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trade embargo

United States embargo against Cuba

The United States Embargo Against Cuba (described in Cuba as el bloqueo, Spanish for "the blockade") is an economic, commercial, and financial embargo imposed on the Castro government on February 7, 1962. The embargo was enacted after the Castro government expropriated the properties of United States citizens and corporations (notably those that belonged to the United Fruit Company and the ITT).

The embargo was codified into law in 1992 with the stated purpose of "bringing democracy to the Cuban people", and in fact is entitled the Cuban Democracy Act. In 1996 Congress passed the Helms-Burton Act which further restricted United States citizens from doing business in or with Cuba, and mandated restrictions on giving public or private assistance to any successor regime in Havana unless and until certain claims against the Cuban government are met. In 1999, U.S. President Bill Clinton modified the trade embargo by requiring that foreign subsidiaries of U.S. companies stop trading with Cuba. He also authorized the sale of certain US products to Cuba.

At present, the embargo, which limits American businesses from conducting business with Cuban interests, is still in effect and is the most enduring trade embargo in modern history. Despite the existence of the embargo, the United States is the seventh largest exporter to Cuba (4.3% of Cuba's imports are from the US).

Before the embargo

See main article Cuba-United States relations
The United States of America and Cuba have a long history of close economic and political ties. Though Cuba had been a Spanish colony for nearly 400 years, the island had developed increasing trade links with the United States during the 19th century. In December of 1898, Spain ceded control of Cuba to the U.S. following its defeat in the Spanish-American War.

The U.S. assisted Cuba in its liberation from Spain in 1902, yet frequently intervened in Cuban political affairs. There was substantial U.S. investment in Cuban production of sugar and tobacco for export, and in tourism, as well as preferential access for Cuban exports to the United States. By 1926 U.S companies owned 60% of the Cuban sugar industry and imported 95% of the total Cuban crop. After liberation, the Cuban economy grew dramatically, particularly in tourism, as incomes rose and Cuba developed for the first time in its history a substantial and prosperous middle class. The Cuban Revolution of 1959 saw the overthrow of General Fulgencio Batista and the rise to power of Fidel Castro. The U.S. government formally recognized the new Cuban administration, but relations were to deteriorate rapidly as the Cuban government passed the first Agrarian Reform Law, allowing for the expropriation of large-scale (largely American-owned, acquired via American right-to-intervention in Cuba's constitution at the time) land holdings. The compensation offered (based on 20-year bonds at 4.5% interest for the tax-declared value) was seen as inadequate, and was rejected by American interests. What also worried the American government was that by the end of 1959 there was evidence of a Cuban-Soviet rapprochement. During 1960, tensions between Cuba and the US escalated into economic warfare. Each time the government took control of American properties, the American government countered, with the end result the prohibition of all exports to Cuba on October 19, 1960.

History

A U.S. arms embargo had been in force since March 1958 when armed conflict broke out in Cuba between rebels and the Batista government. In July 1960, in response to the expropriations by the Cuban government, the United States reduced the Cuban import quota of sugar by 7,000,000 tons; the Soviet Union responded by agreeing to purchase the sugar instead, and Cuba took further actions to take over American businesses. In response to Cuba's alignment with the Soviet Union during the Cold War, President John F. Kennedy extended measures by Executive Order, first widening the scope of the trade restrictions on February 7 (announced on February 3 and again on March 23, 1962). According to former aide, Kennedy asked him to purchase a thousand Cuban cigars for Kennedy's future use immediately before the extended embargo was to come into effect. Salinger succeeded, returning in the morning with 1,200 Petit H. Upmann cigars, Kennedy's favorite cigar size and brand. Following the Cuban Missile Crisis, Kennedy imposed travel restrictions on February 8, 1963, and the Cuban Assets Control Regulations were issued on July 8, 1963, under the Trading with the Enemy Act in response to Cubans hosting Soviet nuclear weapons, which led to the Cuban Missile Crisis. Under these restrictions, Cuban assets in the U.S. were frozen and the existing restrictions were consolidated.

