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Posted February 28, 2013 by publisher in US Embargo

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Rob Sequin | Havana Journal

Recently, the well known pro-Embargo Cuban-American Jaime Suchlicki posted his reasons against lifting the US Embargo on Cuba.

I felt the need to comment on his statements. My comments are in bold below.

TRADE WITH CUBA

All trade with Cuba is done with state owned businesses. Since Cuba has very little credit and is a major debtor nation, the U.S. and its businesses would have to provide credits to Cuban enterprises. There is a long history of Cuba defaulting on loans.

Agree that most trade is with government run businesses but US agriculture business are selling more than $400million a year to Cuba for CASH, no credit. So, ALL current sales to Cuba are for CASH and Mr. Suchlicki knows this to be a fact since US Cuba trade started in 2001.

Cuba is not likely to buy a substantial amount of products in the U.S. In the past few years, Cuba purchased several hundred million dollars of food in the U.S.. That amount is now down to $170 million per year. Cuba can buy in any other country and it is not likely to abandon its relationship with China, Russia, Venezuela, and Iran to become a major trading partner of the U.S.

I don’t know where Mr. Suchlicki got this $170million number but it is not accurate and US food sales to Cuba were only that low for the first year of sales to Cuba in 2002 So, he is either lying about that number, making it up or ignorant about the actual sales numbers. Either way, it is shameful for him to use such an inaccurate sales number when he is supposed to be an expert on Cuba. See the chart below from the March 2013 issue of Cuba News with data supplied by the very reliable US Cuba Trade and Economic Council.

Cuba has very little to sell in the U.S.. Nickel, one of Cuba’s major exports, is controlled by the Canadians and exported primarily to Canada. Cuba has decimated its sugar industry and there is no appetite in the U.S. for more sugar. Cigars and rum are important Cuban exports. Yet, cigar production is mostly committed to the European market. Cuban rum could become an important export, competing with Puerto Rican and other Caribbean rums.

What’s his point here? Right. The US can’t buy Cuban nickel, cigars or rum. If the US could buy these products, sales to the US would be hundreds of millions of dollars immediately.

INVESTMENTS IN CUBA

In Cuba, foreign investors cannot partner with private Cuban citizens. They can only invest in the island through minority joint ventures with the government and its state enterprises.

Not exactly true. Ask the tens of thousands of Cuban American going to Cuba on a regular business investing with their friends and family in real estate, casas particulars and paladares.

The dominant enterprise in the Cuban economy is the Grupo GAESA, controlled by the Cuban military. Most investments are done through or with GAESA. Therefore, American companies willing to invest in Cuba will have to partner mostly with the Cuban military.

True. I’ll give him this point. No news here. The President of Cuba, Raul Castro ran the military for 50+ years. Yes. The Cuban military run Cuba. Is anyone shocked by that news?

Cuba ranks 176 out of 177 countries in the world in terms of economic freedom. Outshined only by North Korea. It ranks as one of the most unattractive investments next to Iran, Zimbabwe, Libya, Mali, etc.

Agree but US businesses should be able to estimate their own risks and comfort level without the US government forbidding companies by law to invest. By the way, in his ranking, Venezuela is 174 on that list. Should the US government pass a law forbidding US companies from investing in Venezuela?

Foreign investors cannot hire, fire, or pay workers directly. They must go through the Cuban government employment agency which selects the workers. Investors pay the government in dollars or euros and the government pays the workers a meager 10% in Cuban pesos.

Not sure this is 100% accurate.

Corruption is pervasive, undermining equity and respect for the rule of law.

Pervasive? The system does not work so just about everything in Cuba is illegal. Some call it corruption, some call it a way to live under Communism.

Cuba does not have an independent/transparent legal system. All judges are appointed by the State and all lawyers are licensed by the State. In the last few years, European investors have had over $1 billion arbitrarily frozen by the government and several investments have been confiscated. Cuba’s Law 77 allows the State to expropriate foreign-invested assets for reason of “public utility” or “social interest.” In the last year, the CEOs of three companies with extensive dealings with the Cuban government were arrested without charges. They are Cy Tokmakjian of the Tokmakjian Group, Sarkis Yacoubian of Tri-Star Caribbean, both from Canada, and Amado Fakhre of Coral Capital, Britain.

Agree.

CONCLUSIONS

If the travel ban is lifted unilaterally now or the embargo is ended by the U.S., what will the U.S. government have to negotiate with a future regime in Cuba and to encourage changes in the island? These policies could be an important bargaining chip with a future regime willing to provide concessions in the area of political and economic freedoms.

If a US trade and travel ban has ever worked as a “bargaining chip”, I would like to learn about it. After 50+ years, the Cuban people are not going to rise up and the Cuban government is not going to give up Communism so one more year of the Embargo is useless and anti-American.

The travel ban and the embargo should be lifted as a result of negotiations between the U.S. and a Cuban government willing to provide meaningful and irreversible political and economic concessions or when there is a democratic government in place in the island.

As heard in 1961.

Jaime Suchlicki is Emilio Bacardi Moreau Distinguished Professor and Director, Institute for Cuban and Cuban-American Studies, University of Miami. He is the author of Cuba: From Columbus to Castro, now in its fifth edition; Mexico: From Montezuma to NAFTA, now in its second edition and the recently published Breve Historia de Cuba.

The CTP can be contacted at P.O. Box 248174, Coral Gables, Florida 33124-3010, Tel: 305-284-CUBA (2822), Fax: 305-284-4875, and by email at .(JavaScript must be enabled to view this email address). The CTP Website is accessible at http://ctp.iccas.miami.edu

——————————Havana Journal Comments——————————

Lift the trade and travel Embargo on Cuba and let Americans be Americans and let Cubans be Cubans. People to people interactions and the markets are the best way to have positive change in Cuba.

Sadly, Mr. Suchlicki and his kind get MILLIONS of dollars of US taxpayer’s money every year to “study” Cuba and “promote democracy’ in Cuba. How’s that going? The Embargo is a multi-decade failure with no success in sight.

This may sound harsh but I believe that Mr. Suchlicki wakes up every morning THANKING Fidel and Raul for being in power so he can continue to “study” Cuba and “promote democracy’ in Cuba.

With regards to the silliness of Cuba being a country that sponsors terrorism… Cubans that arrive in the US are GIVEN A PATH TO CITIZENSHIP ahead of ALL other immigrants. They are not screened or questioned about being agents from a terrorist country. Having Cuba on that list is stupid.

You want to make the Embargo work? Cancel all flights to Cuba. Return all Cubans that enter the US. Stop all payments to Cuba from Cuban Americans. Stop all food sales to Cuba. Enforce Helms Burton that punishes foreign countries for doing business in Cuba.

See how silly the Embargo is? It’s a water bucket full of holes. Time to throw away the bucket.

Am I wrong?

PS Every time you drink Bacardi you are supporting the US Embargo on Cuba.

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