United States Cuba Relations And The Economies Politics Essay

United States Cuba Relations And The Economies Politics EssayEconomic sanctions can be and be a valuable tool for enforcing worldwide norms and protecting our national interests. The U.S. Policy of applying economic pressure in Cuba originated presently after Fidel Castro came into power in 1959. The United States first impose a full trade ban on Cuba on February 3, 1962, after the Kennedy institution became convinced that Castro was moving rapidly toward the establishment of a totalitarian governance in alliance with the Soviet Union. Castro had not only confiscated U.S. and other Cuban and hostile-owned properties on the island, only when had been providing indiscriminate support for violent revolution throughout the Americas as part of his efforts to carry on the Continental struggle against the Yankees, which he considers to be his true destiny. The trade ban was formally begun by President, John F. Kennedy, and has been supported by all successive Presidents. The U.S . embargo has had a major impact on the Cuban economy involving trade, wages, and jobs and in amplification, it has affected many United States dividing linees both directly and validatingly. The Helms-Burton dally is unitary of the major bills regarding trade with Cuba, and it has encountered oft opposition and controversy both in the United States and abroad. Only recently was the news media ban in Cuba lifted allowing American journalists to get news from within Cuba. Health care in Cuba is besides a major concern and is strongly affected by the Cuban Embargo.Our policy on Cuba is illustrative of one of the principal goals of economic sanctions-to encourage our friends and associate to adopt policies that can advance our common interests. Our allies and vocation partners disagree with our embargo and have urged us to alter the provisions of the Libertad travel, also known as the Helms-Burton enactment named after its principal sponsors.Cubas economy is in complete disa rray as a direct conduct of Castros insistence on adhering to a discredited economic model-that of communism. The impact of the U.S. embargo was offset during the Cold fight geezerhood by five to six trillion dollars in subsidies a year from Russia. The economic problems in Cuba were exacerbated by the demise of the Soviet Union. The U.S.S.R. annually gave nearly five billion dollars in subsidies to the Castro establishment. However, the communist regime dedicated a bulk of these funds to brinytaining an over-sized armament machine and to a massive internal bail apparatus. With the collapse of the Soviet Union, Cuba suffered a 35% decline in its gross domestic product surrounded by 1989 and 1993 (see chart), revealing an inherently dysfunctional economy.Food shortages and failure to provide basic public services incited disturbances that began to adventure the regime.In order for the communist government to survive, they had to undertake certain limited economic reforms beca use of these problems coupled with the inveterate embargo. In the mid-1990s, the Cuban government began to allow private citizens to offer certain services under exigent government scrutiny. Then in 1997, they introduced heavy taxes that forced many of these bulk out of business. In this domain, conflict peaked at 206,000 in 1996, and then fell to 170,000 in 1997. The Cuban government has actively encourage foreign investing, only when forbids private investment by Cuban citizens, leaving it hostile to private enterprise. not until 1993, did the Cuban government make it sub judice for Cubans to possess U.S. dollars. Since then, it has become the major currency. Failure by the communists to discharge major economic reforms has fostered the development of a large black market and vividly growing corruption. Those with gate to dollars can leveraging imported goods at government-run dollar stores. To earn dollar tips, many skilled persons, much(prenominal) as doctors, teac hers, engineers, and scientists are working in more remedial jobs in restaurants or as taxi drivers. Nevertheless, the Cuban government has not busy any credible effort to adopt market-based policies and continues to keep crocked control over the highly centralized economy. Over 80% of the work force are employed by the order.To encourage a democratic transition in Cuba, Congress passed the Cuban Democracy Act (CDA) in 1992, which tightened the embargo by prohibiting American owned or controlled subsidiaries located abroad from doing business with Cuba.The sanctions entrust also have an unanticipated indirect effect on the American economy too. In addition to the immediate impact of sanctions on trade with the target, Cuba, many American businesses pass on suffer. American businessmen read that the effects of make up limited unilateral trade sanctions will go well beyond the targeted sectors. They also argue that the effects of such implement will escape to linger long aft er the embargo is lifted because U.S. forms will come to be regarded as unreliable suppliers. Exports broken today may nasty lower exports after the sanctions are lifted because U.S. firms will not be able to supply antonymous split, replacement parts, or related technologies. These indirect effects may hunt down beyond the sanctioned products and even beyond the time period in which the sanctions are imposed.Jobs in the export sector of the economy tend to pay better than the average wages. Thus even in the full employment economy that the U.S. is enjoying now, the qualifying of exports still means a loss in wages-the export wage sector premium. The export sector wage premium is about 12 to 15 percent, taking into work out both direct and indirect employment. In 1995, the average salary in the manufacturing sector was about $34,020, so the premium paid by the export sector was about $4080 per worker (12% of $34,020). What these figures mean is that, as a consequence of U.S. sanctions, workers probably lost mingled with $800 one million million and $1 billion in export sector wage premiums in 1995.In some periods in the last two decades, when the U.S. economy was not flourishing with full