HAVANA — U.S. trade sanctions against Cuba have been in place for 54 years, but never before have the presidents of both countries said the same thing about them.
Lift the embargo, Raúl Castro says. Lift the embargo, President Obama says, urging Congress to do so.
Exactly how that is supposed to happen is the emerging point of contention in a still-fragile relationship marinated in distrust. Nearly a year has passed since the presidents put the countries on a path toward normalization, but with Obama out of office in 14 months, their window of opportunity is shrinking.
After announcing last month the most significant loosening of Cuba sanctions in decades, the White House says there is little else it can do without Havana’s help. If the Castro government engages more readily with American businesses, signs new contracts and green-lights more connections for travel and telecommunications, business interests will poke so many holes in the embargo that it will fold, engagement advocates say.
But so far Cuban authorities have demonstrated little appetite for such “carrots,” as Obama has described them, saying the sanctions are still too big a stick.
Senior U.S. officials say that the full removal of the embargo will only be possible if Cuba makes democratic reforms, describing embargo opponents in Congress as “desperate” for gestures from the Castro government.
A visit to Havana this week by U.S. Commerce Secretary Penny Pritzker only seemed to underscore how far the governments have to go. With no new agreements or business deals to announce, the commerce secretary — the first to make an official visit to Cuba in 65 years — seemed like one more in the parade of U.S. lawmakers and corporate leaders who have returned from Havana with little more than rum and cigars to show for it.
“There is much we in the United States do not fully understand about the Cuban economic system,” Pritzker told reporters Wednesday evening at the end of a 36-hour visit. “I’m here because we need to develop relationships with each other and start to learn from one another.”
Business ties will not be rebuilt overnight, nor in a tit-for-tat way, she said.
“The president wants to see the embargo lifted. I think the president recognizes that’s going to take time and we’re going to have to demonstrate progress in the relationship, and that both President Castro and President Obama have a limited amount of time. That’s a point [Cuban] leaders did raise with me,” Pritzker said.
“But we’re very clear: There are things that have to happen on both sides.”
Trade analysts say even less is happening on the Cuban side this year despite the normalization of diplomatic relations in June and Obama’s latest move authorizing some U.S. businesses to trade with Havana, hire Cuban workers and establish a physical presence on the island.
Cuba has implemented a roaming agreement with U.S. carrier Verizon and signed a deal with a New York state-based drug company to market a Cuban cancer drug.
But other new opportunities remain unfulfilled. The U.S. government has eased restrictions on sales of goods and services to private entrepreneurs and cooperatives, but because imports on the island must be routed through state agencies, Cuba’s hairstylists, computer technicians and restaurateurs continue to bring in American supplies the old way: in travelers’ suitcases.
More notable, analysts say, is the decline of U.S. food exports to Cuba by more than 40 percent to a projected $150 million for 2015, down from a peak of $710 million in 2008. Because the U.S. sanctions don’t allow food sales on credit — a norm of international trade — Cuba says it can get better deals in Brazil, Canada and elsewhere.
When pressed, Cuban officials insist the limits to trade between the two countries are all on the U.S. side. The trade sanctions have a lot of teeth left, they say, continuing to ban most Cuban exports, block U.S. tourism and make banking nearly impossible.
And the threat of U.S. fines continues to squeeze the Cuban economy by scaring away foreign investors.
At a news conference Thursday organized by Cuba’s Foreign Ministry on the effects of the sanctions, tourism official Maria del Carmen Orellana said a French real estate investor interested in signing a condominium deal recently pulled out because his Paris-based bank, PNB Paribas, now bars its clients from doing business with Cuba. The bank agreed to a $9 billion fine last year by the U.S. Treasury Department for violations of economic sanctions related to Cuba, Sudan and Iran.
The steps Obama has taken to date don’t go far enough to ease the stigma, officials said.
“These measures have led to something that is better than what we had before, and help create an atmosphere for engagement, but they don’t create the conditions for normalization,” Cuban Chamber of Commerce President Orlando Hernandez Guillen said after Pritzker’s visit.
John Kavulich, whose U.S.-Cuba Trade and Economic Council tracks bilateral commerce, called Pritzker’s visit this week “premature” and “ill-timed.”
“It devalued the prestige and significance of a visit by a Cabinet member,” Kavulich said. “When a commerce secretary goes to Cuba, it should be to preside over an agreement that’s been reached.”
If U.S. businesses don’t get a clearer signal about Cuba’s intentions, he said, the government risks losing the momentum built up so far this year in favor of lifting the embargo.
“There needs to be action to get a reaction,” Kavulich said. “Cuba doesn’t trust the United States business community and doesn’t trust the U.S. government, and both sides recognize that. But the Cuban government needs to demonstrate an interest in commercial relations other than visits to discuss commercial relations.”
Retired Cuban diplomat Carlos Alzugaray, now a trade consultant, said Cuban officials would “be stupid not to want more trade.”
“They know they have to advance as much as possible in the time that Obama has left,” he said. “But Cuba thinks the U.S. can do more. If they give what the Americans want right now, they won’t be stimulated to do more.”
Pritzker said Castro government officials made it clear to her they want a two-way street — and access to U.S. markets for Cuban goods and services, most of which are under the control of state companies run by the military.
An aviation agreement between the two countries that would allow U.S. airlines to resume regular service is likely to be held up if Cuba insists its jets be allowed to land in the United States, because U.S. plaintiffs have won massive judgments against the Cuban government in federal courts, and Cuban planes could be impounded when they touch down on American runways.