Cuba dictates terms for normalisation, as US loosens trade restrictions

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We are beginning a new, long and complex stage on the way to the normalisation of ties, which will require finding solutions to problems that have been accumulated over five decades

Raul Castro, July 2014

Two contradictory steps taken by the US administration on 11 September exposed the hypocrisy and cynicism of its new position on Cuba. First, a US government delegation sat down with its Cuban counterparts in Havana for the first ‘bilateral commission’ to advance the process of rapprochement between the two countries. Second, President Obama signed a document to extend Cuba’s designation as an enemy under the Trading with the Enemy Act for another year. The Act dates back to the First World War (1917), and Cuba was initially included by President Kennedy during the Cuban Missile Crisis in 1962. An ‘enemy’ is defined as a country at war with the US. Cuba is the only country listed since North Korea was removed from the list in 2008. Andrew George reports.

The bilateral commission will handle the ‘normalisation’ of relations, a process begun in 2013 with 18 months of secret talks between the Cuban and US officials, culminating in simultaneous announcements on 17 December 2014 by Presidents Raul Castro and Barack Obama that the countries would re-establish diplomatic relations. That announcement was accompanied by a prisoner swap (see FRFI 243) and limited measures taken by Obama to remove some restrictions imposed on trade and relations between the two countries by the US blockade (FRFI 244). In May, the US government removed Cuba from the US list of State Sponsors of Terrorism, after 33 years. On 20 July 2015, the US and Cuba formally resumed full diplomatic relations after a break of 54 years (FRFI 246), reopening respective embassies in Havana and Washington. In mid-August, US Secretary of State John Kerry visited Havana to preside over the official reopening of the US embassy. During that visit the two sides agreed to set up the bilateral commission.

During the inaugural bilateral commission the agenda for discussions during the following months were agreed. These can be categorised into three groups. First, new and existing areas of cooperation: environmental protection, disaster prevention and response, health care, civil aviation and law enforcement, including combatting drug and people trafficking, and cross-border crime. Second, bilateral and multilateral issues where the two sides do not agree: principally human rights and political rights. Third, those issues which must be resolved before relations between the countries can be normalised: the US demand for compensation for properties nationalised by the revolutionary government in the 1960s; Cuba’s demand for compensation for the economic cost of the illegal US blockade imposed since 1961 and successively strengthened since then (the cost of the blockade has been calculated as $1.126 trillion); and the lifting of the US blockade – which both sides now formally agree on. Cuba also demands the return of territory illegally held by the US in Guantanamo, an end to illegal and subversive radio and television broadcasts from the US into Cuba, the end to covert and overt programmes which contribute to the US strategy of ‘regime change’ in Cuba. It is difficult to imagine the demands in this third group being met. The next bilateral commission has been scheduled for November in Washington.

In the fiscal year 2016, the US-Congress has approved $30 million to go to such regime change programmes in Cuba. USAID, the principal agency overseeing this budget, recently advertised for three programme managers to be paid six-figure salaries, while the National Endowment for Democracy seeks a Program Officer for its ‘Cuba grants program’ – to foment dissent and regime change.

US loosens trade and travel restrictions

On Monday 21 September, ten days after signing the Trading with the Enemy Act and three days after a phone conversation with Raul Castro, Obama ordered the loosening of some of its ‘Cuban Assets Control Regulations’ and ‘Export Administration Regulations’ which obstruct trade with Cuba. He also removed the cap on remittances Cuban-Americans are permitted to send (previously $2,000 per quarter), although it continues to be illegal to send remittances to any government or Cuban Communist Party official. US citizens will now be able to travel to Cuba by cruise ship or ferry without seeking specific authorisation from the US government. Companies exporting authorised ‘humanitarian’ items to Cuba, such as agricultural products and building materials (for construction and renovation of ‘privately-owned’ buildings only!), are now permitted to establish physical premises in Cuba, such as offices, retail outlets and warehouses, as well as transportation companies. This general licence authorising transactions related to specified humanitarian projects will be expanded to include disaster relief and historical preservation.

US citizens will be able to open bank accounts in Cuba for work purposes and US financial institutions can open correspondent accounts (to manage the financial transactions of another banks) with financial institutions in Cuba. Cubans can open bank accounts in the US. After becoming the Cuban government’s bank for its diplomatic mission in the US earlier in the year, in July, the Florida-based Stonegate Bank became the first US bank to sign a correspondent banking deal with a Cuban bank since rapprochement began. However, Cuba remains prohibited from using US dollars in international transactions – a major obstacle to Cuba’s economic development – and the US government still fines foreign banks for engaging in transactions with Cuba. The prohibition on Cuba accessing US bank credit remains.

It is no coincidence that telecommunications are among the first sectors where the blockade is being loosened or circumvented. Telecommunications infrastructure has been used by the US around the world as a means of destabilisation, fomenting internal opposition. In Cuba, the US intends to use it as a means for disseminating anti-communist, pro-imperialist propaganda. US companies are offering mobile phone roaming and wireless services to Cuba. However, Cuba is preserving its state monopoly company Etecsa.

US measures to loosen the blockade are, however, only half of the story. Cuban authorities will only accept trade and investment proposals which reinforce Cuba’s socialist long-term economic development plan and are not detrimental to its environmental, social and political agenda (FRFI 240).

On 28 September, President Castro will address the United Nations General Assembly in New York for the first time. For the past 23 years, Cuba has presented a motion to the Assembly condemning the US blockade. The motion has been approved with an increasing majority. Last year, 188 nations condemned the blockade with only two – the US and Israel – against. How will the US vote this year, since the US President calls on Congress to lift the blockade? Abstention will put more pressure on US Congress to concede. However, the Congress is dominated by Republicans, and all the numerous Republican presidential candidates support the continuation of the US blockade.

US imperialism: same agenda, different tactic

Obama’s call for US ‘engagement’ with Cuba is just the latest tactic by a crisis-ridden US imperialism to overthrow the revolutionary government by alternative means (see FRFI 245). Sections of the US ruling class admit the failure of their Cuba policy and argue instead for the US to be in a position to exploit the perceived ‘liberalisation’ of the Cuban economy, the result of the gradual implementation of the 2011 Social and Economic Policy updates to the Party and the Revolution currently underway. They have misread the objectives and significance of the post-2008 measures in Cuba, which are designed to increase the productivity and efficiency of, and participation in the Cuban economy, to reduce its vulnerability to the international capitalist crisis and to provide a more stable foundation on which to advance in the construction of socialism. The Cuban people and their revolutionary government are aware of the threat presented by the change in US tactics. They remain committed to building a sustainable socialist system, based upon the principles of social and economic justice, internationalism and national sovereignty.

FRFI 247 October/November 2015