The presentation identifies the main features that characterize the undergoing process of normalization of bilateral relations between Cuba and the United States and explores the impacts these process may have in the rest of the Caribbean.
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Caricom and Cuba: A balance since 17D
1. CARICOM and Cuba in a changing
hemispheric environment:
A balance since 17D
Dr. Jacqueline Laguardia Martinez
Institute of International Relations, UWI
Jacqueline.Laguardia-Martinez@sta.uwi.edu
2. Points to explore
1. Forces to change: Cuba - USA
2. The 17D: facts and consequences
3. Cuba and CARICOM in the new context
4. 2016 and recent developments
3. End of 2014: the right moment to change
• Growing understanding within the
U.S. of the failure of the U.S. policy
towards Cuba.
• Younger generations of Cuban-
Americans want the U.S. to have a
normal relation with Cuba.
• U.S. businessmen are interested on
making business in Cuba.
• Obama’s presidency second term.
• On 2014, Cuba and the
European Union opened
negotiations on a bilateral
agreement on Political Dialogue
and Cooperation.
• Latin America and the
Caribbean have asked the U.S.
to change its policy towards
Cuba: Cuba was invited to
attend the Summit of the
Americas in April, 2015.
4. Some revealing signs
• April 17–19, 2009: Fifth Summit of the Americas in Port of Spain.
President Obama publicly committed himself to look for a ‘fresh
start’ in the relations between the two countries.
• December 10th, 2013: President Barack Obama shook hands with
President Raúl Castro in Nelson Mandela’s state memorial
service.
• October, 2014: The New York Time’s editorials
5. Turning point: December 17th, 2014
•Both Presidents Obama and Castro addressed their
countries and international audiences, almost at the
same time.
•Both countries released prisoners.
•They announced the agreement to renew diplomatic
relations.
6. President Obama’s administration towards Cuba before 17D
• To allow Cuban-Americans to
travel easier to the island and to
send monetary remittances to
relatives.
• To allow American citizens to visit
Cuba for educational travel.
• Bilateral cooperation in drug
interdiction, natural disasters,
migration and fighting Ebola in
Africa.
• It has being particularly aggressive with
companies that negotiate with Cuba or
Cuban citizens (BNP Paribas, Red Bull).
• It continued mechanisms to organize and
promote internal opposition.
• Cuba continued included in the List of
States promoting international terrorism
made by the U.S. State Department.
• It bypassed the UNGA Resolutions that
demands the end of the embargo.
Sense of failed policy
7. Some advances until May 2016
• Rounds of negotiation and technical meetings: immigration; cultural and academic
exchanges; environment; natural disasters; Internet; drug interdiction; air safety;
remittances; humanitarian aid; democracy; human rights; cyber security
• Bilateral Agreements and MOU: telephone calls; postal service; civil aviation; ferry
services; security on maritime navigation; agriculture
• Cuba was excluded from the list of State sponsors of international terrorism in 2015
• Opening of Embassies in 2015 (July 21 Cuba in Washington/August 14 U.S in Havana)
• A Cuba-U.S. Bilateral Commission was established on August 2015
• High-level visits, U.S. representatives to Cuba: Sec. Anthony Foxx (Transport); Sec.
Thomas J. Vilsack (Agriculture); Sec. Penny Pritzker (Commerce); Sec. John Kerry (State);
Virginia’s Gov. Terry McAuliffe; Texas Gov. Greg Abbott; Arkansas Gov. Asa Hutchinson;
New York Gov. Andrew Cuomo. Cuban representatives to the U.S.:
Rodrigo Malmierca Díaz (Minister of Foreign Trade and Foreign Investment)
8. Some advances until May 2016
• January 2015: U.S. companies authorized to export limited goods; a general license to
establish mechanisms to provide commercial telecommunications services in Cuba or
linking third countries and Cuba was approved; permissible use of U.S. credit and debit
cards; financial institutions may open accounts at Cuban banks.
• February 2015: Cuba’s small private business sector authorized to sell goods to the U.S.
• March, 2015: Restoration of direct telecommunication connection.
• April, 2015: Roswell Park Cancer Institute of Buffalo, New York, signed an agreement with
Cuba’s Center for Molecular Immunology to import the Cuban lung cancer vaccine with a
clinical trial in the United States.
• January 2016: More sectors of U.S. business authorized to export goods and services to
Cuba; more general licenses for categories of authorized travelers to Cuba.
• March, 2016: First flight from the United States to Cuba after agreement on restoring direct
postal service.
• May, 2016: T-Mobile signed an interconnection and roaming agreement with Cuba-based
operator ETECSA (It is understood that AT&T plans to sign a roaming deal with ETECSA as well).
9. President Obama’s visit to Cuba, March 20-22, 2016
Positive for the
normalization process
President Obama
announced the
authorization to individuals
to travel to Cuba for
‘people to people’
educational trips, allowed
Cuba to use American
dollars in international
transactions and other
measures to facilitate trade
and maritime
transportation.
10. What has not happened yet
The embargo/blockade is still in place
February 2016: A review of the Treasury Department’s enforcement actions involving
Cuba show eight sanctions cases since 17D. Fines imposed since the rapprochement
began have totaled USD 5,278,901, according to Treasury. Some of the companies fined
are WATG Holdings, Inc., PayPal Inc., CGG Services, Halliburton Atlantic and Halliburton
Overseas.
October 28, 2015: The United States voted against the UNGA Resolution criticizing the
U.S. economic blockade against Cuba (191-2).
The economic damages caused to the Cuban people by the blockade have been set at
more than 800,000 billion USD.
