Tue, 14 Jul 2020

U.S.-Cuban relations shatter again as Trump flexes muscles

William M. LeoGrande - The Conversation
19 Apr 2019, 20:41 GMT+10

<p>The Trump administration has <a href="https://www.miamiherald.com/news/nation-world/world/americas/cuba/article229341009.html">declared</a> the most severe new sanctions against Cuba since President John F. Kennedy imposed an <a href="https://www.state.gov/e/eb/tfs/spi/cuba/">economic embargo</a> banning all trade with the communist island in 1962.</p><div><p>Speaking in Miami on Wednesday, the anniversary of the United States&rsquo; <a href="https://www.wtsp.com/article/news/history/bay-of-pigs-the-botched-invasion-happened-58-years-ago/67-d5895183-235f-4b1d-a8b7-7b92d7c60e5a">failed 1961 invasion of Cuba&rsquo;s Bay of Pigs</a>, national security adviser John Bolton announced the end of virtually all non-family travel to Cuba and placed new limits on the money Cuban Americans can send to family on the island.</p><p>He also said the U.S. will now implement a <a href="https://www.mcclatchydc.com/news/nation-world/world/latin-america/article224646995.html">23-year-old law aimed at blocking both U.S. and foreign investment in Cuba</a>, first passed by Congress in 1996 as part of a broader sanctions package against Cuba but <a href="https://www.everycrsreport.com/files/19991214_RL30386_714aa7ff79cec8fc7f29926c448f6d1bc1d6bef2.pdf">put on hold because it triggered immense opposition</a> among U.S. allies.</p><p>The harsh new sanctions reverse &quot;the disastrous Obama-era policies, and finally end the glamorization of socialism and communism,&quot; Bolton said.</p><p>Trump&rsquo;s decision activates a long-suspended 1996 provision of U.S. Cuba sanctions that allows Cuban Americans to <a href="https://www.mcclatchydc.com/news/nation-world/world/latin-america/article224646995.html">sue in U.S. courts</a> any company that benefits from private property of theirs confiscated by Fidel Castro&rsquo;s regime.</p><p>Normally, U.S. courts have no jurisdiction over property owned by non-citizens that is nationalized by a foreign government. For U.S. courts to sit in judgment of another government&rsquo;s actions toward its own citizens in its own territory is a <a href="https://www.reuters.com/article/us-venezuela-cuba-economy/investors-in-cuba-wary-of-impact-from-u-s-threats-venezuela-crisis-idUSKCN1PW2UJ">challenge to that government&rsquo;s sovereignty</a>.</p><p>U.S. allies who do business with Cuba vehemently <a href="https://www.wsj.com/articles/new-u-s-policy-on-cuba-sanctions-threatens-eu-ties-11555421835">oppose the move</a>.</p><p>In 1996, when the U.S. law was first approved, the European Union <a href="https://www.wsj.com/articles/SB931464187753635502">filed a complaint</a> with the World Trade Organization and adopted a law prohibiting EU members and their companies from complying with the U.S. legislation. <a href="https://www.nytimes.com/1996/06/13/world/canada-and-mexico-join-to-oppose-us-law-on-cuba.html">Mexico, Canada</a> and the <a href="http://www.legislation.gov.uk/uksi/1996/3171/contents/made">United Kingdom</a> soon passed similar legislation.</p><p>In response, President <a href="https://www.nytimes.com/1998/04/21/world/europeans-drop-lawsuit-contesting-cuba-trade-act.html">Bill Clinton suspended</a> the lawsuit provision, which is called Title III, for six months, and in 1998 he signed <a href="https://www.reuters.com/article/us-eu-usa-cuba/eu-warns-u-s-against-exposing-eu-firms-in-cuba-idUSKCN1RT147">an agreement</a> with the EU that European companies who do business in Cuba would not be targeted.</p><p>Since then, every president, Democrat and Republican, has renewed the suspension. Trump himself renewed it three times &ndash; until he didn&rsquo;t.</p><p>The president has now <a href="https://www.france24.com/en/20190417-cuba-sanctions-trump-eu-opposition-economy-business-usa">reignited international outrage</a> over this sanction, which abrogates Clinton&rsquo;s agreement with the EU and complicates already rocky U.S. relations with Mexico and Canada.</p><p>Who wins?</p><p>A small but elite community stands to benefit from Title III: Cuba&rsquo;s former <a href="https://www.pbs.org/wgbh/americanexperience/features/castro-cuban-exiles-america/">one percenters</a> &ndash; members of the exiled upper class that owned nearly all the land and business in Cuba prior to the 1959 Cuban Revolution.</p><p>Most wealthy Cubans fled the country after Fidel Castro&rsquo;s Communist government <a href="https://www.britannica.com/event/Cuban-Revolution">nationalized their businesses and confiscated</a> their homes, bank accounts and property. Some <a href="https://www.miamiherald.com/news/nation-world/world/americas/cuba/article213916384.html">still dream</a> of recouping their lost fortunes.</p><p>They can now sue Cuban, American and foreign companies that profit in any way from the use of that property.