Multilateral sanctions were imposed by the Organization of American States (OAS) on July 26, 1964, but these were abandoned on July 29, 1975.

The restrictions on U.S. citizens traveling to Cuba lapsed on March 19, 1977; the regulation was renewable every six months, but President Jimmy Carter did not renew it and the regulation on spending U.S. dollars in Cuba was lifted shortly afterwards. President Ronald Reagan reinstated the trade embargo on April 19, 1982. This has been modified subsequently with the present regulation, effective June 30, 2004, being the Cuban Assets Control Regulations, 31 C.F.R. part 515. The current regulation does not limit travel of US Citizens to Cuba per se, but it makes it illegal for US Citizens to have transactions (spend money or receive gifts) in Cuba under most circumstances without a US government Office of Foreign Assets Control issued license.

The 1963 U.S. embargo was reinforced in October 1992 by the Cuban Democracy Act (the "Torricelli Law") and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms-Burton Act) which penalises foreign companies that do business in Cuba by preventing them from doing business in the US. The justification provided for these restrictions was that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States.

The European Union resents the Helms Burton Act because it felt that the US was dictating how other nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in favor of negotiating a solution.

After the shootings of the Brothers to the rescue planes in 1996, a bi-partisan coalition in the United States Congress approved the Helms-Burton Act. The Title III of this law also states that any non-U.S. company that "knowingly trafficks in property in Cuba confiscated without compensation from a U.S. person" can be subjected to litigation and that company's leadership can be barred from entry into the United States. Sanctions may also be applied to non-U.S. companies trading with Cuba. This restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. It's important to note that this title includes waiver authority, so that the President might suspend its application. This waiver must be renewed every six months and it has traditionally been. It was renewed for the last time July 17, 2006, therefore the suspension of this provision will remain effective for, at least, another six months following that date.

In response to pressure from some American farmers and agribusiness, the embargo was relaxed by the Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress in October 2000 and signed by President Bill Clinton. The relaxation allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. Although Cuba initially declined to engage in such trade having even refused US food aid in the past, seeing it as a half-measure serving U.S. interests, Castro began to allow the purchase of food from the U.S. as a result of Hurricane Michelle in November 2001. These purchases have continued and grown since then. In 2007, the US was the largest food supplier of Cuba and its 6th largest trading partner.

Spurred by a burgeoning interest in the assumed untapped product demand in Cuba, a growing number of free-marketers in Congress, backed by Western and Great Plains lawmakers who represent agribusiness, have tried each year since 2000 to water down or completely erase regulations preventing Americans from traveling to Cuba. Four times over that time period the United States House of Representatives has adopted language lifting the travel ban, and in 2003 the U.S. Senate followed suit for the first time. However, each time President George W. Bush, has threatened to veto the bill. Faced with a veto threat, each year Congress has dropped its attempt to lift the travel ban. United States nationals can circumvent the ban by traveling to Cuba from a different country (such as Mexico, The Bahamas or Canada), as Cuban immigration authorities do not stamp passports. In doing so, they would risk prosecution by the U.S. government if discovered. On October 10, 2006 the United States announced the creation of a task force made up of officials from several US agencies that will pursue more aggressively violators of the US trade embargo against Cuba, with penalties as severe as 10 years of prison and thousands of dollars in fines for violators of the embargo.

Criticism

Many Cubans oppose the embargo, arguing that it attacks the economic resources of Cuba's people rather than its government. Economic damage resulting from the embargo might be partially responsible for endemic food shortages and transportation difficulties in Cuba. Yet, food imports from the United States have increased in recent years.

Academics outside of Cuba have also criticized the embargo for its effects on food, clean water, medicine, and other economic needs of the Cuban population. It has also been linked to shortages of medical supplies and soap which have resulted in a series of medical crises and heightened levels of infectious diseases. It has also been linked to epidemics of specific diseases, including neurological disorders caused by poor nutrition and blindness. 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. Malnutrition and disease resulting from increased food and medicine prices have affected men and the elderly in particular due to a rationing system which gives preferential treatment to women and children.

