Commentary

No: The Embargo Harms Cubans and Gives Castro an Excuse for the Policy Failures of His Regime

By Daniel Griswold
This article originally appeared on Insight on the News on May 27, 2002.

Former president Jimmy Carter’s five-day visit to Cuba arguably did more to promote freedom on that oppressed island than the U.S. government’s trade and travel embargo has accomplished in four decades. In a live, televised speech to the people of Cuba, Carter challenged his host, communist dictator Fidel Castro, to allow free speech, free elections — and free religious worship. In addition to publicizing a pro-democracy petition campaign that the state-run Cuban media had ignored, Carter challenged the U.S. government to lift its trade and travel embargo, a position entirely consistent with his demand for more human rights in Cuba.

Since 1960, Americans have been barred from trading with, investing in or traveling to Cuba. The embargo had a national-security rationale before 1991, when Castro served as the Soviet Union’s proxy in the Western Hemisphere. But all that changed with the fall of Soviet communism. Today, a decade after losing billions in annual economic aid from its former sponsor, Cuba is only a poor, dysfunctional nation of 11 million people that poses no threat to U.S. or regional security.

A 1998 U.S. Defense Intelligence Agency report concluded that, “Cuba does not pose a significant military threat to the U.S. or to other countries in the region.” The report declared Cuba’s military forces “residual” and “defensive.” Some officials in the Bush administration charge that Castro’s government may be supplying biological-weapons material to rogue states and terrorists abroad, but the evidence is not conclusive. And even if it were true, maintaining a comprehensive trade embargo would be a blunt and ineffective lever for change. The Cuban embargo already is tighter than U.S. economic sanctions against Iraq, even though Iraq is a far greater security threat.

If the goal of U.S. policy toward Cuba is to help its people achieve freedom and a better life, the economic embargo has failed completely. Its economic effect is to make the people of Cuba worse-off by depriving them of lower-cost food and other goods that could be bought from the United States. It means less independence for Cuban workers and entrepreneurs, who could be earning dollars from American tourists and fueling private-sector growth. Meanwhile, Castro and his ruling elite enjoy a comfortable, insulated lifestyle by extracting any meager surplus produced by their captive subjects.

Cuban families are not the only victims of the embargo. Many of the dollars Cubans could earn from U.S. tourists would come back to the United States to buy American products, especially farm goods. The American Farm Bureau estimates that Cuba could “eventually become a $1 billion agricultural-export market for products of U.S. farmers and ranchers.” The embargo stifles another $250 million in potential annual exports of fertilizer, herbicides, pesticides and tractors. According to a study last year by the U.S. International Trade Commission, the embargo costs American firms between $684 million and $1.2 billion per year.

As a foreign-policy tool, the embargo actually enhances Castro’s standing by giving him a handy excuse for the manifest failures of his oppressive communist system. He can rail for hours about the suffering the embargo inflicts on Cubans, even though the damage done by his domestic policies is far worse. If the embargo were lifted, the Cuban people would be a bit less deprived and Castro would have no one else to blame for the shortages and stagnation that will persist without real market reforms.

Congress mistakenly raised the embargo to a new level in 1996 with the passage of the Cuban Liberty and Democratic Solidarity Act. Known as the Helms-Burton act, it threatens to punish foreign-based companies alleged to engage in the “wrongful trafficking in property confiscated by the Castro regime.” The law is legally flawed because it allows U.S. courts to rule on actions of parties who were not U.S. citizens when the alleged offense took place. As a foreign-policy tool, the law perversely punishes not the Castro regime itself, but some of our closest allies, such as Canada and the European Union.

Economic sanctions rarely work. Trade and investment sanctions against Burma, Iran, Iraq, and North Korea have failed to change the behavior of any of those oppressive regimes; sanctions have only deepened the deprivation of the very people we are trying to help. President George W. Bush and Republican leaders in Congress understand that economic engagement with China offers the best hope for encouraging human rights and political reforms in that country, yet they fail to apply that same thinking to Cuba.

Pressure has been building in Congress for a new policy toward Cuba. Two years ago Congress voted to allow limited sales of food and medical supplies to Cuba on a cash-only basis, and the House voted by wide margins in 2000 and 2001 to lift the travel ban (although that provision died in the Senate). Both the Senate and the House voted this spring in favor of third-party financing for farm exports to Cuba while debating this year’s farm bill, but the provision was stripped from the final bill in the conference committee.

