Mon, May 28, 2012, 2:51 PM EDT - U.S. Markets closed for Memorial Day

No cigar: Economic embargo on Cuba turns 50

Just 90 miles away, it's close but no cigar for US business as embargo on Cuba turns 50

HAVANA (AP) -- When it started, American teenagers were doing "The Twist." The United States had yet to put a man into orbit around the Earth. And a first-class U.S. postage stamp cost 4 cents.

The world is much changed since the early days of 1962, but one thing has remained constant: The U.S. economic embargo on communist-run Cuba, a near-total trade ban that turned 50 on Tuesday.

Supporters say it is a justified measure against a repressive government that has never stopped being a thorn in Washington's side. Critics call it a failed policy that has hurt ordinary Cubans instead of the government.

All acknowledge that it has not accomplished its core mission of toppling Fidel and Raul Castro.

"All this time has gone by, and yet we keep it in place," said Wayne Smith, who was a young U.S. diplomat in Havana in 1961 when relations were severed and who returned as the chief American diplomat after they were partially re-established under President Jimmy Carter.

"We talk to the Russians, we talk to the Chinese, we have normal relations even with Vietnam. We trade with all of them," Smith said. "So why not with Cuba?"

In the White House, the first sign of the looming embargo came when President John F. Kennedy told his press secretary to go buy him as many H. Upmann Cuban cigars as he could find. The aide came back with 1,200 stogies.

Kennedy announced the embargo on Feb. 3, 1962, citing "the subversive offensive of Sino-Soviet communism with which the government of Cuba is publicly aligned."

It went into effect four days later at the height of the Cold War, a year removed from the failed CIA-backed Bay of Pigs invasion meant to oust communism from Cuba and eight months before Soviet attempts to put nuclear missiles on the island brought the two superpowers to the brink of war.

Washington already had some limited sanctions in place, but Kennedy's decision was the beginning of a comprehensive ban on U.S. trade with the island that has remained more or less intact ever since.

Little was planned to mark Tuesday's anniversary, but Cuban-American members of Congress issued a joint statement vowing to keep the heat on Cuba.

Supporters of the policy acknowledge that many U.S. strategic concerns from the 1960s have been consigned to the dustbin of history, such as halting the spread of Soviet influence and keeping Fidel Castro from exporting revolution throughout Latin America. But they say other justifications remain, such as the confiscation of U.S. property in Cuba and the need to press for greater political and personal freedoms on the island.

"We have a hemispheric commitment to freedom and democracy and respect for human rights," said Jose Cardenas, a former National Security Council staffer on Cuba under President George W. Bush. "I still think that those are worthy aspirations."

With just 90 miles (145 kilometers) of sea between Florida and Cuba, the United States would be a natural No. 1 trade partner and source of tourism. But the embargo chokes off most commerce, and the threat of stiff fines keeps most Americans from sunbathing in balmy resorts like Cayo Coco.

Cuba is free to trade with other nations, but the U.S. threatens sanctions against foreign companies that don't abide by its restrictions. A stark example arrived off the coast of Havana last month: A massive oil exploration rig built with less than 10 percent U.S. parts to qualify under the embargo was brought all the way from Singapore at great expense, while comparable platforms sat idle in U.S. waters just across the Gulf of Mexico.

The embargo is a constant talking point for island authorities, who blame it for shortages of everything from medical equipment to the concrete needed to complete an eight-lane highway spanning the length of the island. Cuba frequently fulminates against the "blockade" at the United Nations and demands the U.S. end its "genocidal" policy.

Every fall, like clockwork, the vast majority of nations agree, and overwhelmingly back a resolution condemning the embargo. In November, 186 countries supported the measure, with only Israel joining the U.S. in opposition.

Also each year, Cuba updates its estimate of how much the embargo has cost it, using a complicated — and some say flawed — calculus that takes into account years of interest, the end of the gold standard and other factors. Last year's estimate summing 49 years of sanctions was $975 billion.

Even some critics of the embargo call Havana's claims exaggerated, saying that while the sanctions had a tremendous impact when first put in place, Cuba was able to adapt and benefited from relationships with like-minded allies such as the former Soviet Union and Venezuela.

"There's no doubt that the embargo is detrimental to the Cuban economy. It complicates international financial transactions, but more importantly, it limits Cuban families' access to medicine," said Geoff Thale, a Cuba analyst at the Washington Office on Latin America, which supports ending the policy. "At the same time, Cuba's economic problems go beyond the embargo."

While 50 years of socialism have brought advancements in areas such as education and health care, even island authorities acknowledge their perennially struggling economic system must change. President Raul Castro is in the process of allowing more private-sector activity, decentralizing state-run businesses, implementing agricultural reform and slimming government payrolls.

The United States actually does have significant trade with Cuba under a clause allowing the sale of food products and some pharmaceuticals.

According to the most recent information available from Cuba's National Statistics Office, the U.S. was the island's seventh-largest trading partner in 2010, selling $410 million in mostly food products. However, that was down from nearly $1 billion in 2008, as the island increasingly turned to other countries that don't force it to pay cash up front.

Many U.S. businesses would love to be allowed into the Cuban market, but an end to the embargo seems a long way off.

The issue is seen as a political nonstarter in the United States, where every four years, presidential candidates take turns courting the Cuban-American vote in Florida, a key swing state.

