Castro again defaults on payments to Paris Club, but purchases more US products for cash than under Obama thaw

What the Chamber of Commerce won't tell you about trade with the Castro regime.

Under the Trump Administration trade has increased with Cuba.

Taken from CubaBrief

The United States since 2000 has not provided credits to the Castro regime and maintained a cash in advance trade arrangement for the purchase of agricultural and pharmaceutical products. This protects U.S. taxpayers from having to subsidize the Cuban dictatorship when it defaults on its financial obligations. Their European, Latin American and Asian counterparts cannot say the same to their respective taxpayers.

Under this cash in advance agreement American companies sold over $6.3 billion to the Castro regime and have gotten paid. Despite billions in debt forgiveness  on its restructured debt less than five years ago by the Paris Club, the Cuban dictatorship in 2019 again defaulted on its payments, reported Reuters on February 11, 2020.

How did the Castro regime raise the money to purchase U.S. goods?

James Prevor, President and Editor in Chief of the publication Produce Business in the October 2002 article, Cuba Caution, reported that Cuba "had exhausted all its credit lines and, at best, was simply rotating the accounts. When the opportunity came to buy from the United States, Cuba simply abandoned all those suppliers who supported the country for 40 years and began buying from us."

The suppliers were not the ones impacted by Cuba's failure to pay its debts, the taxpayers of the suppliers' home countries were the one's left holding the bag. The dirty little secret is that profit is private but risk has been socialized in what amounts to a perversion of capitalism.

On November 1, 2013 the government of Mexico announced that it was ready to waive 70 percent of a debt worth nearly $500 million that Cuba owes it. The former president of Mexico Vicente Fox protested the move stating: “Let the Cubans get to work and generate their own money…They’re normally like chupacabras.  The only thing they’re looking for is someone to give them money for free.”

“Let the Cubans get to work and generate their own money…They’re normally like chupacabras." - President Vicente Fox

In December 2015 it was announced that Spain would forgive $1.7 billion that the Castro regime owes it. In December of 2013, Russia and Cuba quietly signed an agreement to write off $29 billion of Cuba's debt to the former superpower. Western governments pursued Cuban maritime debts seizing Cuban vessels and negotiating payment through Canadian courts.

The 2015 debt restructuring accord between Cuba and the Paris Club, according to Reuters, "forgave $8.5 billion of $11.1 billion, representing debt Cuba defaulted on in 1986, plus charges."

The 19-member Paris Club owed money by Cuba is comprised of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland. Companies, with the exception of American companies, doing business with Cuba when they are not paid pass the costs off to their respective governments, who in turn pass the costs off to taxpayers.

This is something to consider when the Chamber of Commerce argues that U.S. laws should be changed and the United States should join the long line of governments seeking to collect from the Castro regime, a deadbeat dictatorship.

Lastly, it is important to note that the U.S. Census Bureau documented the collapse of trade in goods with Cuba under the Obama thaw and have actually improved during the Trump Administration, despite tightened sanctions.

U.S. Treasury Cuba Announcement in brief: "U.S. taxpayers get ready to pick up the tab for the Castro regime."

"They’re normally like chupacabras.  The only thing they’re looking for is someone to give them money for free." - Vicente Fox, Former Mexican President, in 2015 on the Castro regime

 
Today's press release from the Treasury Department appears innocuous titled: "Treasury and Commerce Announce Further Amendments to the Cuba Sanctions Regulations"  as does the "subheading Amendments Further Implement President Obama’s Policy Related to Easing of Sanctions on Cuba."  However the devil is in the details reproduced below from paragraph six:

Financing–

Removing financing restrictions for most types of authorized exports.

• Restrictions on payment and financing terms for authorized exports and reexports, except for agricultural commodities and agricultural items, will be removed, and U.S. depository institutions will be authorized to provide financing, including, for example, issuing a letter of credit for such exports and reexports.  Currently, payment and financing terms for all authorized exports are restricted to cash-in-advance or third-country financing.  Effective January 27, 2016, examples of permissible payment and financing terms for authorized non-agricultural exports and reexports will include: payment of cash in advance; sales on an open account; and financing by third-country financial institutions or U.S. financial institutions.  OFAC is required by statute to maintain the existing limitations on payment and financing terms for the export and reexport of agricultural commodities and agricultural items. 

