Impact of Cuban Trade Embargo

The Impact of the Cuban business deal trade stoppage By Natalie tam-tam 2/25/09 pic Inter realmal problem Law BLAW 4320 pic Cuba, the largest island nation in the Caribbean on the moreoverton guildty miles off the coast of Florida, experient m each difficult struggles by dint of its blanket(a) history. It was the last major Spanish habituation to gain indep stopence, following a long struggle that was begun in 1868. It was in 1898 when the U. S. intervened during the Spanish-the Statesn war that it at long last all in all overthrew Spanish rule. The Treaty of genus Paris established Cuban indep residualence, which was granted in 1902 after a trio-year enactment period.The unite States and Cuba concluded a Treaty of trans achievement in 1934, which, among bracing(prenominal) things, continued the 1903 agreements that hired the Guantanamo Bay naval base to the descend together States (CIA earthly c at a timern Factbook). In the time ahead 1959, the unify State s had maintained strong ties with Cuba. more Ameri bay windows had m whatever non-homogeneous ancestry enthronements thither, and the dry land was a special place for tourists from or so the military personnelness. Since the wane of the U. S. -supported dictatorship of Fulgencio Batista in 1959, it was Fidel Castro who has in the main led Cuba end-to-end the years.It was in Febuary 19, 2008 when Fidel Castro finally ceded power to his brformer(a) Raul Castro. Since the absolute majority of Cubans were born(p) after the 1959 revolution, most of the Cuban volume commit grapplen no otherwise leader. hot seat Fidel Castro outlasted no fewer than nine American presidents since he took power in 1959 (Castro visibleness). Relations amidst the conjoind States and Cuba deteriorated rapidly as Fidel Castro and the Cuban regime locomote toward the donance of the unrivalled-party communist system. Cuba seized the assets of American citizens and U. S. irms including farms , factories, hotels, bank accounts, and real estate without compensation. It was finally on April 16, 1961 when Fidel Castro decl bed Cuba a socialistic state. Cubas communist revolution, with Soviet support, was brought to other countries end-to-end Latin America and Africa during the 1960s, 1970s, and 1980s. Castro maintained constraining relations with the Soviet man and wife and recreateed conjointly with the goals of Soviet communism by keep and provoking violent rebellious activities, as swell up as using troops intervention in other countries, until the fall of the U.S. S. R. in 1991 (Castro Profile). In response, the United States compel an censor on Cuba in October 1960, and, stone-broke diplomatical relations on January 3, 1961. This began the over forty-year period of tension in the midst of the U. S. and Cuba, start out with hot seat Kennedys failed Bay of Pigs assault in 1963 and the Cuban Missile Crises (CIA ball Factbook). Since 1961, Cuba portrayed m approximately(prenominal) difficulties as the reply of the U. S. censor and the trade stoppage had a spacious effect on some(prenominal)(prenominal) nations.It was in 1963 that the United States passed the Cuban Assets project Regulations, downstairs the authority of the Trading with the Enemy suffice. The phone piece was enacted in 1917 to ricochet craftsmanship with countries that argon hostile to the United States. The legislation gives the president the power to oversee or restrict any or all calling between the U. S. and its enemies in times of war. The utilisation of the rightfulness was to iso after-hours Cuba economicalally and policy-makingly. It illegalize all mess and financial proceeding between Cuba and the U. S. , and froze all U. S. held assets of the Cuban organization and of private Cuban citizens. It excessively out(p) almost all fail to Cuba by re look toers, student groups, journalists, athletes, and those inciteing to see warm fa mily members (Schaffer 268). After the fall of the Soviet Union in the early 1990s, the U. S. Congress treasured to pressure Cuba for democratic change. First in 1992, the U. S. Congress approved the Cuban body politic Act, restricting Americans from visiting the island, banning family remittances, and prohibiting unusual subsidiaries of U. S. ompanies from doing task with Cuba. Following a few years later, on March 12, 1996, President Bill Clinton signed the Cuban indecorousness and antiauthoritarian Solidarity Act, overly called the Helms-Burton Act. After this honor was signed, it further toughened the Cuban sanctions. It oblige penalties on contrary companies doing business in Cuba, it permitted U. S. citizens to file law of naturesuits against remote investors who made enforce of the American-owned property that was seized after 1959 by the Cuban authorities, and it denied an intro visa into the U. S. to such international investors.It was a truly polemical b ecause this entangle galore(postnominal) Mexican, Canadian, and European businessmen who did business in Cuba (268). The passage of the Helm-Burton Act caused a worldwide protest, primarily in Mexico, Canada, and the European Union, who argued that the Helm-Burton Act violated international law. A protest was filed with the World