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AMCHAM CUBA NEWSLETTER

TABLE OF CONTENTS                                                        MARCH 2001

1. ITC report says cost of embargo to Cuba has not been large

2. More views on US embargo

3. Prospects for change in Cuba - visitors’ reports                    

4. Foreign trade problems & hopes

5. US licenses carriers to transport food & medicines to Cuba

6. US again labels Cuba a “Human Rights Abuser”

7. Brothers-to-the-Rescue families to get compensation from frozen funds

8. Group travel to Cuba grows

9. Sources and Resources

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1. Embargo impact on economy found to be "minimal". [RW1]   An International Trade Commission report was issued February 16 on the “Effects of US Embargo Against Cuba’, prepared at the request of the House Ways and Means Committee.  It says US sanctions have had little impact on either nation’s economy, especially compared to Soviet aid which reached $6 billion/yr in the late 1980s.  Since Cuban reforms in the 1990s to attract foreign investment, the ITC report says, it is likely that, without the embargo US sales would have comprised ¼ of all Cuban imports, while exports (except sugar) to the US would have been 7-15% of Cuban exports.  The report is available at www.usitc.gov or call 202-205-1809.

Representative Rangel (D-NY) said the ITC report is a positive indicator for reintroducing legislation to end all trade sanctions against Cuba, and indeed Democatic Congressmen Neal (Mass.) and Jefferson (LA) have introduced such a bill, with Senate versions introduced by Democrats Baucus (MO), Lincoln (AR), Dorgan (ND) and Roberts (KA).  Rangel  cited the ITC prediction that US trade with Cuba could rise to $1.6 billion/year if US sanctions are ended, or more, in view of “the conservative economic assumptions the ITC usually uses.”  He also said the ITC indicated that trade with Cuba would be a larger share of the US economy than expected.  However, the Cuban American National Foundation (CANF) found that the report “confirms what anyone with knowledge of Castro’s Cuba… knows - that Cuba is a bad place to do business and the notion of an untapped, profitable market is a mirage,” said Executive Vice President Dennis Hays. 

Despite close to 1.8 million tourists last year, Miguel Alejandro Figueras of the Ministry of Tourism told the World Trade Organization (WTO) that the US ban on its citizens visiting Cuba cost Cuba nearly $16 billion in lost revenue, or ten times Cuba’s entire export income in 1999.  Revenue lost from tourist ships that would have visited Cuban ports during the last 40 years might have been $1.7 billion.  US tourist statistics before 1961, together with recent US tourism growth across the Caribbean, suggest that Cuba could have expected 25 million people to travel to the island.

FOR AN AUTHORITATIVE VIEW OF CONGRESSIONAL ATTITUDES AND PLANS AFFECTING US-CUBA POLICY COME HEAR DR. JULIA SWEIG AT THE NATIONAL PRESS CLUB, NOON, TUESDAY, MARCH 13.  SHE HAS SPENT LONG DAYS WITH MEMBERS OF BOTH PARTIES ON THE TOPIC.  TO RESERVE LUNCH, CALL 202-833-3548. 

2. More pronouncements on the US embargo.  According to Secretary of Agriculture Ann Veneman February 27, the Bush Administration won’t relax the trade embargo against Cuba beyond the openings created by Congress last fall.  She said neither financing of Cuban purchases of American food nor subsidies of US exports will be endorsed. 

Ex-Secretary of State Madeline Albright told the OAS (Organization of America States) February 21 that President Bush won’t change Cuba policy because US law prevents him from doing so “until a near perfect democracy [is]…in place.”  She urged Congress to “give President Bush the capacity to offer incentives aimed at shaping events in Cuba, and not merely react…to them.”