The United States is the only country in the world that since 2000 has had a cash and carry arrangement with the purchase of agricultural and pharmaceutical products.Under this arrangement American companies sold over $5.2 billion to the Castro regime. This arrangement protected U.S. taxpayers from having to subsidize the dictatorship when it defaulted on its financial obligations.

How did the Castro regime raise the money to purchase U.S. goods?

James Prevor, President and Editor in Chief of the publication Produce Business in October of 2002 in the article, Cuba Caution, reported on how Cuba "had exhausted all its credit lines and, at best, was simply rotating the accounts. When the opportunity came to buy from the United States, Cuba simply abandoned all those suppliers who supported the country for 40 years and began buying from us."  The suppliers were not the ones impacted by Cuba's failure to pay its debts, the taxpayers of the suppliers' home countries were the one's left holding the tab.  

For example in December 2015 it was announced that Spain would forgive $1.88 billion that the Castro regime owes it. In December of 2013, Russia and Cuba quietly signed an agreement to write off 90 percent of Cuba's $32 billion debt to the defunct Soviet Union, a deal that ends a 20-year squabble. Canadians have had to pursue Cuban maritime debts seizing Cuban vessels and negotiating payment through Canadian courts. On November 1, 2013 the government of Mexico announced that it was ready to waive 70 percent of a debt worth nearly $500 million that Cuba owes it. The former president of Mexico Vicente Fox protested the move stating: “Let the Cubans get to work and generate their own money…They’re normally like chupacabras.  The only thing they’re looking for is someone to give them money for free.”

Trade with the Castro regime peaked under the Bush administration and has crashed under the Obama administration. The Treasury Department's announcement today means that the United States will join the rest of the world in financing the Castro regime.

While the U.S. Chamber of Commerce touts the virtues of free trade, free markets and free enterprise in its advocacy for lifting economic sanctions on Cuba what it is actually pursuing is trade with the Cuban government that passes the risk of not getting paid on to taxpayers.  Darío Fernández-Morera an associate professor at North Western University in the May 1, 2014 issue of Chronicles in the article The Cost of Normalization reports that the Small Business Exporters Association announced 

"since March 2009, a select group of commercial banks now will be able to offer terms of 180 days to five years on federally-guaranteed loans to the foreign buyers of U.S. exports without having to obtain prior federal approval.  ... Because of the foreign risks involved  in export lending, most commercial banks through-out the world do not make these loans without government guarantees. In the U.S., the guarantees are provided by the Export-Import Bank of the United States (Ex-Im Bank), a federal agency.

This will mean that the Chamber of Commerce and Agriculture lobby will sell to the Cuban dictatorship and have the taxpayers pick up the tab if anything goes wrong.  The record with other countries over the past half century indicates that the Castro regime will default on what it owes. On April 23, 2014 Moody's Investor Service downgraded Cuba's already poor credit rating to Caa2 from Caa1which Nasdaq defines as follows: "Obligations rated Caa2 are judged to be of poor standing and are subject to very high credit risk."  

Top 15 Notes from the Cuban Exile Quarter 2014 blog entries

These are the top 15 blog entries of the year in terms of visits arranged in chronological order. George Santayana understood the importance of remembering the past in order to avoid repeating the same mistakes.

Beginning with two blog entries on the crime and health challenges that tourists visiting Cuba face the facts that some would prefer you not learn came fast and furious. This was followed in February by two blog entries on Venezuela about the nonviolent uprising against the policies of the Maduro regime.

In March the Castro regime was exposed as having smuggled heavy weapons to North Korea in a United Nations. On the 25th anniversary of Tiananmen Square members of the Florida International University gathered to pay their respects. This was followed by a report on the arbitrary detention, beatings and torture of Cuban opposition leader Jorge Luis García Pérez "Antúnez." 

As the debate over economic sanctions on Cuba heated up this blog engaged in an analysis of the machinations of the U.S. Chamber of Commerce to leave U.S. taxpayers holding the bag in a future opening to the Castro regime.  The next two blogs focused on crimes against Cubans committed in 1994 and 2012 that have still not been properly investigated: the 13 de Marzo"tugboat sinking and the killings of Oswaldo Payá Sardiñas, and Harold Cepero Escalante.