Trade constitution by the European Union, but was hang up when the Clinton Administration reassured that the law for visa restrictions chthonian Title III of the Helm-Burton Act would non be enforced against citizens in third world countries.The Act calls for the trade sanctions between the U. S. and Cuba to end as concisely as Cuba agrees to feature a democratically elected presidential term, abide by man rights conventions, opens its prisons to international inspection, damagess Cuban citizenship to Cuban exiles sustenance in the U. S. , and makes progress in return expropriated property to its rightful owners (268). To mean solar twenty-fou r hours, in that location ar more laws, rules, and regulations that derived from the U. S. sanctions against Cuba. Pre directly, most commercial imports from Cuba atomic number 18 illegal by law but remain listed infra the Trade Sanctions crystallize and Export Enhancement Act of 2000 (TSRA). at a lower place the Act, the sale of true items, including medicine and medical examination examination supplies, and rustic commodities devour been approved for export by proper(postnominal) regulations. fit in to the Act, The division of the Treasury is responsible in leave behind licenses that argon used to export these goods on a case-by-case scenario and authorizing Cuban travel-related proceeding that ar whole relating to marketing, sales negotiation, come with deli actually, and servicing of exports and re-exports that to a fault mustiness step up in line with the licensing policy of the subdivision of Commerce (U. S.Treasury part). The only sectors in which U. S. citizens may sell and service products to Cuba accommodate clownish commodities, medicine, and medical devices. The Treasury incision leave behind is withal be open to consider requests for specific licenses for add-on travel, educational exchanges (that atomic number 18 at least 10 weeks in length), and religious activities by individuals or groups that be associated with a religious organization. However, any U. S. citizen or corporation that is subject to U. S. law and engages in any travel-related transaction in Cuba violates the regulations.The Act specifically states that, The Cuban Assets Control Regulations affects all U. S. citizens and permanent residents wherever they are located, all state and organizations physically in the United States, and all branches and subsidiaries of U. S. organizations throughout the world (U. S. Treasury Department). If the regulations are not followed, therefore it may result in both civil penalties and criminal prosecution upo n return to the United States (U. S. Treasury Department). Today, traveling to Cuba also has legion(predicate) rules and laws that make traveling to the Cuba very complex.In 2004, President Bushs Commission for Assistance to a forgo Cuba placed a further simplification on the restrictions on family visits to Cuba. Visits by Cuban Americans to family in Cuba are permitted only once every 3 years quite of once every year. No humanitarian exceptions are given if there is any of a family illness or crisis button on in Cuba. Visits are cut back to devil weeks and strictly limited to fast family as defined by the U. S. Department of Treasurys Office of irrelevant Assets Control (OFAC), which eliminates the right to visit cousins, aunts, uncles, nephews, nieces, or more distant relatives (LAWG).Only if a traveler receives a license, and then a valid passport allow be required for entry into Cuba. The Cuban political science requires that travelers obtain their visas before they arrive to the sphere. If there are attempts to enter or overtake Cuba lawlessly, or there is in any kind of aid in serving Cuban nationals or others grapple Cuba then punishment is served by stiff toss away terms. Entering Cuban territory, territorial waters or airspace, which implicate being in spite of appearance 12 miles of the Cuban coast, without any forward permission from the Cuban government may result in arrest or other enforcement actions by Cuban authorities. harmonise to the U. S. Department of State, most immigration violators are subject to prison terms that pose from four years for illegal entry or exit to as some(prenominal) as 30 years for certain cases of assisting Cuban migrants to attempt to leave Cuba illegally (U. S. Department of State). Family remittances or gold sent to Cuba also name specific rules and regulations that must be followed by the tidy sum residing under U. S. law. jibe to the U. S. Department of State, U. S. ersons aged 18 or old er may pull money to members of the remitters immediate family in Cuba of up to $300 per mob in any consecutive three-month period, regardless of the number of members of the remitters immediate family residing in that household. The law also states that no member of the household can be a forbidden official of the Government of Cuba or a prohibited member of the Cuban Communist Party (U. S. Department of State). other laws that are also a part of the on going U. S. censor with the Cuban government involves the use of money in Cuba that U.S. travelers are limited to use during their stay in Cuba. U. S. people traveling to Cuba to visit their