Dissenters to the Council on Foreign Relations (CFR) December report (which we reviewed last month) continue to charge the CFR with trying to soften the embargo.  Mark Thiessen, staffer at  Senate Foreign Relations, wrote, in a February CANF (Cuban-American National Foundation) special report, that, although one of the goals of the report was to “lay aside the debate” on the embargo’s efficacy and find consensus on ways the US could reach out to the Cuban people and support Cuban civil society, the ”CFR failed to do so”.  Instead, it advocated lifting both the tourism embargo and restrictions on food and medicine sales.  He accused CFR of engaging the Cuban government rather than aiding the Cuban people to “create a free society within the decaying shell of Castro’s totalitarian system” and charged that American tourists flooding Cuba’s beaches and resorts would not encourage democratic change.  

           

CANF amplified its opposition to lightening US sanctions and reaffirmed support for the Cuban people.  Irving Horowitz called the CFR report a “humanitarian capitulation”.  Jorge Mas Santos, CANF chairman, told an audience of the Inter-American Dialogue (IAD) Febru-ary 7 that the Administration should pursue policies empowering the Cuban people and promoting their independence, so as to promote Cuba’s transition to democracy.  Mas would support Cuban pro-democra-cy NGOs, allow US business to export raw materials, help families of prisoners of conscience, promote independent enterprise by expanding the private economic sector, license private, religious and non-govern-mental organizations to operate distributions centers in Cuba, open more American news bureaus in Cuba, fund NGOs to provide access to Internet and e-mail by Cuban citizens independent of government control, and expand contacts with Cuban people so that US government officials can move more freely.

The CANF dramatized its views at the opening of its “Free Cuba Embassy” in Washington February 6. The new office will house lectures and dissident art shows “to remind Americans of Cuban rights abuses.” Spokesman Jose Cardenas described a “reinvigora-ted campaign to meet new challenges” and the “strong US policy towards Cuba.”  US officials attending included Senators Lieberman (D-CT) and Torricelli (D-NJ), and Representatives Kennedy (D-RI), Deutsch (D-FL) and Burton (R-IN).

In anticipation of new Commerce Department rules on the food and drug sales, CANF also wants Bush, “not career civil servants”, to decide if rules allowing US food and drug sales to Cuba would be consistent with his position, Reuters reported February 22.

In contrast to these voices urging strict enforcement of the embargo, Lexington Institute Vice President Philip Peters said in the February 9 Wall Street Journal that every form of economic activity will benefit the Cuban people.  He cited a Havana clergyman who said visiting Americans “would permeate this place with the idea of a free society.”

3. First-hand reports on Cuba from visitors.  Council on Foreign Relations leaders were “encouraged” by a 5 ½ hour meeting with Castro February 17, at the end of a 4-day visit to Cuba.  The CFR group, led by former banker David Rockefeller, was not specific as to what recommendations made in their December report might open up.  The report proposed cooperation against drug trafficking, a flexible immigration to allow visits between Cuban families, negotiation of settlement of un-reimbursed property claims, and practical steps towards a “peaceful, democratic transition” after Castro.   Two CFR members were quoted as saying the meeting was very positive. 

Two state legislators taking books and small amounts of medicine to Cuba on behalf of OXFAM America recently returned, not surprisingly, with the view that the US trade embargo should be lifted.  Representative Joe Moakley (D-MA) recently led Boston businessmen on a trade delegation to the island, creating hopes for commercial opportunities.  Governor Ventura, long an opponent of the US embargo, is considering organizing a trip to Cuba with other governors from other mid-western states, hoping to promote an opening of trade with Cuba. 

In contrast, Representative Chris Smith (R-NJ) proposes that the US indict Castro for his role in the 1996 shoot-down of American civilian planes.  His opinion piece in the February 26 Wall Street Journal asked Attorney General Ashcroft to consider if heads of states are immune from punishment for killing in international air space.“ If they are not, he would have a federal grand jury consider if evidence supports an  indictment for murder, well enough to show that the killings were premeditated and Castro responsible for giving the shoot-down orders to the Cuban military. 