Political show trials continued in Cuba in 2014 with the show trial of Angel Yunier Remón Arzuaga sentenced to six years in prison for his critical music. The disappearance of 43 Mexican students, apparently murdered with the collusion of local government officials, hit home as it occurred in the same year as the 20 anniversary of the above mentioned tugboat massacre that killed 37 Cubans.

Two blog entries dealt first with the joint announcement of President Obama and dictator Raul Castro on the freeing of Gerardo Hernandez, serving a life sentence for the murder of four members of Brothers to the Rescue, and the normalization of relations and the second with the President's attempt to rewrite the terrorist conspiracy into a "tragic circumstance."

The final entry was announcing a free speech happening in Havana and a second in solidarity with the one in Cuba held in Miami. 

 1. Tourists and travel to Cuba: What the travel agencies don't tell you about crime 

Unlike in many other places in the world where one has to worry about criminals on the street; in the case of Cuba one has to worry about a criminal government that has no respect for human life.  This is what the promoters of tourist travel to Cuba won't tell you about crime on the island. Learn about three tourists murdered in Cuba and one who went missing in 1999.

http://cubanexilequarter.blogspot.com/2014/01/tourists-and-travel-to-cuba-what-they.html 

2. Tourists and travel to Cuba: What the travel agencies don't tell you about health and hygiene 

 In July 2013 an Italian tourist returned from Cuba with severe renal failure due to Cholera. New York high school teacher Alfredo Gómez contracted cholera during a family visit to Havana during the summer of 2013 and was billed $4,700 from the government hospital. A total of 12 tourists have been identified who have contracted cholera in Cuba.

http://cubanexilequarter.blogspot.com/2014/01/tourists-and-travel-to-cuba-what-travel.html  

3. #SOSVenezuela: Non-violent National Student Movement versus Maduro, the Castros and their security apparatus 

On February 12, 2014 Venezuela's National Youth Day millions of young students took to the streets to nonviolently protest "the social and economic crisis caused by the illegitimate government that Venezuela has today."  Young Venezuelans inside and outside of the country have mobilized in a coherent and sustained effort to expose the anti-democratic nature of the government.

http://cubanexilequarter.blogspot.com/2014/02/sosvenezuela-non-violent-national.html

4. Leopoldo López Mendoza and Venezuela's defining nonviolent moment

Before turning himself over on February 18, 2014 to the Maduro regime for encouraging nonviolent protests Venezuelan opposition leader Leopoldo López Mendoza addressed a gathering of tens of thousands in Caracas: 

"Well brothers and sisters I ask you to continue in this fight and do not leave the street, to assume our right to protest, but to do it in peace and without violence, I ask that us, all of us that are here, all of the Venezuelans that want a change, to get informed, educated, organized, and to execute non-violent protests, the protests of masses, and the will of souls and hearts that want to change, but without hurting your neighbor. "

http://cubanexilequarter.blogspot.com/2014/02/leopoldo-lopez-mendoza-and-venezuelas.html

 5. Castro regime's North Korea troubles 

Castro regime's outlaw credentials were reaffirmed in March 2014 in a damning report from the United Nations widely disseminated, on its role in illegal arms smuggling to its ideological soul mate: North Korea. According to the report in a side note "some of the ... parts could also meet the criteria defined in the list of ... technology related to ballistic missile programmes." Also reported the refusal of the Castro regime to cooperate with the investigation.

http://cubanexilequarter.blogspot.com/2014/03/castro-regimes-north-korea-troubles.html

6. Tiananmen Square Crackdown & June 4, 1989 Beijing Massacre: It was 25 years ago today 

In memory of those who stood up for their rights, lost their lives and for those still unjustly imprisoned today in China.

In Miami at Florida International University members of the university community gathered for a prayer and candlelight vigil taking part in a call to action by Initiatives for China and read their recommended prayer. Below is an excerpt:

Let us give thanks for the courage of the young people of Tiananmen Square who 25 years ago showed the world that the Chinese people desire freedom and justice above all earthly goods, and who were willing to give their lives in their brave witness. May all be strengthened by their bravery. May all be blessed by their memory.

http://cubanexilequarter.blogspot.com/2014/06/tiananmen-square-crackdown-june-4-1989.html

