Resolved: The United States should lift its embargo against Cuba.
In 1962 the U.S. imposed an embargo against Cuba in a time of deepening Cold-War with the "evils" of Communism and the seizure of U.S. assets by the Marxist-style regime of Fidel Castro. At the time, our goal was the punishment of Castro for seizing U.S. property. Since then, communism in the form of the Soviet bloc has collapsed and existential threats from a hostile Soviet puppet state have faded. Through the years the purpose and goals for keeping the embargo have evolved. Now, after all those decades we live in a world where the regime remains in power and Cuba enjoys free-trade with many other nations around the world while the citizens of the island remain poor with limited civil rights. Many blame the U.S. for conditions in Cuba. And so it is, under condemnation from allies and the United Nations, we present our case as to why that embargo must remain ... at least for now.
The Restrictions Need Tightened
The proponents of lifting the embargo believe erroneously, the best way to promote democracy in Cuba is open up economic engagement and drop travel restrictions. The argument is, engagement promotes the exchange of ideas and is key to the spread of democratization. In fact, U.S. tourism in Cuba is on the rise. Con acknowledges that fact.
Dead among the ashes of economic warfare, the embargo fails to prevent the channeling of hard currency from the US into Cuba. US funds find their way into Cuba through the following vehicles: US visitors to Cuba, remittances, US telecommunications payments, US food exports, and investments. Thus, one must question if the embargo is indeed effective in meeting its primary objectives. If so much hard currency is making it to the island, and the primary goal is to prevent that from happening, one must conclude it is not effective. Tourism is one of the largest sectors of the Cuban economy. Despite regulations and laws making it difficult to travel to and spend money in Cuba, the US has become the nation representing the second most tourists in Cuba. Further, even when faced with tougher scrutiny and indirect flights, the number of US tourists traveling to Cuba is rising continually. In fact, in 1999, President Clinton streamlined the process of travel abroad for students, athletes, and artists (among others) to help promote peopleto-people interaction between the US and Cubans. This was seen as a way to promote democracy and open discourse. Nevertheless, tourism is a whole [sic] in the embargo that the US must face.
In addition to the actions taken in 1999 to encourage people-to-people interaction, Cuba has long enjoyed such open interaction with close to 200 nations and their people, from around the world. And despite, all of that free-exchange, Cuba remains a repressive nation.
Others argue, with validity, that the embargo has failed to change the course or nature of the Cuban government. True, but it is also necessary to point out that the alternative policy of engaging with the Cuban government, pursued by the international community, has also failed to change the nature of that regime.
Currently over 190 nations engage economically and politically with Cuba, while the United States remains alone in enforcing economic sanctions. If the embargo is deemed a failure in changing the nature of the Cuban government, there are 190 cases of failure on the alternative policy of engagement. By a preponderance of evidence (190 to 1), it is clear that engagement with that regime has also been a dismal failure.
Even some in the U.S. Congress believe in the power of regime-change arising from tourism and open travel. But these claims are empirically denied.
U.S. Rep. Michael Honda argues that an influx of politically enlightened U.S. travelers to Cuba would put Havana in a difficult place, leading to their own people calling for change. However, this is erroneous. Due to the fractured and weakened state of the embargo, over 400,000 U.S. travelers visited Cuba in 2011, making the United States the second-largest source of foreign visitors after Canada, according to NPR’s Nick Miroff. Obviously, this influx of what has been theorized to be liberty-professing tourists has not resulted in an influx of such democratic ideals into this overwhelmingly federally controlled country.
With 190 examples of failure arising from open association with Cuba, there is no justification for lifting the embargo. In fact Con argues the embargo could be more effective if the U.S. closes some of the gaps in its existing policies.
Neither the embargo nor the engagement policy has produced a legitimate and tolerable Cuba in the Post-Cold War world. The US must work to maintain its leverage while integrating a policy that promotes positive change in Cuba. A nation ought not to replace embargo policy with a policy of engagement when engagement shows no greater promises of bringing about Cuban democratization. Instead, the first action needs to be closing up the loopholes in the embargo that render it ineffective at reaching its primary goal of blocking flows of hard US currency into Cuba. Furthermore, unconditional engagement must be avoided. US lawmakers need to create a modern hybrid policy to promote a peaceful democratization of Cuba. As power in Castro’s rule of Cuba is turned over to Raul, Cuba will continue to remain communist and centralized. It is not the single ruler system that it was once thought to be. Now, US policy requires reevaluation if there is to be a peaceful transition to democratization in Cuba, with the appropriate first step being for the US to enforce a reduction of immigration from Cuba.