The Helms-Burton Act has been the target of criticism from Canadian and European governments in particular, who resent the extraterritorial pretensions of a piece of legislation aimed at punishing non-U.S. corporations and non-U.S. investors who have economic interests in Cuba. In the Canadian House of Commons, Helms-Burton was mocked by the introduction of the Godfrey-Milliken Bill, which called for the return of property of United Empire Loyalists seized by the American government as a result of the American Revolution (the bill never became law). Furthermore, the European Parliament in 1996 passed a law making it illegal for EU citizens to obey the Helms-Burton act. The European Council:

while reaffirming its concern to promote democratic reform in Cuba, recalled the deep concern expressed by the European Council over the extraterritorial effects of the "Cuban Liberty and Democratic Solidarity (Libertad) Act" adopted by the United States and similar pending legislation regarding Iran and Libya. It noted the widespread international objections to this legislation. It called upon President Clinton to waive the provisions of Title III and expressed serious concern at the measures already taken to implement Title IV of the Act. The Council identified a range of measures which could be deployed by the EU in response to the damage to the interests of EU companies resulting from the implementation of the Act. Among these are the following:

  1. a move to a WTO dispute settlement panel;
  2. changes in the procedures governing entry by representatives of US companies to EU Member States;
  3. the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
  4. the establishment of a watch list of US companies filing Title III actions.

Some libertarian and conservative critics argue that the embargo actually helps Castro more than it hurts him by giving him a scapegoat he can use to blame for all of Cuba's problems, George P. Shultz who served as Secretary of State under Reagan has gone as far as to call the continued embargo "insane.

American business leaders and free marketers in particular argue that, as long as the embargo continues, non-U.S. foreign businesses in Cuba do not have to compete with U.S. businesses and thus will have a head start when and if the embargo is ended. They openly call for an end to the embargo.

The 1998 US State Department in the report Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba argued that the U.S. embargo has added, at most, relatively small increases in transportation costs. It claims that the main problem is not the embargo but the lack of foreign currency due to the unwillingness to liberalize the economy, diversify the export base, and the need to pay off substantial debts owed to its Japanese, European, and Latin American trading partners acquired during the years of abundant Soviet aid.

Religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic hardships the embargo imposes on Cubans. Pope John Paul II called for the end to the embargo during his 1979 pastoral visit to Mexico, and again during his 1998 visit to Cuba. Patriarch Bartholomew I called the embargo a "historic mistake" while visiting the island on January 25, 2004. United States religious leaders have also opposed the embargo. A joint letter in 1998 from the Disciples of Christ and the United Church of Christ to the U.S. Senate called for the easing of economic restrictions against Cuba. Rev. Jesse Jackson, Rev. Al Sharpton, and Minister Louis Farrakhan have also publicly opposed the embargo. On May 15, 2002 former President Jimmy Carter spoke in Havana, calling for an end to the embargo, saying "Our two nations have been trapped in a destructive state of belligerence for 42 years, and it is time for us to change our relationship."

The United Nations has condemned the embargo as a violation of international law since the 1990s. In 2002, for example, the United Nations condemned the embargo by 173 votes to 3. The Foreign Minister of the Republic of Cuba, Perez Roque called the embargo 'an act of genocide'. Cuba has also denounced as "theft" the use of frozen Cuban assets to pay for lawsuits filed in the US against the Republic of Cuba.

In addition to the Cuban authorities, film director Michael Moore has also challenged the embargo by bringing 9/11 rescue workers in need of health care to Cuba to obtain subsidized health care.

Recent US polling indicates that the American public is ambivalent about continuing the embargo. For instance, a 2007 AP/Ipsos Poll indicates that 48% of Americans favor continuing the embargo, against 40% who favor ending it. Interestingly the same poll revealed that, despite overwhelmingly unfavorable opinions of Fidel Castro (6% favorable vs. 64% unfavorable), Americans strongly believe that diplomatic relations should be re-established with his government (62% in favor, 30% opposed).

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References

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