family or traveling for other purposes can spend no more than $50 per day on non-transportation-related expense in Cuba, and up to an additional $50 per trip to cook up for transportation-related expenses in Cuba. However, professionals such as journalists, photographers, or any other kind of commissioned travelers may spend additional money for their professions that are directly related to what they read in order to fulfill their work (U. S. Department of State).It is also enkindleing to know that U. S. citizens and permanent resident aliens are not allowed from using their recognition cards, personal checks, or travelers checks that are drawn from U. S. banks in Cuba. U. S. realisation card companies do not accept any kind of vouchers from Cuba, and, at the uni draw time, Cuban shops, hotels and other places of business do not accept any types of U. S. credit cards (U. S. Department of State). Today, the U. S. Cuban embargo has become one of the most controversial impressions upon numerous countries throughout the world.There have been umpteen advocating for a change of the latest policies towards Cuba for some time now. The sanction has infinitely been condemned and voted against by almost all nations throughout the world. For the 16th consecutive year, the U. N. General host recommended that the U. S. ended the embargo. In 2006, a fit of 183 member nations of the U. N called on the U. S. to end the sanctions with Cuba (Sierra). In 2007, the 192-member General Assembly passed the flyer by 184 votes to four, with one abstention (U. S. Urged). consort to Remy Herrera, The normative content of this embargo and its rules, which the U. S. intends to see on the international community with its coloured sanctions is a violation of the spirit and garner of the United Nations Charter and of the Organization of American States, and of the very fundamentals of international law (Herrera). This excessive extension of the territorial legal power of the U. S. , Herrera adds, Is contrary to the principle of national sovereignty and to that of non-intervention in the internal choices of a foreign state, s recognized in the jurisprudence of the supranational Court of Justice (Herrera). concord to Richard Schaffer, even the Vatican protested Helms-Burton, claiming that it affixd economi c ugly of the Cuban People. Many trade groups have also argued against the law because they believed that economic involvement actually would promote freedom in additarian countries. The U. S. firms that are hoping to engage in the business activities in Cuba also try out an ending to the U. S. trade sanctions (Schaffer 269). match to U. S. representative Nancy Pelosi, many feel that the lifting of the travel restrictions to Cuba, family remittances, and trade exchange are necessary and are some of the most important issues in the policy changing process that the U. S. of necessity to undergo in order to have better relations with Cuba (Pelosi). Ironically, surveys of the American world opinion show that the vast majority of Americans favor ending sanctions as well, and recognizing the government of Cuba (Schaffer 269). concord to a recent sail from USA Today that took place between February 21- 24, 2008, 61% of 2,021 adults nationwide favored re-establishing U.S. diplomatic relations with Cuba, 29% opposed, and 10% of the people were unsure (PollingReport). Over Forty-five years of communism have left the island nation an economic ruin and the U. S. embargo had many diverse do on Cuba. According to a BusinessWeek name by Geri Smith, The Cuban government has always referred to the embargo as a obturate, a word that has a more sinister tone than embargo (Smith). Cuba went through many difficulties as the result of the U. S. embargo since 1961 and suffered much more since the analyse of the Soviet Union in 1991.The country con bm a severe economic downturn, which really caused the Cubans living standards to significantly fall. The disappearance of Soviet aid following the fizzle of the USSR forced the government to introduce nasty rationing of energy, nutriment, and consumer goods, as well as the withdrawal of the former Soviet one-year subsidies that were worth(predicate) $4 gazillion to $6 zillion (landed estate Profile Cuba). Since then, i t has taken action with limited reforms in order to increase enterprise efficiency and improve some of their economic problems which admitd their serious shortages of food and goods.Due to the economic problems and domestic inefficiencies that Cuba faced during the 1990s, President Castro allowed a few travel towards a more market-oriented system. In 1993, the U. S. horse was accepted by Cuba and allowed to circulate throughout the nation. Because of their lack of basic necessities and few consumer goods, Cubas rescue persisted with the help of Canadian, European and Latin American inve short-term memoryents. Essentially for Cuba, the nation also developed closer relations with china and Venezuela.China invested in Cubas nickel industry and provided Cuba support in the form of trade credit, technology, and inve short-term memoryent capital epoch Venezuela provided supply to cheap fuel (Smith). Since late 2000, Venezuela has been supplying about 100,000 barrels per day of petr oleum products. Cuba has been paying for this oil with the run of Cuban personnel in Venezuela, including 20,000 medical professionals (CIA WorldFactbook). After market factors improved, in 2004 the U. S. dollar bill transactions in Cuba were banned and a 10% tax was imposed on the dollar-peso conversions. According to the CIA World Factbook, Cuban exports total $3. 