President Barack Obama has said Raul Castro's economic openings are insufficient, and it's unlikely he would do anything in an election year to risk losing support in Florida, which he won in 2008. Even if he wanted to lift the embargo, the Helms-Burton Act of 1996 stipulates that it would have to be approved by Congress.

Raul Castro, for his part, says recent changes in the U.S. such as allowing Cuban-Americans to visit relatives more often and send them more money are merely cosmetic.

Backers of the sanctions say it's as important as ever to maintain what they call the moral high ground, saying islanders will be grateful whenever change does come.

Critics cite the annual U.N. votes to argue that times have changed and the embargo is a Cold War relic that ought to be thrown onto the scrap heap.

"It's no longer a matter of the United States leading a movement to isolate Cuba in the hemisphere," said Smith, a staunch opponent of the embargo. "Quite the contrary: If anyone's isolated, on this issue anyway, it's us."

___

Follow Peter Orsi on Twitter at www.twitter.com/Peter(underscore)Orsi.

 

46 comments

  • Henry  •  3 months ago
    The reason for the embargo is El Presidente Castro's continued refusal to move toward "democratization and greater respect for human rights." How is it then possible the USA considers Communist China to be a reasonable trade partner?

    $$$$$$$$$$$$$$ China is laughing at us. You think?
    • DEMOJIM 3 months ago
      not to mention free trade agreements with (Communist) Viet Nam .. I don't get it
    • Erik 3 months ago
      Nobody ever said US foreign policy makes sense.
  • paul b and sue b  •  Salem, Oregon  •  3 months ago
    we will probably be trading with north korea before we trade with cuba ------ makes lots of sense, huh?
    • Alan 3 months ago
      kim il drove a cadillac. He traded alot with us. He just would let his people trade with us
  • Daniel  •  San Diego, California  •  3 months ago
    This is stupid...we trade with a lot of communist countries...and not Cuba...only because of the Cubans in Florida....have a lot of pull...total crap!
  • George  •  Atlanta, Georgia  •  3 months ago
    This embargo was right when it started. Cuba wanted to house nuclear missiles aimed at the US. That's long gone. Let it go. Time to work with not against Cuba.
  • Stymie  •  Santa Clara, California  •  3 months ago
    I wish the US would get their head outta their #$%$ and drop the trade embargo. That was 50 years ago and it's high time we quit playing the school yard bully. We have free trade agreements with #$%$ near every country on earth, except Iraq or is it Iran, either way it makes no sense. We want some Cuban cigars and to be able to visit that country freely.
  • NITRO  •  Salinas, California  •  3 months ago
    We are allowing travel to Cuba and over the years American Cubans have been able send money to their relatives in Cuba. Lets just call it quits and tell the Cubans that if they open their real estate to a world market as they just have to their population a free market is available to them. It has to be fair to all with assurances that a government take over won't happen that Fidel did after the communist take over. The opening of the market will benefit the Cuban economy and allow families reunite. Cuba is not a risk anymore, but if we don't more Chavez of Venezuala is looking for a colony.
    • DixieSam 3 months ago
      If both countries compromise we could extend I-95 to Havana
    • NITRO 3 months ago
      Not a bad idea , this will extend the Keys and you would have your car to sell them fly back with a profit in the pocket.
  • Eccentric_Crank  •  Reno, Nevada  •  3 months ago
    A shining example of how well 'sanctions' work as a policy tool
  • Joe  •  Baltimore, Maryland  •  3 months ago
    Cuban mafia which was run out of Cuba to Miami is still the money behind the political scenes to keep the embargo against Cuba. They still want back what they originally gained and owned there by the corruption that pre-existed Castro's coming to power. They still dream of getting it and the power there all back for themselves.
  • WalterM6  •  3 months ago
    Sounds like a little insider trading with that cigar deal. Plus they became illegal to own.
  • Larry M  •  3 months ago
    How stupid. Open up trade with Cuba and help there people enjoy a better life. China is communists, but because they make cheap crap for us, that's different. End this nonsense NOW.
  • Stymie  •  Santa Clara, California  •  3 months ago
    Did I mention this is total #$%$??
  • D  •  3 months ago
    I just want the 1955 Chevy.
  • A Yahoo! User  •  3 months ago
    American stupidity. Next will be Iran. America will realize in 2062, that "it was a stupid action".
  • Running Elk  •  Richardson, Texas  •  3 months ago
    Will stay in place as long as the Cuban Mafia stays entrenched in "Little Havana" down in Florida. They seem to still have a lot of political influence.
  • Alan  •  Parsippany, New Jersey  •  3 months ago
    We really need to get over it already. This got stupid about twenty years ago.
  • hansro  •  3 months ago
    The only ones suffering are the Cuban families. Castro and Raul are living well. Do those families a favor and lift the embargo. Its about time!!
  • MitchellT  •  Tucson, Arizona  •  3 months ago
    Our Cuba policy may be our longest running foolishness.
  • Charlene  •  Pleasanton, California  •  3 months ago
    The embargo is just another example of how broken America is. The politicians are more interested in getting a few votes rather than changing a fifty year old failed foreign policy. Vote them all out!
  • Larry M  •  3 months ago
    Wouldn't it be nice to have a friend who is only miles from your border? This embargo has been going on too long. It's like a law was past but is now outdated, but no one wants to take it off the books. Imagine how much better off the people of Cuba would be if trade was opened. We really showed castro who's boss. 50 years, talk about stubborn.
  • PC  •  3 months ago
    The trade embargo will end when oil is found in Cuba .......... .
 
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