7. A Call for Help: Cuban dissident Antúnez's week of beatings, torture and arbitrary imprisonment 

In Cuba under the Castro brothers having a difference of opinion with the government can be a matter of life and death. Jorge Luis García Pérez "Antúnez" led the list of over 800 members of the opposition warning against foreign investment that would serve to strengthen the totalitarian dictatorship on the island.The document was initially made public on June 6, 2014. Five days later at 6:00am there was no knock on the door of Antúnez's home but instead it was kicked down by state security. Sadly, it was not the first time that this has happened and as before the objective was political repression on the part of the dictatorship operating with impunity in Cuba.

http://cubanexilequarter.blogspot.com/2014/06/a-call-for-help-cuban-dissident.html

8. What Chamber of Commerce won't tell taxpayers about cost of normalization of Cuba trade 

Passions run high in the sanctions debate on Cuba, and everyone is entitled to their opinion but not their own set of facts. Below you will find sourced information regarding the U.S. Trade Embargo on Cuba with the objective of contributing to the ongoing debate and discussion. When one is reviewing any policy between those who advocate maintaining the status quo and those advocating scrapping it there is a third position that needs to be considered: "Does it serve the just interests of the United States?" 

http://cubanexilequarter.blogspot.com/2014/06/what-chamber-of-commerce-wont-tell.html 

9. Month of Remembrance for Harold and Oswaldo

Today marks one month from the two year mark of the day that the lives of Oswaldo Payá Sardiñas, and Harold Cepero Escalante were brought to an end. The Christian Liberation Movement over Facebook announced that today June 22, 2014 ( a month before the 2 years of the deaths that have not been cleared up of Harold Cepero and Oswaldo Payá) begins the MONTH OF REMEMBRANCE FOR HAROLD AND OSWALDO. Each day they will recall a piece of information in order  to continue insisting that their deaths be investigated. We will be reproducing them below.

http://cubanexilequarter.blogspot.com/2014/06/month-of-remembrance-for-harold-and.html 

10. Twenty years later still no justice for 37 "13 de Marzo" tugboat victims: A Call to Remember and Take Action
“But men often mistake killing and revenge for justice. They seldom have the stomach for justice.” - Robert Jordan 

The attack on and sinking of the"13 de Marzo" tugboat in the early morning hours of July 13, 1994 is probably one of the worse crimes committed by the Cuban government under the rule of the Castro brothers and it is definitely the best documented and widely recognized by international human rights bodies and is referenced in books on international law. 

http://cubanexilequarter.blogspot.com/2014/07/still-no-justice-for-37-13-de.html

11. Cuban rapper sentenced to six years in prison for his critical songs
"Art is inherently political. It is always political. It has always been political.It has political aspects. And that which we term political art only enhances that political aspect of art. It is taking up political themes and makes these themes its own." - Petr Motyčka, Art, Society, and Politics: Artists or Activists?, Forum 2000 

Cuban dissident and rapper Angel Yunier Remón Arzuaga, whose stage name is "el Critico del Arte" (the 'Art Critic'), on October 15, 2014 was sentenced to 6 years imprisonment in a judicial process that fell far short of international standards. Angel was tear gassed and arrested on March 21, 2013, for criticizing the Castro regime and jailed since that time in conditions that can only be described as inhumane.  El Critico, is a member of the rap duo: Los Hijos Que Nadie Quiso (The Children that no one wanted). Other members of the group were targeted by regime agents. 

http://cubanexilequarter.blogspot.com/2014/10/cuban-rapper-sentenced-to-six-years-in.html

12. Why the disappearance of 43 students in Mexico hits close to home for Cubans
Injustice anywhere is a threat to justice everywhere. - Martin Luther King Jr. 

For Cubans this massacre twenty years after the July 13, 1994 “13 de Marzo” tugboat massacre when 37 Cubans were massacred by government officials is particularly shocking and strikes close to home as does the indifference manifested online by Nestle that made a joke out of the murder of these students to promote their Crunch candy bar. Twenty years later in July of 2014 in New York City, Washington DC, Miami and in Cuba demonstrations in the memory of the 37 massacred Cubans were held. All these years later and the victims are not forgotten. This will also be the case for these 43 students. This is a crime that will not be forgotten but remembered for years to come. 

http://cubanexilequarter.blogspot.com/2014/11/why-disappearance-of-43-students-in.html

