The Cuba Stalemate
A Former State Department Expert on Cuba Calls the Embargo an Idea Whose Time Has Passed
Wayne S. Smith
From the Print Edition:
Matt Dillon, Spring 96
Change is not only afoot in Cuba, it is well along the road. In "The Future of Cuba" (Winter 1993/94 Cigar Aficionado) I noted that the economic reform process had begun, was irreversible and would take on a momentum of its own. So it has been. Dollarization and a tentative self-employment law have been followed by the opening of farmers' and artisan markets, and by a significant broadening of the foreign investment law. These measures, plus the need to reduce the state sector of the economy, are putting mounting pressure on the government to expand the private sector. Hence, a small business law is now being discussed and will probably be adopted sometime this year.
Cuba, in short, is on the way to a thoroughly mixed economy. The results are encouraging. From the free fall of a few years ago, when the Cuban economy was retracting by 10 to 12 percent a year, it has begun to recuperate. Last year brought a growth rate of 0.7 percent and economists estimate the economy will grow 2.3 percent in 1996. Not much, to be sure; Cuba has a long way to go to full recovery. Other reforms must follow. Still, the corner has been turned.
There have also been profound changes in Cuba's foreign policy over the past few years. It is no longer assisting revolutionary movements, no longer has troops in Africa or anywhere else and is no longer the military ally of the former Soviet Union.
Yet, none of this has resulted in any relaxation of U.S. policy toward Cuba. The principal instrument of that policy, our 35-year-old trade embargo, not only remains firmly in place but has actually been tightened. Why is this? If we can lift the embargo against Vietnam, extend most favored nation treatment to China and negotiate with North Korea, why can we not show some flexibility toward Cuba? Was there something in the genesis of the trade embargo against Cuba that produced such rigidity?
A quick examination of how and why the embargo was imposed would suggest that that was not the case. On the contrary, the embargo was established for perfectly logical reasons. The process began in the summer of 1960 when the Cuban government ordered two U.S. oil companies, Standard and Texaco, to refine Soviet crude oil at their Cuban refineries, rather than the oil they had been bringing in from their own sources. Not surprisingly, they refused. Also to no one's surprise, the Cuban response, on July 1 of that year, was to nationalize both companies' holdings in Cuba. A few days later, the United States retaliated by cutting the Cuban sugar quota, and that led, in August, to Cuba's nationalization of virtually all U.S. property on the island.
By the end of 1960, this tit-for-tat process had produced an embargo on trade between the countries--one that was expanded to include, by 1962, even food and medicine, and trade between Cuba and U.S. subsidiaries overseas. The latter was a particularly sticky point, for while the United States may consider, say, Ford of Argentina to be a branch of the American company, Argentina considered--and considers--it a company incorporated in Argentina, to be fully subject to local law and trading practices. Efforts by the United States to impose its law and practices on such companies are inevitably resented and seen by the host governments as a violation of their sovereignty. At first, however, given that most of those governments sympathized with the United States against Cuba and even cooperated with the trade embargo, the question was moot. But only for a time.
I should note at this point that I was, in a sense, present at the creation. As a young foreign service officer in the U.S. Embassy in Havana (until we broke relations in January 1961) and then during much of 1961 as an officer in the Department of State, I not only helped write some of the language that went into the embargo, but saw all the documents outlining our justification for imposing it. Essentially, these reflected three objectives:
* First, to punish Cuba for having nationalized our properties without compensation, and
perhaps even to force it into a compensation
* Second, to raise the costs to the Soviets, and to the Cubans, of maintaining their alliance and pursuing policies detrimental to U.S. interests.
* Third, to reduce the resources Cuba could pour into assistance to revolutionary movements, especially in Latin America.
None of these objectives was irrational or idle. They were, after all, formulated against the backdrop of the Cold War and Fidel Castro's vows to turn the Andes into the Sierra Maestra of Latin America; i.e., to spark revolution throughout the southern hemisphere. To defend themselves, the Latin American governments--the targets of this outward thrusting on Castro's part--stood with us and entered into a multilateral trade embargo against the island. Our policy toward Cuba in those years, then, was not an isolated one; rather, it was endorsed by the Organization of American States (OAS) as a whole.