4. Cuba’s foreign trade problems and hopes.  French wheat exports to Cuba will be cut from 600,000 tons/yr to 400,000, due to Cuba’s payment arrears and delays in promised barter shipments of sugar to France.  Reduced wheat imports will lower wheat rations for Cubans. Cuba has imported 70% of its wheat from France since the fall of the USSR.

Malaysia's new embassy to open this month in Cuba reflects stronger economic ties to Cuba since Cuba set up an embassy in Kuala Lumpur in1997.  In a swing through Asia, Cuban Foreign Minister Felipe Perez Roque arrived in Malaysia February 20.  Topics discussed by the two foreign ministers included a Castro visit late this year, trade, investment, and US-Cuba policy.  Cuban officials hope Malaysian investors will help Cuba’s hotel industry, whose rooms grow about 5000/yr for rising numbers of tourists which may double by the year 2010 from current 3-4 million/yr.  Also discussed were possible investments in road-building, port facilities, and Cuban oil production, estimated at 3.5 million tons last year compared with 670,000 tons in 1990.  

Venezuela became the top trader with Cuba last year increasing trade by over 80%.  Cuba’s other main trading partners include Spain, Canada, the Netherlands, China and Russia.  Venezuelan president Hugo Chavez and Fidel Castro signed a trade agreement last October in Caracas that includes supplying 53,000 barrels of petroleum/da.

Cuba, mid-month, withdrew its invitation to Deputy German Foreign Minister Ludger Volmer for a visit February 19-22.  An earlier Volmer comment, that he would address human rights issues with Castro and that he would have canceled his visit if the two prominent Czech citizens had not been released, was considered critical of Castro’s government.   

A ripple was caused in US-Cuba relations by the expulsion by the Cuban National Afghan Association club of US Interest Section Chief Vicki Huddleston and her dog February 6.  In justification, the club’s president cited the decades of US hostility toward Cuba and “stimulation of hostility” by diplomat Huddleston – circumstances “incompatible with the morality of our association and our people.” Huddle-ston speculated that her expulsion may have been prompted by her pooch’s first prize won over the club president’s dog  in a recent competition.  The club later reinstated the dog, if not its owner.

5. First official US ok given to US carriers to transport food and medicines to Cuba.  At the end of February, the US Treasury Department awarded a first US license to ship food and medicines to Cuba following last year’s legislation allowing such sales.  Jacksonville’s Crowley Liner Services will add Cuba to its weekly route to Mexico by April, says Doreen Hemlock (Florida Sun-Sentinel). About 6-17 freight containers weekly will let Crowley break even on the direct hauling. 

John Kavulich, US-Cuba Trade & Economic Council head,says two other food companies have licenses.  Mayflower International Ltd. expects to offer shipping of food and other agricultural goods to Cuba, third-party financing and sourcing services if it gets its requested license (e:mayflower@mindspring.com)

In contrast, citing loyal customers’ views, Goya Foods President Robert Unanue says it will “only do business with a free Cuba, without Castro.”   

US airlines have of course been approved for charter flights.  Most other US firms authorized to do business with Cuba, like magazine publishers, ship via third countries. 

6. US again labels Cuba a serious “Human Rights Abuser”.  The State Department’s annual report on the global state of human rights again cited Cuba’s record as “poor”, along with Myanmar and North Korea.  It says Cuba “continued to violate systematically the fundamental civil and political rights of its citizens,” accused Castro of controlling all aspects of life, infringing of privacy rights and freedoms of speech, press, assembly and association, and noted unconfirmed reports of extra-judicial killings by police and mistreatment of prisoners. The report is available at www.state.gov.

Reports from Cuba continue to describe arrests and imprisonments.  Two dozen opposition activists were picked up February 24-25 in an effort to minimize protests commemorating the 1996 shoot-down of four fliers, Reuters reported 

Cuba arrested an exile, Elizardo San Pedro Marin, who confessed to sending threats to the Mexican embassy in Cuba and others, allegedly for the paramilitary Cuban-American exile group Alpha 66.  Elizardo Sanchez, head of Cuba’s Commission for Human Rights & National Reconciliation says the arrest may have been set up by state security, noting the oddity that a Cuban associated with dissidents could access Cuban state fax and courier services. 