31 zillion and their major exports entangle Sugar, nickel, tobacco, fish, medical products, citrus, and coffee partners. The countries that Cuba mainly exports to include the Netherlands (21. 8%), Canada (21. 6%), China (18. 7%), Spain (5. 9%) (CIA WorldFactbook). On the other hand, Cuban imports have totaled $10. 86 billion and consist mainly of petroleum, food, machinery and equipment, and chemicals. The countries that Cuba mainly imports from include Venezuela (26. 6%), China (15. 6%), Spain (9. 8%), Germany (6. 4%), Canada (5. 6%), Italy (4. 4%,) the U. S. (4. 3%), and Brazil (4. %) (CIA WorldFactobook) Today, C uba has two currencies in circulation, which include the Cuban peso (CUP) and the convertible peso (CUC). The Cuban peso (CUP) is specifically for the Cubans, season the convertible peso (CUC) is strictly for tourists and foreign businessmen. According to a BBC intelligence agency article by Michael Voss, The average Cuban net income of 400 pesos a month is worth about $16, yet almost everything accessible in the shops has to be give for in the convertible pesos (CUCs) (Voss). Why has the economy travel to convertible pesos when workers are paid in the national funds? declared one of the students in the article. You need to work for two old age just to buy a toothbrush (Voss). The problem with the dual currency is one of the biggest challenges that negatively influences the Cuban economy. Cuba faces many hardships because of the economic problems throughout the country. Many of the effects have caused an increase in prostitution, corruption, dour marketeering and desperate e fforts to escape in search of a better life (Country Profile Cuba). Many Cubans had enough with the hardships and risk their lives to escape from the country. Thousands have tried to escape through the sea in a waterborne exodus to Florida, but many have drowned. Castro Profile) According to the BBC News article, Castro Profile of the majuscule subsister, Even his own daughter Alina Fernandez prefers a life of exile as a dissident in Miami to rule under her despotic father (Castro Profile). According to the CIA World Fact Book, illicit migration to the U. S. , using homemade rafts, alien smugglers, or air flights, is yet a continuing problem. The U. S. Coast support seized 2,864 people trying to cross the pass of Florida in the year 2006 (CIA WorldFactbook). Cuba has also been ambidextrous with the UNs top human rights forum, over specific rights abuses.The UN has insisted that Cuba allows for freedom of expression and to release jailed protesters who have protested against t he government (Country Profile Cuba). The U. S. has caused Cuba many economic damages because of the U. S. embargo. According to U. S. interpreter Nancy Pelosi, The over-45-year US economic, commercial and financial blockade of Cuba has translated into over 89 billion dollar losings for the U. S. (Pelosi). According to the article, The Effects of the U. S. embargo Against Cuba, the direct economic losses for Cuba by the U. S. embargo would exceed 70 billion dollars.The damages were estimated by calculating amounts of Cubas potential earnings and unnecessary losses since the institution of the U. S. embargo in 1961. The embargo negatively affected all of the sectors in Cuba, which also directly imposed on the major driving forces of the Cuban economy, which include tourism, foreign direct investments (FDI) and currency transfers (Herrera). Cuba became very limited in having access to technologies and various resources because of the obstacles that were forced by the Unites States. According to a Business Week article, Trade and investment open up economies to crude ideas. carrel phones, the Internet, and other senior gamey-tech communication technologies are detrimental to closed-minded bureaucracies (Farrel). Since December, 2001, when food and agricultural products were allowed to be exported to Cuba, over $2 billion dollars worth of goods were earned by U. S. firms and shippers (LAWG). According to the article, The Travel Industrys travail to Unlock Cuba, loosening the restrictions could boost the U. S. economy in the long term by as much as $1. 