13. Obama's Legacy: Normalizing relations with an Abnormal Regime 

Listening to President Obama today after learning the good news that, after more than five years unjustly held hostage, Alan Gross was finally free, and that some Cuban political prisoners were to be freed was nevertheless a sobering and worrisome exercise for a number of reasons.
First the news that three spies who had spied on military installations and congressmen on American soil, that had plotted terrorist acts in the United States, and were implicated in the February 24, 1996 murder of three American citizens and one American resident were freed in a swap to return to Cuba sends a terrible message. Regime hardliners have won, thanks to the Obama Administration's actions today. 

http://cubanexilequarter.blogspot.com/2014/12/obamas-legacy-normalizing-relations.html

14. President Obama the February 24, 1996 shoot down was a premeditated act of state terrorism
President Barack Obama sought on December 19, 2014 to rewrite the history of the Brothers to the Rescue shoot down in a Orwellian fashion stating during a year end press conference

  
Mr. President the events surrounding the February 24, 1996 shoot down began weeks in advance with the dictatorship planning the shoot down and using his spy network to obtain information to advance the conspiracy. It is true that the shoot down was not meant to undermine overtures by the Clinton administration and although it paused the process by the end of 2000 President Clinton had shaken Fidel Castro's hand and a few months later opened cash and carry trade with the dictatorship. However it was not a "tragic circumstance" but a conspiracy to destroy Brothers to the Rescue while at the same time taking attention away from a crack down on a national gathering of the democratic opposition.

http://cubanexilequarter.blogspot.com/2014/12/president-obama-february-24-1996-shoot.html

15. Performance art as a test for free speech in Cuba
I also demand... 

Tania Bruguera, is an internationally recognized installation and performance artist. She is also the daughter of Miguel Bruguera, "a Cuban Political Advisor to the Cuban Embassy in Paris and ambassador to Lebanon and Panama." She is a daughter of the nomenklatura. This may provide some protection for a dissenting voice. Five years ago in April of 2009 she organized a performance art piece that sparked a debate over free speech in Cuba outside of the island and she is at it again. This time she is moving her performance art piece to the Plaza of the Revolution and has scheduled it for December 30, 2014 at 3:00pm.

Meanwhile in Miami to draw further attention to this performance art piece being held in Havana a second one is planned to be held outside the Freedom Tower in Downtown Miami.An open microphone where in the same spirit described above individuals can come and speak their minds for one minute.  It is being organized by Rosa María Payá Acevedo who has adopted the hashtag #YoTambienExijo (#ITooDemand) and added a second hash tag #PLEBISCITOCUBA (#PlebisciteCuba)

http://cubanexilequarter.blogspot.com/2014/12/performance-art-and-test-for-free.html 

The Secret of the Powerful Cuban Exile Lobby in Washington D.C.

What Cuban exiles and Cuban Americans don't like to admit

The dictatorship in Cuba has now been in power for 55 years and for most of that time economic sanctions have been in place.

What is known as the Cuban Embargo began On January 3, 1961 when President Dwight D. Eisenhower suspended trade with Cuba, a few days after his administration broke diplomatic relations with the country. The embargo on Cuba since its inception has meant restrictions on trade and travel to the island by U.S. citizens and in practice has been a partial embargo. Over the decades these sanctions have been loosened and tightened depending on the circumstances at the time.

There was no Cuban exile or Cuban-American lobby until the 1980s and the lobby’s greatest effort involved seeing that Cubans on the island be provided with uncensored news in what would become known as Radio/TV Marti. At the time Radio Free Europe/Radio had been broadcasting to Eastern Europe and the Soviet Union since 1950 but not to Cuba or China. Radio Marti was established in 1983 (TV Marti in 1990) and Radio Free Asia in 1996.

The ban on U.S. imports from Cuba remains but U.S. exports to Cuba have been going on since 1992 with the amounts dramatically increasing since 2002 reaching its peak in exports to Cuba under the Bush Administration in 2008.

President Bill Clinton shook hands with Fidel Castro in September of 2000 and a month later signed the Trade Sanctions Reform and Export Enhancement Act and opened cash and carry trade with the Castro dictatorship at the end of his Administration. At the time of its passage, Fidel Castro said "his country would not buy 'even a grain of rice' under the current terms."