employment, and when jobs were not right apart available, the loss of these exports may have added to the unemployment rolls. But even if the loss of exports had a zero effect on unemployment, it certainly reduced the number of good paying jobs. If the next twenty years see alike applications of sanctions in the United States, the cumulative loss of wage premiums could be around $20 billion (20 years times roughly $1billion a year). This is a heavy represent for us, and does not even take into account less tangible costs like making U.S. companies seem unreliable as suppliers and handing over business to foreign competitors.U.S. businesses are alarmed by the proliferation of trade sanctions by federal, state, and local governments and are pushing for formula mak ing it harder to use commerce as a weapon in international disputes. USA* convey and its 632 businesses and organization members argue that unilateral trade sanctions rarely work, and often, they do backfire and have a liberal affect ion American interests. Most of the analysis of the effectiveness of economic sanctions suggests they have limited utility for changing the behavior or governments of target countries. Previous research at the Institute for International Economics reason that US sanctions had positive outcomes in fewer than one in five cases in the 1970s and 1980s. a lot less is known about the costs of economic sanctions for the U.S. economy.Foreign investment in Cuba has failed abysmally to sports meeting the regimes own expectations. Many of the countries that had committed investment hardly reached what they had actually promised (see chart below). Originally targeted at $ five hundred million per year when new measures to attract foreign investment were introduc ed in 1990, the three-year investment total (FY 90-91 to 92-93) unless reached $500 million.For 30 years, the United States had a media ban restricting the media from having outposts in Cuba. American news bureaus were disagreeable down in Cuba in 1969 when Castros government expelled the last members of the Associated Press who had been operating in the country. Almost thirty years later, in February 1997, President Clinton stated that ten news organizations would receive certifys allowing them to resume operations in Cuba. The decision to lift the news media restrictions came at a time when questions concerning relations with Cuba began to cause policy rifts between the United States and our European allies.Despite this minor concession made by the White House concerning the media networks, the policies of the Clinton Administration remained avidly anti-Castro. Clintons main intentions concerning Cuba are to promulgate democratic reforms in the government and bring an end to cardinal decades of communism in Cuba.During Clintons first term in office, he signed into law, a bill that imposed sanctions on any country that chose to do business with the Castro government, the Helms-Burton Act. Our European allies argued that the law was an attempt by the United States to control the foreign policies of other countries. And they vowed to challenge the law before the newly formed humankind Trade Organization (WTO).After Cuban fighter jets shot down two passenger planes without specimen in February 1996, President Clinton showed no hesitation in signing this bill into law. Part of his intentions were to send Cuba a powerful message that the United States will not tolerate further loss of American life, as Clinton stated himself. The bill targets companies doing business in Cuba in an attempt to block crucial international investment sought by the Cuban government. It allows Americans to sue companies that profit from the home the Cuban government has confisca ted in the ult 35 years, a stipulation many U.S. allies have shown opposition for. One of the major reasons for the guile of the embargo was the Cuban Governments failure to compensate thousands of U.S. companies and individuals whose properties, large and small, were confiscated after the revolution. They specifically targeted and took property owned by U.S. nationals. Under the Cuba claims programs in the 1960s, the U.S. Foreign Claims Settlement Commission certified 5,911 valid claims by U.S. nationals against the Government of Cuba. The Castro government also took property from thousands of Cubans, some of whom have since become U.S. citizens. Under the law, any person who makes use of property confiscated from Americans by Castros government can be denied entry into the United States. Cuban-American Representative Ileana Ros-Lechtin, R-Florida, said the bill will penalize those who have become Castros new patron saints the foreign investors who callously traffic in American c onfiscated property in Cuba to profit from the misery of the Cuban worker. The bill also urges the president to seek an international embargo against Cuba, but currently, no other economic power observes an embargo. Cuba doesnt seem very concerned though. The main victim of this law will be the United States itself, said Paul Taladrid, Cubas deputy minister for foreign investment, because it will have to face the opposition of the rest of the world, or its closest allies.Although many U.S. allies fit parts of the policy, they have said that they agree with us on the key goal of encouraging body politic and human rights in Cuba. Even when supporting Cubas resolution at the UN General Assembly against the U.S. embargo of Cuba, The European Union made clear its opposition to Cubas human rights policies. The best known and most controversial parts of the Act are Title III and Title IV which created a private cause of action in U.S. Courts and prohibits visas and entry into the United States to those who traffic in confiscated property claimed by a U.S. national. The provisions extend well beyond Americas legal reach. These provisions prompted the European Union to initiate a complaint against the U.S. in the World Trade Organization (WTO). Canada and Mexico called for consultations under the provisions of NAFTA.Many think that the Act is a guide principle critics claim that it attempts to undermine the regime of Castro by depriving him of hard