By Anya Landau French
Tuesday, February 19, 2008; 2:21 PM

Fidel Castro leaving office on his own terms is not the kind of change that successive American presidents envisioned for Cuba. In fact, it's a sign that U.S. efforts to isolate that country and bring down its socialist government have failed. It's a sign that those efforts should be revisited.

Despite a 46-year U.S. embargo, Cuba today is anything but a pariah state. Canada, China and Spain have made major investments in the country over the last decade, particularly in tourism, nickel and energy. Venezuela continues to trade cut-rate oil for Cuban doctors. And the island remains a popular destination for vacationers from around the world.

These relationships have helped the Cuban economy grow -- 7 percent last year, according to CIA estimates. Moreover, they helped prevent the frustration-fueled overthrow that U.S. leaders long hoped would end Castro's regime. In effect, treating Cuba as an all-or-nothing proposition netted the United States nothing. Our interests have gone unserved and our ideals unmet.

But while Castro's departure is playing out differently from expectations, it still provides an opportunity. And the U.S. can either continue a policy rooted in ineffective sanctions or tailor its policy to the new possibilities of post-Fidel Cuba.

Some countries friendly to the United States are already moving ahead. Spain has initiated a human rights dialogue with Cuba. Brazil's President Lula da Silva, who recently offered Cuba a $1-billion line of credit, provides the island an alternative to its dependence on Venezuela's Hugo Chavez.

There are many steps the next U.S. president could take, short of offering economic aid or normalizing trade relations, that could increase our influence in Cuba without giving up leverage associated with the embargo.

Initiating dialogue on security issues would be a good start. There's certainly plenty to discuss: stemming illegal immigrant flows, enhancing security around the U.S. base at Guantanamo, stopping U.S.-bound drug-runners transiting Cuban waters, and protecting against environmental damage to Florida's coastline due to foreign oil exploration in Cuban waters.

Dialogue on these issues could yield direct results. It could also build contacts and confidence that might put the next U.S. administration in a position to more effectively advance other pressing interests. These include political, labor and human rights in Cuba, settlement of U.S. claims there, and, eventually, negotiation of trade and regulatory regimes that will put American business interests in Cuba back on equal footing with foreign competitors.

Contact between our societies also ought to be encouraged. At minimum, the next president should permit the kind of people-to-people exchanges -- between artists, musicians, academics, students, religious groups and others -- that President Reagan embraced, successfully, with the Soviet Union in the 1980's. Programs of this kind flourished with Cuba until 2003 and allowed Cubans from all walks of life to exchange ideas and information with American counterparts.

The Bush administration's 2004 sanctions, targeting visits and remittances by Cuban Americans, should also be reversed. The contacts and the financial help are important lifelines to Cubans, many of whom are struggling to make ends meet.

The next U.S. administration additionally should consider talks on loosening the restrictions that keep U.S. and Cuban diplomats confined, for the most part, to the capitals in which they are posted. An agreement in this area would allow our diplomats to gain the insights and influence in Cuba that current policy denies them.

America's next president should harbor no illusions that modest policy adjustments will lead directly to the political and economic outcomes we seek in Cuba. But they would serve American interests and, if pragmatism eventually prevails in Cuba, help advance the interests of the Cuban people as well.

The writer is a senior fellow with the Lexington Institute.