However, one anti-Castro Cuban American was released from jail for health reasons.  Ernestino Abreu Horta, 76, had staged an armed landing in western Cuba taking in medicines, and sentenced to 15 years, along with another exile, Vincente Marcelino Rodriguez Martinez, for “planning rebellion.”   

To counter allegations of its human rights abuse, Andrew Cawthorne of Reuters on March 2 described a Cuban diplomatic and public relations effort.  Of particular interest, Cuba has posted new documents on its Foreign Ministry web site (www.cubaminex.cu) which defends Cuba's record and alleges US human rights abuses. 

7. Brothers-to-the-Rescue families to get frozen Cuba funds.  The US Treasury Department on February 13 authorized release of frozen Cuban assets to compensate families of three Miami men downed in 1996 when searching for Cuban refugees at sea by a Cuban MiG.  The families sued Cuba for damages in Miami federal court.  US District Judge James King ordered Havana to pay $187.6 million, but they could not collect because, for national security reasons, Clinton had blocked a 1998 law allowing US victims of alleged terrorist attacks by foreign states to collect damages by attaching that nation’s assets.  However, the October 2000 legislation made it easier to collect from foreign assets, letting Clinton unfreeze the money.  The families plan to donate the funds to groups giving scholarships to rafters’ child-ren, charities, and a trust fund for one victim’s mother. 

8. Travel to Cuba continues.  Cuba is the destination of choice for many Americans hoping to bring back the allowed $100 in Cuban goods, including rum and cigars.  Organizations currently announcing group trips include Cross-Cultural Solutions (tel. 800-380-4777 or  www.crosscultural solutions.org, Elderhostel (877-426-8056 or www.elderhostel.org), Global Exchange (800-487-1994 or www. globalexchange.org), The 92nd Street Y (212-996-1100 or www.92ndsty.org), and VETS2CUBA (415-841-9635 or www.vets2cuba.org). 

9. Scholarly Sources.  CUNY (City Univ. of NY) announces a new course on “The Cuban Economy: Present and Future Perspectives”, taught by Evaldo A. Cabarrouy of the Univ. of Puerto Rico.  To register for the 5-seminar, $200 course, held 6-8:00 p.m. March 6, 20; April 3, 17; and May 2, contact Continuing Education & Public Programs, email continuinged@gc.cun.edu, or tel. 212-817-8215. 

On March 9, at 4:00, a CUNY international policy forum on “Bush and Cuba: What to Expect” will be offered by Jorge I. Dominguez, director of Harvard’s Weatherhead Center for International Affairs and author of "Cuba: Order & Revolution and To Make A World Safe for Revolution:Cuba’s Foreign Policy." The forum will be held at 365 Fifth Av.  Call 212-817-2096 or email: bildner@gc.cuny.edu.

ASCE (Association for the Study of the Cuban Economy) has issued its volume for the year 2000.   The 500-page volume 10 on “Cuba in Transition” contains papers and selected commentaries in English and Spanish presented in Miami last August 3-5.  They cover Cuba’s current politicoeconomic situation, macroeconomics, the external sector, agriculture including sugar, environment, tourism, social and legal issues, and sectoral economic developments.  Speakers were major American, Cuban-American, and Cuban analysts of the Cuban scene, plus a few scholars from the UK, Mexico, and the international financial institutions.  For ASCE membership, contact stuartlippe@hotmail.com.  Forms for ordering the volume are at www.ascecuba.org.

 

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Please let us know of Cuba-related meetings or other information of interest to American business.  We are glad to share your views and information with other AmCham Cuba members.   

Sincerely,

Phoebe Lansdale                                                                                March 5, 2001

Executive Director

Editorial review:  Robert Weekley