Center for International Policy

July 17, 2006

U.S.-Cuba Relations

Author:
Stephanie Hanson, Copy Editor

Council on Foreign Relations

* Introduction
* What is the status of U.S.-Cuba relations?
* What is U.S. public opinion on the isolation of Cuba?
* What is the likelihood that the United States and Cuba will resume diplomatic relations?
* What is the main irritant in U.S.-Cuban relations?
* What are the issues preventing normalization of U.S.-Cuban relations?
* What is CAFA?
* What are the provisions of CAFA’s recent report?
* Has Fidel Castro named his successor?
* What is keeping Cuba on the State Sponsors of Terrorism list?
* What is the status of Cuba’s economy?
* How does Venezuela assist Cuba?

Introduction

Cuba has been at odds with the United States since Fidel Castro assumed power in 1959. Successive U.S. administrations have tried a range of tough measures, including prolonged economic sanctions and designation of Cuba as a state sponsor of terrorism, none of which have substantially weakened Castro's rule. With Castro nearing his eightieth birthday, the United States is preparing for a post-Castro Cuba with an $80 million fund to promote democracy on the island. Cuban officials have criticized the plan as yet another attempt by Washington at "regime change" and warned local groups against accepting U.S. funds. Despite some stirrings of U.S. economic interest in Cuba, experts don't expect a move toward normalization of U.S.-Cuban relations anytime soon.
What is the status of U.S.-Cuba relations?

U.S.-Cuba relations are virtually nonexistent. There is a U.S. mission in Havana, Cuba's capital, but it has minimal communication with the Cuban government. Since 1961, the official U.S. policy towards Cuba has been two-pronged: economic embargo and diplomatic isolation. The Bush administration has strongly enforced the embargo and strengthened travel restrictions. Americans with immediate family may visit once every three years for a maximum of two weeks, while the total amount of family remittances an authorized traveler may carry to Cuba is $300, reduced from $3,000 in 2004.

But the U.S. Congress has softened administration policy in some areas. Congress amended the trade embargo in 2000 to allow agricultural exports from the United States to Cuba. In 2005, U.S. companies exported some $338 million worth of food and agricultural products to Cuba; in 2001 that figure was virtually zero. Nebraska, Oklahoma, and Texas have all brokered agricultural deals with Cuba over the past two years. In June, the U.S. House approved an amendment to ease restrictions on Cuban payments for U.S. agricultural exports. The matter now awaits Senate action.
What is U.S. public opinion on the isolation of Cuba?

Some U.S. constituencies would like to resume relations. American agricultural groups already deal with Cuba, and other economic sectors would like access to the Cuban market. A 1999 executive order by President Clinton easing travel to the island precipitated an increase in U.S. visits, which ended with the restrictions ordered by President Bush in May 2004. Many Cuban-Americans are angry about the stricter limits on travel and remittances. However, a small but vocal contingent of hard-line Cuban exiles, many of them based in Florida, do not want to resume relations with Cuba until Castro and his sympathizers are gone, says Julia Sweig, CFR senior fellow for Latin American Studies.

Opinions in Congress are mixed: A group of influential Republican lawmakers from Florida—Lincoln Diaz-Balart, his brother Mario Diaz-Balart, and Ileana Ros-Lehtinen—is strongly anti-Castro. At the same time, there is growing sentiment in favor of improving relations with Cuba. In 2002, a bipartisan group of senators, the Congressional Cuban Working Group, proposed a set of measures that included lifting the travel ban and allowing private financing of food and agriculture sales. In 2003, both the House and Senate voted to lift the travel ban but the measure was removed after President Bush threatened to veto.

What is the likelihood that the United States and Cuba will resume diplomatic relations?

Given the range of issues dividing the two countries, experts say the possibility of normalization remains distant. "We don't use that language [normalization] anymore because the relationship is so toxic," Sweig says. Wayne Smith, director of the Cuba program at the Center for International Policy, says Cuba has the "same effect on U.S. administrations that the full moon has on a werewolf."

What is the main irritant in U.S.-Cuban relations?

A fundamental incompatibility of political views, experts say. From the U.S. perspective, by continuing to rule a one-party socialist state, Fidel Castro "has defied us and jeered at us for over half a century," Smith says. While experts say the United States wants regime change, "the most important objective of the Cuban government is to remain in power at all costs," says Felix Martin, assistant professor at Florida International University's Cuban Research Institute. He says Castro intends to stay in power for life. Castro has been an inspiration for Latin American leftists such as Venezuelan President Hugo Chavez and Bolivian President Evo Morales, who have challenged U.S. policy in the region.

What are the issues preventing normalization of U.S.-Cuban relations?