But times changed. At the end of the 1960s, Castro began to pull back from his efforts to overthrow other Latin American governments, and, rather, reached out to establish diplomatic and trade ties with them. They responded in kind. Country after country broke ranks with the OAS. Nor was U.S. prohibition of subsidiary trade any longer a moot question. Trading partners protested, and in 1973 Argentina threatened strong actions against U.S. subsidiaries that did not participate in its new trade agreement with Cuba.
With conditions thus changing, in 1975 the OAS voted to lift its multilateral embargo. For its part, the United States not only voted with the majority to end the ban, but also, having concluded that our efforts to prohibit subsidiary trade were causing us more problems than they were Castro, gave them up. From that point until 1992, U.S. subsidiaries abroad were free to trade with Cuba.
The United States did not, however, lift its own unilateral trade embargo against the island. Over the next 15 years, America argued that Cuban meddling in Central America and support for Soviet incursions in Afghanistan and elsewhere were reason enough to keep the embargo in place. But over those same years, the United States assured the Cubans that if they would remove their troops from Africa, halt support for revolutionaries in Central America and reduce their military ties to the Soviet Union, the United States would move ahead toward normalization of relations. I know; I delivered that message myself on a number of occasions.
By 1992, all those conditions had been met. All that and more: The Soviet-Cuban alliance was finished. So was the Cuban support for revolutionary groups that had once so concerned us. Cuba, moreover, had reached compensation agreements with every other country that had property claims against it and was offering to negotiate one with us. In short, the original objectives that had brought forth the embargo were achieved or were now realizable through other means. The embargo had no more raison d'etre.
So, did we move toward normalization, as we'd promised? No; instead we went in the opposite direction. With the Cuban Democracy Act of 1992, signed by then-president George Bush and fully supported by presidential candidate Bill Clinton, we tightened the embargo and restored the ban on subsidiary trade, to the outraged cries of other governments. Rep. Robert Torricelli (D-New Jersey), the principal proponent of the Cuban Democracy Act, assured one and all that it would "wreak havoc in Cuba," and that as a result, Castro would fall "within weeks."
More than three years later, Castro is not only still there, but the Cuban economy is beginning to recover. Meanwhile, U.S. policy toward Cuba is now virtually isolated. The vote in the United Nations this past November was 117 to 3 against our embargo. Only Israel and the former Soviet republic of Uzbekistan voted with us, and both trade with Cuba! No other government cooperates with our embargo. As do we, many of those governments want to see Cuba move toward a more open society, to free the remaining 600 to 900 political prisoners (down from the tens of thousands held in the 1960s), to permit freedom of expression and a free press. They disagree entirely, however, that the embargo is the best way to achieve all that, and they note also that Cuba is no less democratic and has a better human rights record than several countries with which the United States has rather warm rela tions--countries such as China and Saudi Arabia.
So what is to be our next step? More of the same, with the Helms-Burton bill now before Congress. Pushed by Sen. Jesse Helms (R-North Carolina) and Rep. Don Burton (R-Indiana), the legislation aims to tighten the embargo still further, so as, in the words of Senator Helms, "to carry Castro out feet first."
Helms-Burton, however, isn't likely to have any more effect than the Cuban Democracy Act. The bill would only deepen our own isolation on the Cuban question. It nonetheless enjoys broad partisan support in Congress. How to explain this intellectual sclerosis? It has nothing to do with the original rationale behind the embargo. That made sense. But over the years we seem to have become so caught up in an emotional crusade to oust Castro that we have lost sight of any sensible, practical goals. Nor are there signs of amelioration. Whether or not Helms-Burton prospers, and despite the growing pressures from American businessmen, who are tired of being shut out of the Cuban market, it seems unlikely that this or any successive administration will lift--or even tamper with--the embargo for at least another few years. That is regrettable, but not surprising. When it comes to Cuba, we have a penchant for shooting ourselves in the foot.
Wayne S. Smith is visiting professor at The Johns Hopkins University and senior fellow at the Center for International Policy in Washington, D.C. He was chief of the State Department's U.S. Interests Section from 1979 to 82, and before he left the Foreign Service in 1982, was regarded as the department's leading expert on Cuba.
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