidency. A poll the month following his election on November 4th 2008 suggested a majority of Cuban-Americans wanted an end to the embargo. In response, President Obama lifted restrictions on family travel and remittances to Cuba in April 2009. A step forward! Then, in December 2009, a step back when US citizen Alan Gross was detained in Cuba on accusations of spying for Washington. A step forward in October 2011, when convicted Cuban agent Rene Gonzalez was freed as scheduled from a Florida jail, was followed by a step back when US calls for the release of Alan Gross in return were refused in December 2011. Relations froze for months. Then, real progress came in September 2012 with Cuba suggesting it was ready to negotiate with Washington on the Gross case. Private talks in Canada began in June 2013, closely watched by Pope Francis.
Since the end of 2014, President Obama has been asking the US Congress to do away with the embargo. He points out that anything he can do with his executive power is increasingly limited by the trade embargo. Raúl Castro agrees but the leaders continue to disagree on issues like human rights. In December 2014, Obama lifted various travel and financial restrictions and opened embassies, but Congress continued to refuse to lift the embargo. On Tuesday, December 16th 2014 a 45-minute phone call between Obama and Castro finalised the release of US prisoner Alan Gross. A series of White House steps were introduced to relax travel, commercial and diplomatic restrictions in exchange for the release of Americans and dissidents held in Havana.
In concert with the prisoner exchange, Obama and Castro announced moves on December 17th 2014 to re-establish diplomatic relations and to loosen travel and economic policies. Obama announced a review of Cuba’s status as a terrorist state. Cuba agreed to allow Red Cross and UN human-rights investigators access to Cuba. Under the announced presidential changes there would be an increased ability to transact with Cuban nationals and businesses, including Cuban financial institutions, and US banks would be able to open accredited accounts in Cuban banks.
The 2016 Obama Castro handshake was a momentous event, representing as it does the desire to effect change. A formal end to the US trade embargo requires legislation in Congress but the executive changes already administered go a long way in significantly opening up relations and allowing travellers and trade to flow relatively freely. The White House hopes that by using a series of executive actions to minimise enforcement of the trade embargo, political reform will occur in Cuba and political opposition in the US will soften.
How do the changes affect tourists?
Cuban Assets Control Regulations, 1963, enforced by the US Treasury Department, affect US citizens and permanent residents wherever they are located, all people and organizations physically located in the US and all branches and subsidiaries of US organizations throughout the world.
The regulations do not limit the travel of US citizens to Cuba, but they do make it illegal for US citizens to spend money or receive gifts in Cuba under most circumstances, which essentially drastically limits any feasible US-Cuba tourism. Anyone subject to US jurisdiction requires a license to engage in travel-related transactions to, from, and within, Cuba. Transactions related solely to tourist travel are not licensable. Some US nationals circumvent the ban by travelling to Cuba from a different country, but this form of travel is illegal and US citizens risk prosecution and fines if discovered. The US Treasury Department’s Office of Foreign Assets Control (OFAC) considers any visit of more than one day to be proof of violation, and holds that US citizens may not receive goods or services for free from any Cuban national, eliminating any attempts to circumvent the regulations.
In December 2015, Obama relaxed travel restrictions so that now Americans can visit Cuba for any of a dozen specific reasons – such as visiting family, educational purposes, religion, journalism, research, humanitarian projects – and only need to acquire a general, versus special, license, which does not require permission or advance notification to US officials. US banks are now authorized to set up corresponding accounts at Cuban financial institutions, allowing travellers to use US credit and debit cards in Cuba. Travellers may now import up to $400 worth of goods per person from Cuba, including $100 worth of cigars and rum.
Although ‘tourism’ by Americans to Cuba is still illegal, if the person concerned fits into one of the twelve authorized categories, American travellers to Cuba are not officially considered ‘tourists’ by OFAC, which oversees such travel. This means the process of qualifying for such an OFAC-authorized category requires ‘self-censoring’. The level of supervision of the rules has become a lot more lax, and it makes it easier for Americans to mix being a tourist with the business of building ‘people-to-people’ ties. You can travel to Cuba under one of the sanctioned categories but still do touristy things.
To get to Cuba, tourists can either fly or sail.
On Monday 2nd May 2016, the first US cruise ship in forty years – the Adonia of Carnival Corporation from the Fathom voluntourism brand – crossed the Florida Straits from Miami and docked in Havana. More than a dozen other cruise ship lines have announced plans to run US – Cuba cruises. Haimark Line, a small-ship luxury cruise operator, recently announced plans to have its 105-cabin MS Saint Laurent sail 9-night round-trip voyages from Miami beginning in February 2016.
In May 2016, four ferry operators began making trips between Key West and Havana.
Adventure Smith Exploration’s schooner, The Panorama, will ship passengers between Havana, Marie LaGorda, Cayo Largo, Trinidad, and Cienfuegos from December 2016. Read our article for more information on sailing to Cuba from America.
Air travel to Cuba
Cheapair.com was the first site to allow American travellers to book direct flights from the US to Cuba via the charter company Cuba Travel Services. Island Travels and Tours expanded its service from Miami and Tamp in 2016 to include major international hubs like Orlando. American Airlines will begin operating direct nonstop flights between Los Angeles International Airport and José Martí International Airport in Havana from December 12th 2016. Havana Air, in partnership with Eastern Airlines, has begun making weekly direct trips between Houston’s George Bush Intercontinental Airport and Havana. JetBlue became the first major US carrier to launch direct flights between New York City and Havana.
For the travel ban to fully relax for tourists the Helms-Burton Act of 1996 needs to be repealed by Congress. If US – Cuba economic ties in the tourism sector and elsewhere continue to gain increasing support among a broad cross-section of the exile community in the US, the lifting of the ban may still be possible.
The Cuban government’s commitment to opening up to foreign investment to get the large-scale capital influx needed to develop a modern infrastructure will determine the pace of progress. Cubans are still attached to their own way of life and their state-controlled form of government and will probably take their time assessing the effects of capitalism to determine just how much of it they want.