The Cuban dictator ended up buying much more than a grain of rice under those terms. Between 2000 and 2013 American companies have sold $4.689 billion dollars in goods to the Castro regime on a cash and carry basis. Despite the 2003 crackdown on dissidents known as the Black Cuban Spring where the Bush Administration tightened sanctions on being able to travel to Cuba and set limits lower on remittances sent to the island. However, nothing was changed in the cash and carry sales made by U.S. companies to the Castro regime. Towards the end of the Bush Administration in August of 2008 the Cuban government announced that the United States was its fifth leading trading partner.

Despite loosening restrictions further under the Obama Administration agricultural trade with Cuba had dropped to 363.3 million dollars in 2011 and figures for 2012 showed a improvement with sales to the island at 457.3 million dollars. In 2013 agricultural trade dipped to 348,747,293.00 but at the same time there was a dramatic increase in the purchase of pharmaceuticals from 234,718.00 dollars in 2012 to 2,184,370.00 in 2013. However, it did not make up for the decline in Agricultural sales to Cuba. This is not a total embargo but a partial one in which the United States is one of Cuba’s top trading partners. As of the reporting year of 2013 total trade with Cuba since 2001 under TSRA amounts to $4,689,621,948.00

Meanwhile countries that do not have sanctions in place, which includes restrictions on granting credits such as Russia, Venezuela, China, Japan, Spain, Argentina, France, Romania, Brazil, Italy, and Mexico are owed billions of dollars. Russia is forgiving $29 billion dollars of debt that the Castro regime owed it and Mexico is waiving 487 million dollars of debt owed by the regime in Havana.

Where do you think the United States would be on this list if sanctions were lifted and credits became available to the Castro regime? How much would U.S. taxpayers have to shell out?
 
When the Pro-Castro lobby and their allies in the Chamber of Commerce that are very powerful try to sell normalizing relations with Castro the facts always get in the way. For partial example read on:

• On July 15, 2013 Panama captured a North Korean flagged ship from Cuba smuggling arms provided by the Cuban government in violation of international sanctions. The weapons were hidden under bags of sugar. A total of 25 standard shipping containers (16 forty – foot and 9 twenty foot) and 6 trailers were found for a total of about 240 tons of arms and related material among which were found: 1. Surface to air missile systems 2. Radar systems 3.Two Cuban MiG fighters
• As mentioned earlier Cuba is a bad credit risk and the dictatorship oversees a population of 11 million souls trapped in a highly centralized communist economy. Foreigners doing big business in Cuba can only do business with the Cuban dictatorship. Even the hiring of employees is controlled by a government agency that also receives their paycheck. Businessmen are regularly jailed for years as a tactic to avoid having to pay them and to expropriate them.
• Arresting and holding hostage since December 2009 Alan Gross, an American citizen because he was trying to provide uncensored internet access to the local Jewish community in Cuba.
• Extrajudicially executing U.S. citizens over international airspace on February 24, 1996 which was the reason for the tightening and codification of sanctions in the Helms-Burton Bill.
• The Castro dictatorship engaging in and supporting international terrorism over the past five decades which is the reason that Cuba is on the list of state sponsors of terrorism. 

The secret that the Chamber of Commerce and the Pro-Castro lobby do not want you to know is that there is no powerful Cuban exile lobby. There is a David and Goliath battle going on but when it comes to money the anti-Castro Cuban exiles are David in a battle with Goliath's such as the U.S. Chamber of Commerce. A question to ask yourselves is how can three Cuban American U.S. Senators out of 100 and four Cuban American congresspersons out of 435 dictate Cuba policy? The answer is they can’t. What has shaped the current U.S. policy boils down to the facts in evidence and what serves the best interests of the United States.What these legislators and free Cubans are doing is helping to get the facts out in the midst of the onslaught of pro-Castro and corporate propaganda.

What Chamber of Commerce won't tell taxpayers about cost of normalization of Cuba trade

“Ignorance ain't our problem. It's what we 'know' that ain't true.” - Will Rogers

Just business. Nothing personal.

Passions run high in the sanctions debate on Cuba, and everyone is entitled to their opinion but not their own set of facts. Below you will find sourced information regarding the U.S. Trade Embargo on Cuba with the objective of contributing to the ongoing debate and discussion. When one is reviewing any policy between those who advocate maintaining the status quo and those advocating scrapping it there is a third position that needs to be considered: "Does it serve the just interests of the United States?" 

