U.S.-Cuba Relations

Stephanie Hanson
News Editor, Council on Foreign Relations
Tuesday, February 26, 2008 3:07 PM

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 substantially weakened Castro's rule. In February 2008, Fidel formally resigned his office, sixteen months after transferring many powers to his brother Raul due to illness. Despite some stirrings of U.S. economic interest in Cuba, experts don't expect a move toward normalization of U.S.-Cuba relations anytime soon.

What is the status of U.S.-Cuba relations?

U.S.-Cuban 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 2006, U.S. companies exported roughly $336 million (PDF) worth of food and agricultural products to Cuba, according to the U.S. International Trade Commission; in 2001 that figure was virtually zero. Nebraska, Oklahoma, and Texas have all brokered agricultural deals with Cuba in recent years. Several initiatives are pending in Congress that would ease restrictions (PDF) on Cuban payments for U.S. agricultural exports, according to a Congressional Research Service report.

What is U.S. public opinion on the isolation of Cuba?

Some U.S. constituencies would like to resume relations. U.S. agricultural groups already deal with Cuba, and other economic sectors would like access to the Cuban market. 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 E. 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."

Fidel's resignation in February 2008 could spur a change in U.S.-Cuba relations, but experts don't expect any movement until a new U.S. president takes office in 2009. As this CFR.org Issue Tracker indicates, the presidential candidates are divided on what tack the United States should adopt toward Cuba.

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. 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.-Cuba 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 has in recent years resorted 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 the 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, hard-line Cuban exiles still lobby for regime change. Several Cuban-Americans sit on the U.S.-based Commission for Assistance to a Free Cuba (CAFC).

What is CAFC?

CAFC, the Commission for Assistance to a Free Cuba, 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 CAFC's 2006 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, 2006, 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.

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." Because Cuba is receiving substantive economic support from Venezuela, some experts say it may not have a strong incentive to push for an end to the U.S. embargo.

Will Raul Castro introduce significant changes in Cuba?

Most experts agree that Raul Castro will not introduce significant reforms in the near term. He has indicated a willingness to consider criticism of the Cuban system, however, and some believe he may introduce economic reforms that move Cuba toward a Chinese model, in which economic freedoms are introduced while the state retains a grip on political power. Raul has signaled he is willing to engage in dialogue with the United States. Brian Latell, formerly the top Cuba analyst for the Central Intelligence Agency and a researcher at the University of Miami's Institute for Cuban and Cuban-American Studies, says "there is a good chance that he will want better relations with the United States."

Why is 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 reasserted central control. In 2004, Cuba reverted to a peso economy, with the government as the only body authorized to exchange pesos into dollars. Since Raul assumed power in July 2006, he has encouraged dialogue about the Cuban system, and in particular, the economy. This has led experts to speculate he might institute economic reforms. Currently, the economy is divided into the following revenue streams:

• Nickel. Cuba has the third-largest nickel reserves in the world. Nickel is currently the country's biggest export, bringing in roughly $2.7 billion in 2007 (Reuters).
• 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.
• 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 2005 was only 1.3 million tons.
• Foreign investments. Cuba receives hundreds of millions of dollars in foreign investments from Venezuela, Spain, and China.

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. Florida International University's 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.