currency. This is futile, not only because the U.S. finds itself alone in its policy of isolating Cuba although sometimes a lonely policy may be the right one. both(prenominal) Canada, the biggest investor in the island country, and the European Union are still poised to retaliate against the United States. American allies reject the idea of making foreign policy under threat of lawsuit. Although the United States has such a problem with other countries not backing the embargo, an embarrassing example is still extant. Af ter the foundation of the state of Israel, an Arab boycott penalized foreign firms for doing business with the new state. America rightly opposed this policy now it essential prepare to reverse itself.U.S. allies in Europe and Latin-America are livid over Helms-Burton by what right, they ask, do U.S. Courts presume to impose sanctions against foreigners doing their own business in Cuba? Several of these countries have passed counteracting laws allowing their citizens to sue in their courts if Helms-Burton cases are brought against them in the United States. All this does is leave a potential legal rats nest benefiting nobody but the lawyers.Helms-Burton in section 306(b) gives the President authority to suspend the provisions allowing lawsuits against traffickers for successive periods of six months if he finds that such a step is essential to the national interests of the United States and will expedite the transition to democracy in Cuba. President Clinton has already exercised t his option several times to appease the dissention from our allies.We have been able to manage this dangerous disagreement with our close allies and trading partners and advance the promotion of democracy in Cuba. Under secretarial assistant Eizenstat reached an Understanding with the EU in April 1997 under which the EU agreed to suspend its WTO case and step up its efforts to promote democracy in Cuba. The parties also agreed to negotiate disciplines on property confiscated in difference of international law, including property in Cuba, and principles on conflicting jurisdictions. These discussions are in a crucial leg and, if an agreement is reached, the Administration will discuss with Congress the possibility of obtaining authority to waive Title IV of the Act.There is a large body of misconceptions about the present state of health care in Cuba, including the false accusation that it is the U.S. policy to deny medicine or medical supplies and equipment to the Cuban people. The end of Soviet subsidies forced Cuba to face the real costs of its health care system. Unwilling to adopt the economic changes necessary to reform its dysfunctional economy, the Castro government quickly faced a large budget deficit. In response, the Cuban Government made a deliberate decision to continue to spend money to maintain its military and internal security apparatus at the expense of other priorities including health care. In 1995, Cubas imports totaled $2.8 billion dollars, yet only $46 million dollars only 1.5% of overall foreign purchaseson medical imports for its 11 million people. By comparison, Cubas neighbor, the Dominican Republic, spent $208 million dollars on medical imports for its 7.5 million citizens in 1995.The US embargo does NOT deny medicines and medical supplies to the Cuban people. As stipulated in Section 1705 of the Cuban Democracy Act of 1992, the U.S. Government routinely issues licenses for the sale of medicine and medical supplies to Cuba. The o nly requirement for obtaining a license is to garment for end-use monitoring to ensure that there is no reasonable likelihood that these items could be diverted to the Cuban military, apply in acts of torture or other human rights abuses, or re-exported or used in the yield of biotechnological products. Independent non-governmental organizations, international organizations, or foreign diplomats can perform monitoring of sales.Since 1992, 36 of 38 license requests have been approved to U.S. companies and their subsidiaries to sell medicine and medical equipment to Cuba. Sales have included such items as thalamonal, depo-provera, pediatric solutions, syringes, and other items. The Department of Commerce declined the other two requests for licenses it received for failure to meet legal standards. Both of these exceptions to the general policy of approving commercial medical sales occurred in 1994.Moreover, the U.S. embargo on Cuba affects only U.S. companies and their subsidiaries. Other nations and companies are free to trade with Cuba. Should Cuba choose not to purchase from the U.S., it can purchase any medicine or medical equipment it needs from other countries. Such third-country transactions only cost an estimated 2%-3% more than purchases from the U.S. as a result of higher shipping costs.In closing, the essential particle of the tragedy of the Cuban people is not the United States-Cuba conflict rather, it is the struggle of eleven million people who seek to assert their human dignity and reclaim the inalienable political, economic and civil rights that were taken away from them by the Castro regime. The Cuban people have been victims of one of the most oppressive regimes of the twentieth century. The systematic violation in Cuba of each and every human right recognized in the United Nations Universal resolution of Human Rights has been faithfully documented in recent years at the UN Human Rights Commission and by respected human rights organizations throughout the world. The truth is there for all that wish to see. Impervious to the deplorable maintenance conditions of the people, the asphyxiating lack of liberty, and to repeated international calls for democratic change, Castro staunchly clings onto the reins of absolute power. Yet, despite the regimes relentless repression, those on the island are courageously demonstrating their commitment to change with increasing resolve. The U.S. economic embargo against the Castro regime has weakened its capacity to repress this universal desire for freedom and is an expression of moral support that strengthens the will of those who seek to bend from the hands of a dictator the destiny of a whole nation.