Under George W. Bush's presidency the United States became Cuba's fifth leading trading partner

For example when Jeffrey Goldberg cites the availability of American food products in one of the Cuban government shops for tourists, and says he doesn't know the "mechanism" of how it bypassed the American economic embargo" he is apparently unaware that President Bill Clinton shook hands with Fidel Castro in September of 2000 and a month later signed the Trade Sanctions Reform and Export Enhancement Act and opened cash and carry trade with the Castro dictatorship at the end of his Administration.  At the time of its passage,  Fidel Castro said "his country would not buy 'even a grain of rice' under the current terms."  The Cuban dictator ended up buying much more than a grain of rice under those terms. Between 2000 and 2013 American companies have sold $4.689 billion dollars in goods to the Castro regime on a cash and carry basis. Despite the 2003 crackdown on dissidents known as the Black Cuban Spring where the Bush Administration tightened sanctions on being able to travel to Cuba and set limits lower on remittances sent to the island. However, nothing was changed in the cash and carry sales made by U.S. companies to the Castro regime.Towards the end of the Bush Administration in August of 2008 the Cuban government announced that the United States was its fifth leading trading partner.

 

Chart from the U.S..- Cuba Trade and Economic Council, Inc.

The U.S. Chamber of Commerce in a February 2014 post cites a March 2010 study by Texas A&M University that claims that "easing restrictions on agricultural exports and lifting the travel ban could result in up to $365 million in additional sales of U.S. goods and create 6,000 new jobs in the United States." Its not the first time that such a claim has been made back in 2002 a group that advocated lifting the embargo, the Cuba Policy Foundation, produced a report claiming that the cost to farmers was up to $1.24 billion annually. Looking back today in 2014 the economic data raises an important question. Professor C. Parr Rosson who authored the 2002 study does a break down of trade through 2011  that demonstrates that the peak year of trade between Cuba and the United States was 2008. Despite further loosening of sanctions under the Obama Administration and a more conciliatory posture annual trade with the Castro regime dropped from the peak year of $710,086,323.00 in 2008 to $348,747,293.00 in 2013. Could it be that trade considerations by the Castro regime are subject first to political considerations? If so then what will trade look like when relations are normalized with Cuba and the United States no longer has the leverage of the trade embargo?

What the U.S. Chamber of Commerce doesn't tell U.S. taxpayers

Countries around the world that have "normal" trade relations with Cuba have had a different track record with the island. First on April 23, 2014 Moody's Investor Service downgraded Cuba's already poor credit rating to Caa2 from Caa1which Nasdaq defines as follows: "Obligations rated Caa2 are judged to be of poor standing and are subject to very high credit risk."  Canadians have had to pursue Cuban maritime debts seizing Cuban vessels and negotiating payment through Canadian courts. This is not an isolated case. Russia, Venezuela, China, Japan, Spain, Argentina, France, Romania, Brazil, Italy, and Mexico are owed billions of dollars. Russia is forgiving $29 billion dollars of debt that the Castro regime owed it and Mexico is waiving 487 million dollars of debt owed it by the regime in Havana.  All these countries have commercial relations  with Cuba and extended the government credit. 

James Prevor, President and Editor in Chief of the publication Produce Business in October of 2002 in the article, Cuba Caution, reported on how Cuba "had exhausted all its credit lines and, at best, was simply rotating the accounts. When the opportunity came to buy from the United States, Cuba simply abandoned all those suppliers who supported the country for 40 years and began buying from us."  The suppliers were not the ones impacted by Cuba's failure to pay its debts, the taxpayers of the suppliers' home countries were the one's left holding the tab.

When the United States "normalizes" relations with Cuba it will provide standard loan guarantees to minimize the risks of banks and businesses selling to Cuba. While the U.S. Chamber of Commerce touts the virtues of free trade, free markets and free enterprise in its advocacy for lifting economic sanctions on Cuba what it is actually pursuing is trade with the Cuban government that passes the risk of not getting paid on to taxpayers.  Darío Fernández-Morera an associate professor at North Western University in the May 1, 2014 issue of Chronicles in the article The Cost of Normalization reports that the Small Business Exporters Association announced 

"since March 2009, a select group of commercial banks now will be able to offer terms of 180 days to five years on federally-guaranteed loans to the foreign buyers of U.S. exports without having to obtain prior federal approval.  ... Because of the foreign risks involved  in export lending, most commercial banks through-out the world do not make these loans without government guarantees. In the U.S., the guarantees are provided by the Export-Import Bank of the United States (Ex-Im Bank), a federal agency.