Shifting the Blame
The idea that the U.S. embargo was somehow responsible for the collapse of the Cuban economy and poor conditions under which the majority of Cubans are forced to live, has no logical basis whatsoever. Any Cuban, economic losses which occurred when the embargo was put in place were soon filled by other nations which benefited from filling the gap left by the U.S. In fact, there is another more compelling reason for the collapse of the Cuban economy.
The collapse of the Cuban economy can be clearly traced to its communal ideology and actions when the Cuban Revolution abolished all private property rights. That experiment resulted in an economically bankrupt dystopian society featuring an enormously repressive system, and a government with unlimited power over its citizens.
What exactly is it about the embargo that keeps the Cuban government from allowing economic and political freedoms in Cuba? Allowing economic and political freedoms is entirely within the domain of Cuba’s government. It is not, in any way, impeded by US policy. Cuba’s abysmal sociopolitical and economic conditions are the direct result of the failed policies of the Cuban government, and not of the so-called failed policies of the US government.
Actually, because of the fact other nations have filled the gap, a wide range of consumer products are available in Cuba including many U.S. branded items. But the Cuban government requires other nations to trade in U.S. dollars while circulating devalued Cuban currency to the regime's citizens leaving them with little purchasing power.
The Cubans can buy any products, including food and medicine from any country in the world. Dollar stores in Cuba have numerous U.S. products, including Coca-Cola, and other symbols of American consumerism. American dollars can purchase almost anything in Cuba.
There are shortages in Cuba of fruits, vegetables, potatoes, bananas, mangos, boniatos, and other foodstuffs that have been traditionally produced locally. What do these shortages have to do with the U.S. embargo? The reason for Cuba’s economic suffering is a Marxist system that discourages incentives. As in Eastern Europe under Communism, the failed Communist system is the cause of the economic suffering of the Cubans, not the U.S. embargo.
Cuban Debt Risk
To make matters worse Cuba does not pay its bills. It is heavily in debt forcing it to restructure its debt and make deals offering to pay off its debts with rum. While it is making some progress, Cuba is still viewed as at high risk of defaulting on its payment obligations.
The U.S. should not normalize trade with the Castro regime for the plain and simple reasons that his ventures lose money and his government is an international “deadbeat.” Any economic partnerships with authoritarian regimes are morally suspect, but making deals with the Castro government is pouring billions of dollars down the drain. In 1986, Cuba defaulted on its multibillion dollar debt to the Paris Club of nations. That debt is now estimated to be around $37 billion and the Castro government refuses to pay it. A couple of months ago, Russia had to write off 90 percent of Cuba's $32 billion debt. That’s almost $29 billion dollars that Castro will never pay back to Moscow. In November, Mexico wrote off $340 million of Cuba’s debt to its development bank, Bancomext. It is no wonder that, according to Moody’s, Cuba’s credit rating is Caaa1, which means worse than highly speculative and a “substantial risk” to investors.
It makes no business sense to drop the embargo for the sake of trading with a government that reneged on so many loans its credit rating is now at the subprime or “junk bond” level. Yet, loans are what would be necessary to “normalize” relations with Cuba. The embargo allows for U.S. food and humanitarian supplies to be sold to Cuba. In fact, the U.S. is currently the fifth largest exporter to Cuba. The big difference is that, according to the embargo, the Castro government must pay for all U.S. imports with cash, no credit allowed.
One again, we see how it is the Cuban government policies, not the embargo which imperils the citizens of Cuba and contributes to their economic hardships. Penaloza explains, if anything, U.S. policy has actually been beneficial to Americans by avoiding doing business with Cuba.
The oft-repeated rhetoric that the embargo has “exacerbated the hardships” of the Cuban people is untrue. The Castros' totalitarian system of governance, which has created economic, sociopolitical and spiritual impoverishment, is the veritable culprit, not the embargo. Fifty-five years of global trade with Cuba refutes allegations of enforced isolation. Given Castro’s propensity to default on loans, the embargo has actually saved U.S. taxpayers millions of dollars by denying the corrupt regime easy credit.