* Human rights violations. In March 2003, the Cuban government arrested seventy-five dissidents and journalists, sentencing them to prison terms of up to twenty-eight years on charges of conspiring with the United States to overthrow the state. The Cuban Commission for Human Rights and National Reconciliation, a Havana-based nongovernmental group, reports that the government is now resorting to other tactics—such as firings from state jobs and intimidation on the street—besides prison to silence opposition figures. A 2005 UN Human Rights Commission vote condemned Cuba's human rights record, but the country was elected to the new UN Human Rights Council in 2006.
* Guantanamo Bay. Cuba indicated after 9/11 that it would not object if the United States brought prisoners to Guantanamo Bay. However, experts such as Sweig say Cuban officials have since seized on the U.S. prison camp—where hundreds of terror suspects have been detained without recourse to trial—as a "symbol of solidarity" with the rest of the world against the United States.
* Cuban exile community. The Cuban-American community in southern Florida strongly influences U.S. policy with Cuba. Both political parties fear alienating what is seen as a strong voting bloc in an important swing state in presidential elections. Though the Bush administration's tightened travel restrictions upset many Cuban-Americans, hardline Cuban exiles still lobby for regime change. Several Cuban-Americans sit on the U.S.-based Commission for Assistance to a Free Cuba (CAFA).

What is CAFA?

CAFA was established by President Bush in 2003 to "help hasten and ease Cuba's democratic transition." Cochaired by then-Secretary of State Colin Powell, the commission is now headed by Secretary of State Condoleezza Rice and Secretary of Commerce Carlos Gutierrez. It issued reports in May 2004 and July 2006, the first of which recommended appointing a Cuba transition coordinator, which Bush did in September 2005.

What are the provisions of CAFA’s recent report?

The report calls for an $80 million "Cuban Fund for a Democratic Future"—a small increase from the initial report's $57 million—to support independent civil society on the island, fund university scholarships, and break the information blockade. Bush approved the fund on July 10, saying it would help the Cuban people in the transition from Castro's regime to "genuine democracy". While very similar to CAFA's initial recommendations, the updated report draws special attention to the so-called "Cuba-Venezuela axis," noting there are clear signs Cuba is using money from Venezuela to reactivate its networks in the hemisphere and plan a succession strategy.

Some analysts think the report's timing is less about any increase in the likelihood of a post-Castro Cuba and more about U.S. domestic politics and the upcoming midterm elections. In the Financial Times, Daniel Erikson of the Inter-American Dialogue calls the update "more of a symbolic recommitment to democracy in Cuba than a new set of policies to implement regime change." The Lexington Institute's Philip Peters questioned the need for such a report in the first place, writing in a June 29 Cuba Policy Report: "Given Cuba's improved economic position, normalized relations with the United States and an end to the embargo may not be urgent priorities for Castro's immediate successors."

Has Fidel Castro named his successor?

Not yet, though most experts agree that Raul Castro, the seventy-five-year-old younger brother of Fidel, is the likely successor. Brian Latell, former top Cuba analyst for the Central Intelligence Agency and researcher at the University of Miami's Institute for Cuban and Cuban-American Studies, thinks the transition to Raul may have already begun, and "there is a good chance that he will want better relations with the United States." Yet others predict that Raul will merely continue the current political regime. Florida International University's Martin says relations with the United States will remain bad because "this leadership thrives on these confrontations, this confrontational approach."
What is keeping Cuba on the State Sponsors of Terrorism list?

According to the State Department, Cuba remains on the list because it opposes the global war on terrorism, supports members of two Colombia insurgent groups, the Revolutionary Armed Forces of Columbia (FARC) and the National Liberation Army (ELN), and provides safe haven to several Basque ETA members from Spain. But some experts say there is little evidence to support the State Department's allegations.

What is the status of Cuba’s economy?

After introducing a few market reforms—opening up Cuba to tourism, allowing some foreign investment, and authorizing self-employment for certain occupations—in the early 1990s, the Cuban government is now reasserting central control. In 2004, Cuba reverted to a peso economy, with the government as the only body authorized to exchange pesos into dollars. The economy is divided into the following revenue streams:

* Tourism. Now the economy's largest source of revenue, tourists—primarily from Canada and the European Union—bring some $2.1 billion into the country.
* Remittances. Academic sources estimate remittances total between $600 million and $1 billion a year, most coming from families in the United States.
* Nickel. Cuba has the third-largest nickel reserves in the world. Nickel is currently the country's biggest export, bringing in roughly $800 million in 2004.
* Sugar. Sugar was long the primary industry in Cuba, but production has plummeted due to outdated factory equipment. In 1989, production was more than 8 million tons, while the harvest in 2004 was only 2.3 million tons.
* Foreign investments. Cuba receives hundreds of millions of dollars in foreign investments from Venezuela (some $900 million in 2004), Spain ($700 million), and China ($340 million).

How does Venezuela assist Cuba?

In October 2000, Chavez and Castro signed the "Integral Cooperation Accord," an agreement that specified an exchange of Venezuelan oil for Cuban goods and services. Venezuela now sells Cuba some 90,000 barrels of crude oil daily at preferential prices. Martin calls the relationship "very intimate," and says it is getting "stronger and stronger every year." But Chavez also helps Castro from an ideological standpoint. In addition to removing any incentive to approach other countries for economic assistance, Chavez's support means that Cuba no longer stands alone against the United States. This "provides them with a kind of insurance policy that they haven't had since the Soviet bloc collapsed," Sweig says. Other experts point to Cuba's burgeoning friendship with China as an indication of the growing worldwide support for Castro's regime. "There is this image now of close Cuban-Chinese relations which is very useful to Cuba, in the sense that they're not isolated," Smith says.