Twelve years ago Prevor predicted where things have now arrived in the Cuba policy debate as far as Agro-business is concerned:

But what the really big grain traders want is to sell to Cuba on credit - and get those credits provided or guaranteed by various federal loan programs. In effect, these agribusiness behemoths want to sell to Cuba and have the U.S. tax- payer pick up the tab. And their bet is that once produce shippers have gotten a taste of the business, they will become a kind of Amen corner for the Cuban lobby, pushing Congress to approve whatever laws will be to the liking of the Cuban government. This really brings to the forefront why trade with a communist country poses unique dangers to a democratic society.

A policy of normalization with the current government in Cuba may be good for Agro-business, the US Chamber of Commerce, and the Castro regime but it will not be good for American taxpayers. Compared to the previous half century of public policy on Cuba the observation that things can go from bad to worse seems appropriate.


Many claim the U.S. trade embargo is a failure but is that a fact?

If the U.S. trade embargo has been a failure as the Boston Globe, and Jeffrey Goldberg have recently asserted and a failure that has been decades long as Daniel Griswold, then of the CATO Institute, argued in 2005 then why has it persisted?  The usual explanation is the power of Cuban exiles in Miami but another explanation is that it hasn't been a failure and has achieved important objectives. Dr. Stephen Wilkinson of the International Institute for the Study of Cuba at London Metropolitan University argued in a 2008 paper that the "Cuban embargo is an example of a successful failure." The reality is that the trade embargo has not been static but has undergone changes over the past five decades under different Administrations and achieved important objectives.

Policy goals of the U.S. trade embargo on Cuba

During the Cold War (1960 -1991)

In the aftermath of the 1962 Cuban Missile Crisis the objective of the trade embargo was set for the rest of the Cold War in a Memorandum From the Coordinator of Cuban Affairs (Cottrell) to the Executive Committee of the National Security Council, January 24, 1963 which in part states:

“We will not, of course, abandon the political, economic and other efforts of this hemisphere to halt subversion from Cuba, nor our purpose and hope that the Cuban people shall some day be truly free."

Objectives:

-  Reducing the capabilities of the Castro regime to direct and support subversion and insurrection within the other OAS states;
- Maximizing the cost to the Soviet Union of supporting the Castro regime;

Analysis:  With the notable exception of the triumph of the Sandinista rebels in 1979 financed and backed by the Cubans, ( at a time when President Carter tried to normalize relations with the Cuban government ) the Castro regime's insurrections failed to succeed in the Americas and Soviet expenditures in Cuba were high but whether or not that contributed to its collapse is a subject for debate.

After the Cold War (1992 - Present)

Following the end of the Cold War and the collapse of the Soviet Union in 1991 the U.S. trade embargo was overhauled first in the Cuban Democracy Act of  1992.  In 1996 in response to the February 24, 1996 Brothers to the Rescue shoot down as an alternative to military action on the Cuban government the Embargo was again overhauled and toughened in the The Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 but also spelled out how and under what conditions the Embargo would be ended.

Objectives: 

- To maintain sanctions on the Castro regime so long as it continues to refuse to move toward democratization and greater respect for human rights; 
- To be prepared to reduce the sanctions in carefully calibrated ways in response to positive developments in Cuba;


Trade will not change the Castro regime's hostility

Trade with Cuba has not changed the Castro regime's hostility toward the United States or other democracies in the region. The example of Venezuela should be both instructive and a caution to those who, like Daniel Griswold claim that "Cuba does not pose a significant military threat to the U.S. or to other countries in the region” citing a report from the Defense Intelligence Agency that was written by Ana Belen Montes, a Cuban spy who did a lot of damage to American intelligence. By the time Venezuelans began to voice their concerns it was too late and the consequences for Venezuela have been and continue to be dire.

One final observation

Who do you think has more leverage in a negotiation?  The country that has economic sanctions in place and 14 years of trade surpluses with Cuba as its fifth leading trading partner or one of the long line of countries that have loaned the Cuban government billions of dollars in loans that it has defaulted on?