Benefits to the Few
The inner workings of a government owned economy needs to be understood. All major businesses, and production sectors in Cuba are stated-owned and thus it is the state which reaps the profits. Moreover, we have already shown how the Cuban state avoids the losses by simply refusing to pay. A principle argument against lifting the embargo, is understanding the money will directly to the regime.
This brings us to the most overlooked and dangerous factor in trading with Cuba. Most of the Cuban economy is owned by the Castro government and all foreign trade is channeled through agencies that support the regime. For example, all foreign companies must pay wages in hard currency (dollars or euros) to the Cuban government, and from those wages the state pays in local currency (Cuban pesos) a small percentage to the individual employees. As a report by the Brooking Foundation described it: “If the firm pays the employment agency $500 a month and the employment agency pays the workers 500 pesos, over 90 percent of the wage payment disappears in the currency conversion; the effective compensation is instantly deflated to $21 per month.” Brookings said this may be “the world’s heaviest labor tax.” Or as one Cuban worker disclosed: “In Cuba, it’s a great myth that we live off the state. In fact, it’s the state that lives off of us.”
Indeed many of the anti-American activities and adventurism ( see this article ) seen as late as the 1980s has been repressed by the ongoing embargo and the willingness of the U.S. to confront the regime. By lifting the embargo, it is argued the regime will be empowered.
Without major internal reforms in Cuba, the Castro government and the military, not the Cuban people, will be the main beneficiary of the lifting of the embargo. While some prosperity may trickle down to the Cuban people, state enterprises, many now under military control, will benefit most. The Castro regime will use this newly-acquired wealth to strengthen its hold on the Cuban people, to rebuild its military apparatus, and to engage again in supporting anti-American terrorist and violent groups in Latin America and elsewhere.
The Castro regime backed by its military enforcers have cast a wide net of repression and put a stranglehold on the Cuban economy. Even those who think easing travel restrictions and promoting tourism is a harmless form of engagement are mistaken. All sectors of the Cuban economy are ensnared.
The transformative power of free trade is not to be denied, but trade with Cuba isn’t free. There is no Cuban parallel to the economic openness and flourishing private sector that has transformed China. Jerry Haar, a dean of business administration at Florida International University, observes in the Latin Business Chronicle that one unavoidable fact of life faces exporters to Cuba: “The entire distribution chain is in the hands of the Cuban military and intelligence services.” Foreign investors are compelled to deal with the state and its subsidiaries, since they control the “hotels, foreign trade operations, equipment sales, and factories.”
As long as the Castros maintain their stranglehold on the Cuban economy, enriching that economy enriches — and entrenches — them. The travel ban and embargo have not ended Cuba’s misery, but lifting them unilaterally will only make that misery worse. Rewarding the dictators who keep Cuba in chains is not the way to set Cubans free.
The combination of economic embargo and U.S. and Cuban government policies have reaped benefits for the environment. Generally speaking the waters between the U.S. and Cuba remain clean and coral reefs are thriving, but if the U.S. lifts sanctions the environment may suffer.
[Dr. David] Guggenheim readily admits the embargo was a "failed policy," but under the embargo, Cuba's environment—namely its pristine national parks and coral reefs—has thrived. He cites the fact that "Cuba has protected 25 percent of its marine waters compared to the worldwide average of one percent." So, the question going forward will be: Can Cuba maintain its pristine environment after it's opened up to the U.S. and the rest of the world?
For several years, with encouragement from Cuba, many international interests have focused on the deep-water oil reserves in the Gulf of Mexico. Cuba has refineries. After all, it seized them from U.S.-based companies, and it is anxious to make deals to tap the Gulf reserves and sensing a political change from the many calls to end the embargo, international concerns are positioning themselves to reap the rewards.
Clearly, foreign oil companies anticipate political changes in Cuba and are trying to position themselves accordingly. It is equally clear they are encountering legal and logistical obstacles preventing oil and gas exploration and development. Among the impediments are well-founded reservations as to how any new discovery can be turned into product. Cuba has very limited refining capacity, and the U.S. embargo prevents sending Cuban crude oil to American refineries. Neither is it financially or logistically viable for partners of the current Cuban regime to undertake deep-water exploration without access to U.S. technology, which the embargo prohibits transferring to Cuba. The prohibitions exist for good reason. Fidel Castro expropriated U.S. oil company assets after taking control of Cuba and has never provided compensation.