6 billion annually and create as many as 23,000 new jobs (Unlock Cuba). In this way, Cuba has the potential for economic growth if the U. S. nds or even loosens their trade sanctions. This can also further ease the hardships and economic issues of need in Cuba. Relations between the United States and Cuba are hoping to improve in the future, peculiarly because Fidel Castro retired his control over Cuba. Many accept that Cuba will be open for business and that there may be signs of new beginnings of change on the economic front under Raul Castro (Smith). Some, however, are more quizzical of the idea. According to a recent canvas tent from USA Today that took place between February 21- 24 of 2008, only 37% of 2,021 people felt that the situation for people in Cuba would get better.A majority of 51% felt that the situation for people in Cuba would stay the same, 6% felt that it would get worse, and 6% felt they were unsure (PollingReport). Fortunately, Raul Castro has introduced a series of reforms since taking over as president from his brother Fidel in February and has already taken move on improving certain services for the Cuban in the public eye(predicate). The new leader started focusing on some of the most-mentioned problems, such as spotty public transportation and the low wages paid by the government to private farmers (Smith).According to the article, Cuban Leaders Plan muc h Reforms, these reforms have also included the removal of some restrictions on the purchase of electrical goods such as officious phones, cook ovens and DVD players. According to the article, Cubans have been inform to take out 7,400 new mobile phone contracts in the 10 days since the restrictions were eased. The country has also lifted a ban on its people staying in hotels previously reserved for foreigners (Cuban Leaders). It will be interesting to see if more market-oriented steps will take place with the Raul Castros new regime. Another major issue that will be crucial for many U.S. businesses as in brief as the embargo ends in the future is the growing interest in the tourism sector of Cuba. According to an article by Sucharita Mulpuru, Americans represent only a small part of the or so 1. 2 million visitors who come to Cuba every year, mainly from Canada, Spain, France, Germany, and Britain (Mulpuru). Tourism continues to inspire high hopes among many investors. In the article, Enzo Alberto, the Canadian-Italian CEO of ICC, a major investor in the islands Internet foot states, I believe that Cuba could be to America like Hong Kong is to Asia, (Mulpuru).Many countries pour well-nigh $2 billion into the economy, outstripping revenues from sugar and other core crops such as tobacco (Mulpuru). According to the article, A Warmer clime for Trade with Cuba, the industry argues that the island nation is a potential source of needed revenues that would be able to boost both the travel business and the U. S. economy while opening to tourism and foreign investment in Cuba. As a result, this will also boost the economy as well as the currency reserves of Cuba. Unfortunately, all of this potential to help both economies and many people in both nations will not end until the U. S. rade embargo ends and the Cuban government loosens its stranglehold on the economy. It will be interesting to see how the U. S. embargo will be affected by the policies of the fut ure elected president of the U. S. Of the three leading Presidential candidates, only Democratic contender Senator Barack Obama has stated that he would be willing to sit down and prattle with Raul Castros government, as long as human rights are on the agenda. On the other hand, Senator Hillary Clinton stated said she would not do so until Cuba started to implement economic and political reforms, while Senator John McCain has kept President George W.Bushs policy and states that dialogue are off until Cuba begins a transition to a free and open rescript and releases all political prisoners (Smith). According to the Associated Press, the presidential candidates are expected to lightly prove the question of lifting the embargo during their campaign. According to their article, Five-decade U. S. Trade censor with Cuba expect to Outlast Fidel Castro, there is a great deal of sensitivity on the issue, especially in states with high populations of Cuban immigrants such as Florida (Ass ociated Press). The entrepreneurs of the U. S. ave seen their foreign competitors take advantage of opportunities in Cuba. U. S. businesspersons can only hope that the trade and travel restrictions will be lifted eventually, so that they can tap the potential markets in Cuba especially in the tourism and agricultural sectors. This is very unlikely to happen soon because of the ongoing disputes between many in regards to the Cuban embargo. The impact of the Cuban embargo caused many diverse effects for both nations, but with new policies and politicians that are create for the future, this story can be the end of an old era. Works Cited ACN Cuban News Agency. 2007, May 2). Nancy Pelosi Says U. S. Blockade of Cuba Should be Lifted. Retrieved April 24, 2008, from http//www. cuba word of honor. ain. cu/2008/0425nancypelosi. htm Alomso, Cynthia C. The Travel Industrys Push to Unlock Cuba. BusinessWeek. 27 August 2003 Associated Press. Five-decade U. S. Trade embargo with Cuba Expecte d to Outlast Fidel Castro. 20 February 2008. Retrieved on April 24, 2008 from http//www1. whdh. com/news/articles/national/BO73631 BBC News. (2008, February 19). Castro Profile of the Great Survivor. Retrieved April 24, 2008 from http//news. bbc. co. k/2/hi/americas/244974. stm BBC News. (2008, April 12). Cuban Leaders Plan more(prenominal) Reforms. Retrieved April 24, 2008, from http//news. bbc. co. uk/2/hi/americas/7343883. stm BBC News. 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