A new House caucus, the Cuban Working Group, composed of 20 Democrats and 20 Republicans, unveiled a plan recently for easing the embargo. Speaking for the group, Rep. Jeff Flake (R-Ariz.) delivered a withering indictment of U.S. policy: “For over 40 years, our policy toward Cuba has yielded no results. Castro hasn’t held free and fair elections, he hasn’t improved human rights and he hasn’t stopped preaching his hate for democracy and the U.S. It’s time to try something new.”

Instead of relaxing the failed Cuban embargo, the Bush administration wants to continue the status quo. In a speech on May 20, the president reaffirmed his support for keeping the trade and travel embargoes in place until the Cuban government holds free elections. The administration already has quadrupled the number of Americans cited for violating the travel ban in 2001 compared with the number cited the last year of the Clinton administration. For example, one 75-year-old retired schoolteacher was fined $1,000 for a recent bicycle tour through rural Cuba. According to U.S. law, citizens can travel more or less freely to such “axis of evil” countries as Iran and North Korea. But if Americans want to visit Cuba legally, they need to be a former president or some other well-connected VIP or a Cuban-American.

The strongest supporters of the Cuban trade embargo are Cuban-Americans concentrated in Southern Florida — an important constituency in a key electoral state. Yet those very same Cuban-Americans routinely and massively violate the spirit if not the letter of the embargo. Each year, they send $800 million in hard-dollar remittances to their friends and families back in Cuba; another 100,000 Cuban-Americans actually visit their homeland each year through a special program for “emergency” visits (most of which occur around the Christmas holiday). In the name of politics, Cuban-American leaders want to restrict the freedom of other Americans to visit Cuba while retaining that freedom for themselves.

Lifting or modifying the embargo would not be a victory for Castro or his oppressive regime. It would be an overdue acknowledgment that the four-decade-old embargo has failed and that commercial engagement is the best way to encourage more-open societies abroad. The U.S. government can and should continue to criticize the Cuban government’s abuse of human rights, while allowing expanding trade and tourism to undermine Castro’s authority from below.

Instead of the embargo, Congress and the administration should take concrete if incremental steps to expand American influence in Cuba. First, the travel ban should be lifted. Yes, more American dollars would end up in the coffers of the Cuban government, but dollars also would go to private Cuban citizens. Philip Peters, a former State Department official in the Reagan administration and an expert on Cuba, argues that American tourists would boost the earnings of Cubans who rent rooms, drive taxis, sell art and operate restaurants in their homes. Those dollars then would find their way to the 300 freely priced farmers’ markets, to carpenters, repairmen, tutors, food venders and other entrepreneurs.

Second, restrictions on remittances should be lifted. Cuban-Americans currently can send a maximum of $1,200 a year to friends and relatives in Cuba. Like tourism, expanded remittances would fuel the private sector, encourage Cuba’s modest economic reforms and promote independence from the government.

Third, American farmers and medical suppliers should be allowed to sell their products to Cuba with financing arranged by private commercial lenders, not just for cash as current law permits. Most international trade is financed by temporary credit, and private banks, not taxpayers, would bear the risk.

Finally, the Helms-Burton law should be allowed to expire in 2003. Like every other aspect of the embargo, it has failed to achieve its stated objectives and has, in fact, undermined U.S. influence in Cuba.

In an April 4 speech on the importance of trade-promotion authority, President Bush noted that trade was about more than raising incomes. “Trade creates the habits of freedom,” the president said, and those habits “begin to create the expectations of democracy and demands for better democratic institutions. Societies that are open to commerce across their borders are more open to democracy within their borders. And for those of us who care about values and believe in values — not just American values, but universal values that promote human dignity — trade is a good way to do that.”

Bush should apply that same moral and practical reasoning to his administration’s policy toward Cuba. The most powerful force for change in Cuba will not be more sanctions or a short visit by a former U.S. president, but daily interaction with free people bearing dollars and new ideas.

Daniel T. Griswold is the associate director of the Cato Institute’s Center for Trade Policy Studies.