Equally important, foreign companies trying to do business with Cuba still face a lot of expenses and political risks. If, or when, the Cuban regime decides again to expropriate the assets of these companies, there is no legal recourse in Cuba.
It was a mere seven years ago when a blowout under the B.P.-financed Deepwater Horizon rig, spilled an estimated 4.9 million barrels of crude into the pristine waters of the Gulf causing untold environmental damages to the waters and seabed. Lifting the embargo, could encourage more drilling which is not under the purview of U.S. regulations. It is a recipe for environmental disaster and the U.S will pay the price.
Lack of Political Will
If there is one thing that Obama's recent overtures toward Cuba has taught us, it is there is little political will on the part of the repressive Cuban regime to relinquish its grip on the nation. If anything, even the mere suggestion of normalization entrenches the regime.
The fruits of Obama’s U.S.-Cuba policy has been an “annus horribilis” of over 8,600 short-term arbitrary detentions, weekly beatings of peaceful protesters, extrajudicial killings, long-term incarceration of political opponents, and a migratory crisis involving a number of Latin-American nations. The Cuban government has demonstrated a clear unwillingness to embrace free markets or incorporate judicial safeguards for business investments. The political opposition, fully cognizant that commerce without civil liberties is meaningless, seeks a restoration of their political rights and civil liberties.
The voices of Cuba’s dissidents and exiles, ignored and marginalized, must be respected and acknowledged
It would seem that regime change is the only path forward to achieving justice for the harms perpetrated by the Castro government. But until that happens, the U.S. also has no political will make any major changes.
The top Republican in the U.S. Congress dimmed hopes that lawmakers might end the embargo on Cuba after President Barack Obama leaves office, saying on Tuesday he intends to keep the trade restrictions in place.
"As the past two years of normalizing relations have only emboldened the regime at the expense of the Cuban people, I fully intend to maintain our embargo on Cuba," U.S. House of Representatives Speaker Paul Ryan said in a statement.
Cuba is Not Ready
There are many examples of how the U.S. has moved from imposing sanctions on former enemies and hostile actors to opening the avenues of free-trade and diplomatic normalization. The Pro side will no doubt be happy to cite examples. But in each of those cases, there was some bilateral interest in changing the status quo and advancing beyond hostilities. At this point, our objectives for the embargo are mostly political. There is very little economic benefit to be gained from trade with Cuba. In fact, it risks harming our trade relations with other regional interests.
Given Cuba’s scant foreign exchange, its ability to buy U.S. products remains very limited. Cuba’s major exports, i.e. sugar, tobacco, nickel, citrus, are neither economically nor strategically important to the United States.
Lifting the embargo would create severe market distortions in the already precarious economies of the Caribbean and Central America since the U.S. would have to divert some portion of the existing sugar quota away from these countries to accommodate Cuba. The impact of tourism diversion toward Cuba would profoundly hurt the economies of the Caribbean and Central American countries.
Cuba, cited as one of the worst political and commercial risks in the world by several recently issued country risk guides, lags far behind China and Vietnam in establishing the necessary conditions for economic development and successful corporate involvement. Current foreign investments are small and limited to dollar sectors of the economy such as the tourist industry and mining. American companies are not “losing out.” In a free Cuba, U.S. companies will quickly regain the prominent role they held in pre-Castro Cuba.
We need to stay the course and remain vigilant for signs of real change on the part of the Cuban government. Until then, the embargo remains.
Despite calls for its revocation, the embargo’s purpose is as important now as when it was enacted. Cuba is still an oppressive country. Cubans may not leave the country without permission and still lack fundamental freedoms of expression. José Miguel Vivanco, the director of Americas division at Human Rights Watch, notes that as “Cuba’s draconian laws and sham trials remain in place, [the country] continue[s] to restock the prison cells with new generations of innocent Cubans who dare to exercise their basic rights.” Moreover, a recent proposal by the Cuban Communist Party makes clear that there will be no change in the country’s oppressive one-party political system. In doing so, the lengthy document declares “[o]nly socialism is capable of overcoming the current difficulties and preserving the victories of the revolution.” Cuba’s treatment of its own citizens is a situation the United States cannot ignore. The embargo’s twin goals of backing democracy and ending oppressive rule have not been met. Until they are, the embargo must remain in place.
For all these reasons and more...
We urge a Con ballot.
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