01/16/13 - Forbes - It's Time For The U.S. To End Its Senseless Embargo Of Cuba
By Daniel Hanson, Dayne Batten & Harrison Ealey
For the first time in more than fifty years, Cuban citizens can travel
abroad without permission from their government. The move, part of a
broader reform package being phased in by Raul Castro, underscores the
irrationality of America's continuation of a five-decade old embargo.
While the embargo has been through several legal iterations in the
intervening years, the general tenor of the U.S. position toward Cuba is a
hardline not-in-my-backyard approach to communism a la the Monroe
Doctrine. The official position is outdated, hypocritical, and
The Cuban embargo was inaugurated by a Kennedy administration executive
order in 1960 as a response to the confiscation of American property in
Cuba under the newly installed Castro regime. The current incarnation of
the embargo - codified primarily in the Helms-Burton Act - aims at
producing free markets and representative democracy in Cuba through
economic sanctions, travel restrictions, and international legal
Since Fidel Castro abdicated power to his brother Raul in 2008, the
government has undertaken more than 300 economic reforms designed to
encourage enterprise, and restrictions have been lifted on property use,
travel, farming, municipal governance, electronics access, and more. Cuba
is still a place of oppression and gross human rights abuse, but recent
events would indicate the 11 million person nation is moving in the right
Despite this progress, the U.S. spends massive amounts of money trying to
keep illicit Cuban goods out of the United States. At least 10 different
agencies are responsible for enforcing different provisions of the
embargo, and according to the Government Accountability Office, the U.S.
government devotes hundreds of millions of dollars and tens of thousands
of man hours to administering the embargo each year.
At the Miami International Airport, visitors arriving from a Cuban airport
are seven times more likely to be stopped and subjected to further customs
inspections than are visitors from other countries. More than 70 percent
of the Treasury's Office of Foreign Assets Control inspections each year
are centered on rooting out smuggled Cuban goods even though the agency
administers more than 20 other trade bans. Government resources could be
better spent on the enforcement of other sanctions, such as illicit drug
trade from Columbia, rather than the search for contraband cigars and rum.
At present, the U.S. is largely alone in restricting access to Cuba. The
embargo has long been a point of friction between the United States and
allies in Europe, South America, and Canada. Every year since 1992, the
U.S. has been publically condemned in the United Nations for maintaining
counterproductive and worn out trade and migration restrictions against
Cuba despite the fact that nearly all 5,911 U.S. companies nationalized
during the Castro takeover have dropped their claims.
Moreover, since Europeans, Japanese, and Canadians can travel and conduct
business in Cuba unimpeded, the sanctions are rather toothless. The State
Department has argued that the cost of conducting business in Cuba is only
negligibly higher because of the embargo. For American multinational
corporations wishing to undertake commerce in Cuba, foreign branches find
it easy to conduct exchanges.
Yet, estimates of the sanctions' annual cost to the U.S. economy range
from $1.2 to $3.6 billion, according to the U.S. Chamber of Commerce.
Restrictions on trade disproportionately affect U.S. small businesses who
lack the transportation and financial infrastructure to skirt the
embargo. These restrictions translate into real reductions in income and
employment for Americans in states like Florida, where the unemployment
rate currently stands at 8.1 percent.
What's worse, U.S. sanctions encourage Cuba to collaborate with regional
players that are less friendly to American interests. For instance, in
2011, the country inked a deal with Venezuela for the construction of an
underwater communications link, circumventing its need to connect with
US-owned networks close to its shores.
Repealing the embargo would fit into an American precedent of lifting
trade and travel restrictions to countries who demonstrate progress
towards democratic ideals. Romania, Czechoslovakia, and Hungary were all
offered normal trade relations in the 1970s after preliminary reforms even
though they were still in clear violation of several US resolutions
condemning their human rights practices. China, a communist country and
perennial human rights abuser, is the U.S.'s second largest trading
partner, and in November, trade restrictions against Myanmar were lessened
notwithstanding a fifty year history of genocide and human trafficking
propagated by its military government.
Which, of course, begs the question: when will the U.S. see fit to lift
the embargo? If Cuba is trending towards democracy and free markets, what
litmus test must be passed for the embargo to be rolled back?
The cost of the embargo to the United States is high in both dollar and
moral terms, but it is higher for the Cuban people, who are cut off from
the supposed champion of liberty in their hemisphere because of an
antiquated Cold War dispute. The progress being made in Cuba could be
accelerated with the help of American charitable relief, business
innovation, and tourism.
A perpetual embargo on a developing nation that is moving towards reform
makes little sense, especially when America's allies are openly hostile to
the embargo. It keeps a broader discussion about smart reform in Cuba
from gaining life, and it makes no economic sense. It is time for the
embargo to go.
Daniel Hanson is an economist at the American Enterprise Institute. Dayne
Batten is affiliated with the University of North Carolina Department of
Public Policy. Harrison Ealey is a financial analyst.
Original Source / Fuente Original:
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