Obama Needs to Stop Playing Small Ball With Cuba
Or a Republican in the White House, backed by a fearful, anti-Cuba Congress, could undo -- in an instant -- all his good work.
BY FEBRUARY 1, 2016On Jan. 26, the Obama administration rolled out a new slate of regulatory reforms that further relax the embargo against Cuba — the third such action since Obama and Cuban President Raúl Castro announced their intention to normalize relations in December 2014. The goal is to stimulate commerce and create a constituency in the business community that will defend Obama’s legacy of better relations with Cuba — even if there’s a Republican in the White House in 2017.
The Obama administration’s recent moves lower some long-standing barriers to U.S.-Cuba commerce. The big changes include one that will license U.S. firms to privately finance authorized exports, and another to allow sales to Cuban state enterprises, so long as the sales “meet the needs of the Cuban people,” as determined by the Department of Commerce. Another obstacle that will disappear: the ban on letting Cuba buy U.S. products on credit, which has put U.S. exporters at a major disadvantage to competitors in Europe and Asia. Under the new rules, this restriction will now be lifted across all sectors of approved trade except in agriculture, where credits are still prohibited by the 2000 Trade Sanctions Reform and Export Enhancement Act.
By allowing U.S. firms to sell to state enterprises so long as these sales benefit the Cuban people, the new regulations open a potentially wide field of exports, although the exact scope of what is permissible has been left intentionally vague. Among the examples of eligible goods are those for artistic endeavors, education, food processing, public health and sanitation, and residential construction — by no means an exhaustive list, but one can imagine that most consumer staples might be eligible for export.
But despite opening these important new avenues for business, the regulations did not go nearly far enough to calm the fears and remove the regulatory obstacles that still impede U.S. business deals with Cuba. Without some notable commercial successes, the business community could lose interest in Cuba and in lobbying Congress to lift the embargo, leaving Obama’s normalization project dead in the water.