</p><p>For example, former owners of Cuba&rsquo;s nickel mines could seek damages from Canada&rsquo;s <a href="https://www.sherritt.com/English/operations/metals/Moa/default.aspx">Sherritt International Corporation</a>, which has invested in Cuba&rsquo;s nickel mining industry. The former owners of Cuban hotels could sue the Spanish hotel company <a href="http://www.meliacuba.com/">Melia</a>, which manages hotels across the island.</p><p>Every U.S. and foreign company that <a href="https://repositorio.cepal.org/bitstream/handle/11362/1139/1/S0900391_en.pdf">does business with Cuba</a> with profits of <a href="http://cubantriangle.blogspot.com/2019/01/more-on-title-iii.html">over US$433,000 a year</a> &ndash; or might do so in the future &ndash; risks being sued if they make use of property once owned by a Cuban exile who is now a U.S. citizen. According to a 1996 <a href="https://crsreports.congress.gov/product/pdf/R/R44822">State Department analysis</a>, implementing Title III could flood U.S. federal courts with as many as 200,000 lawsuits.</p><p>Most Cuban Americans will gain nothing from Trump&rsquo;s latest sanctions.</p><p>It exempts private residences from compensation. So, if the main thing you owned back in Cuba was a house that was confiscated after Jan. 1, 1959, you&rsquo;re out of luck.</p><p>The exiled owners of thousands of <a href="https://havanatimes.org/?p=74021">small Cuban mom-and-pop shops nationalized in 1968</a> won&rsquo;t see compensation, either, because the law exempts Cuban small businesses that were confiscated.</p><p>Those who stand to benefit are the oldest, <a href="https://www.brookings.edu/articles/what-to-expect-from-the-cuban-american-electorate/">most conservative</a> and wealthiest segment of Florida&rsquo;s 1.5 million Cuban Americans.</p><p>Trump <a href="https://www.miaminewtimes.com/news/donald-trump-says-cuban-voters-love-him-but-hes-wrong-9146019">believes</a> these influential Republicans helped him win Florida in 2016 because he promised to take a hard line towards Havana, rolling back President Obama&rsquo;s restoration of diplomatic and economic relations with the island.</p><p>If the president thinks these punishing new sanctions can <a href="https://www.miamiherald.com/news/nation-world/world/americas/cuba/article156579409.html">deliver Florida to him</a> again in 2020, he may have miscalculated.</p><p>I&rsquo;ve studied <a href="https://www.american.edu/spa/faculty/wleogra.cfm">Cuba-U.S. relations for decades</a>. While activating the law may please Cuba&rsquo;s former wealthy business owners, Trump&rsquo;s new sanctions &ndash; like limiting the money Cuban Americans can send back to the island &ndash; are unlikely to be popular in the broader Cuban American community.</p><p>By decisive majorities, <a href="https://cri.fiu.edu/research/cuba-poll/2018-fiu-cuba-poll.pdf">Cuban Americans support</a> free travel between the U.S. and Cuba, broader commercial ties and President Obama&rsquo;s decision to normalize relations. Every year, they send <a href="https://www.nytimes.com/2018/04/17/opinion/cuba-castro-united-states.html">$3 billion</a> to family on the island, and hundreds of thousands of them travel there to visit.</p><p>These Cuban-American voters don&rsquo;t want to inflict more economic pain on the Cuban public, which includes their friends and family.</p><p>The punitive aspects of the newly implemented law, which administration officials have for months <a href="https://www.miamiherald.com/news/nation-world/world/americas/cuba/article220976370.html">hinted that they would put into effect</a>, are already having an impact.</p><p>Cuban American families who owned the land and facilities at the <a href="https://www.miamiherald.com/news/nation-world/world/americas/cuba/article213916384.html">port of Havana</a> and <a href="https://www.tampabay.com/news/cuba/us-might-allow-lawsuits-over-us-properties-nationalized-in-cuba-20190117/">Jos&eacute; Mart&iacute; International Airport</a> have warned the cruise ship companies and airlines that their use of these properties could put them at legal risk.</p><p>Along with money sent from their families abroad, tourism-related income sustains many everyday Cubans.</p><p>If travel businesses withdraw from Cuba, and if U.S. and foreign firms <a href="https://money.usnews.com/investing/news/articles/2019-02-07/investors-in-cuba-wary-of-impact-from-us-threats-venezuela-crisis">hesitate to enter</a> into new commercial relations with Cuba for fear of incurring lawsuits in the United States, Cuba&rsquo;s already <a href="https://www.reuters.com/article/us-cuba-economy/cuba-lowers-economic-growth-forecast-as-trade-continues-to-drop-idUSKCN1N90JO">fragile economy</a> would take a serious hit.</p><p>That may play well with Cuba&rsquo;s old elite. But the rest of Florida&rsquo;s Cuban Americans will feel the hurt, too.</p><p>(The writer William M. LeoGrande is Professor of Government at the American University School of Public Affairs).</p></div>

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