If the blockade were eliminated, exports from the US to Cuba could reach 4,300 million
USD a year and Cuban exports could be 5,800 million USD annually (Gary Hufbauer and
Barbara Kotschwar, 2014).
11. Embargo after 17D: nonsenses and contradictions
• In May, 2016, the U.S. State Department announced that coffee is among
the products Cuba can export to the U.S. In May, 2016, the National
Association of Small Farmers announced it has been impossible for them
to export Cuban coffee to the U.S. (high tariffs since Cuba has no
preferential trade agreement with the U.S.; impossibility of using U.S.
dollars in international transactions; impossibility of relaying in any Cuban
foreign trade enterprise/institution)
• In May, 2016, the Cuban government confirmed Cuban institutions have
not been able to use U.S. dollars for international transactions in spite of
President Obama announcement during his visit to Havana.
12. There are four aspects of the embargo that the President of the
United States cannot act:
1. The prohibition on US subsidiaries in third countries from trading
products with Cuba (Torricelli Act, 1992).
2. The prohibition on carrying out transactions with US properties
that were nationalized in Cuba (Helms-Burton Act, 1996).
3. The obligation to pay in cash and in advance for purchases of
agricultural products by Cuba in the US (Trade Sanctions Reform
and Export Enhancement Act of 2000).
4. Preventing American citizens from traveling to Cuba as tourists
(Trade Sanctions Reform and Export Enhancement Act of 2000).
13. The embargo in hands of the Congress
• The total dismantling of this policy does require Congressional
approval.
• The US Congress has not approved any of the bills seeking to
eliminate some of the embargo regulations.
• Around 40 legal initiatives regarding Cuba have been presented in
Congress. The purpose of some is, though, to reinforce several
fundamental aspects related to the implementation of the
embargo and prevent the approval by the President of new
executive measures and the implementation of those which have
already been adopted.
14. What else can President Obama do?
The Helms-Burton Act codified the embargo into
law along with the bundle of executive orders that
sustain it.
Nevertheless, that same law preserved the broad
powers of the President, via the issuance of
licenses to allow different transactions prohibited
by the embargo.
16. In the U.S.
• American visits rose 76 % to
161.233 in 2015, not counting
Cuban-Americans.
• Until May, 2016: 94.000
Americans visited Cuba.
• U.S. businesspersons and
companies visiting Cuba.
• About 50 American businesses
attended the Havana
International Fair (FIHAV) on
November 2015.
Out of the U.S.
• More tourism: In 2015 Cuba received a
record 3.52 million visitors, up 17.4 % from
2014. In Havana 1,685,381. In the first
quarter of 2016, 572,000 visitors in Havana
(New 7 Wonders Cities)
• More FDI coming from traditional partners:
hotels, airlines, technology.
• Cruise ships: Ponant, Celestyal Cruises
• Mariel Special Economic Zone.
• Debt renegotiations: UK, Spain, Netherlands,
China, Spain, Japan, Paris Club.
17. • Cuba was added to Twitter’s list
• Netflix and Apple removed Cuba from its restricted country list for foreign trade
• Boost Mobile connects Miami customers with Cuba on new prepaid plans
• Verizon Communications signed a direct interconnection agreement with the Cuban
Etecsa
• Priceline Group makes Cuban hotel rooms available to U.S. customers via subsidiary
Booking.com
• Airbnb offers Cuba home-rental facilities
• United Continental Airlines, Southwest, JetBlue, Spirit Airlines, Alaska Air Group
and Silver Airways wanting to have commercial flights to Cuba
• Feb. 2016: Cuba Cleber LLC was notified that it could open a facility in Cuba to build
tractors
• March 2016: Starwood Hotels and Resorts signed three hotel deals in Cuba
U.S. private sector first steps
18. Why to go to
Cuba NOW?
In the future it is
expected:
1. American
tourists to travel
to Cuba
2. American
companies to
open business in
Cuba
19. Cuba and the rest of the
Caribbean
A threat or a partner?
To compete or to cooperate?
21. A threat?
• The rise of tourist arrivals to Cuba at the expense of other Caribbean
destinations was one of the forecast negative effects, together with
concerns regarding U.S. investments, trade and aid funds deviating to
Cuba.
• According to a survey of Travel Leaders Group of 2015, the number of
Americans interested in travel to Cuba if all U.S. Government restrictions
were lifted is on the rise, with 15% saying they’d go as soon as they could,
compared with 11% in 2014.
• According a IMF study of 2008, Cuba is bracing for as many as 10 million
American tourists per year.
• Cuban officials estimate that 1.5 million Americans would travel to Cuba
annually.
22. Not really…
• According the World Tourism Organization, the Caribbean ended 2015
with a 7.4 percent growth compared to 2014, receiving 24 million tourists.
• Cuba’s main assets as tourist attraction for Americans cannot be provided
by any other destination: old American cars, ‘socialist’ experience (history,
society)
• Caribbean sun and beach destinations (Bahamas, Barbados, Punta Cana)
are well positioned in U.S. markets and Cuba’s resorts cannot compete
with them, still.
To come to Cuba FIRST is the strategy followed by other regions to benefit
from the growing interest and business opportunities in Cuba and get
there before the U.S. Why not the Caribbean?
23. Opportunities for the Caribbean
1. More tourists expected to visit the Caribbean (Cuba
joined the CTO in 1992).
2. Development of multi-destination tourism (cruises).
3. Development of diverse Caribbean tourist attractions:
health tourism, city tourism, cultural tourism
4. Cuba as market for Caribbean products and services.
5. Cuba as hub in the Caribbean (Mariel port’s facilities).
24. Tourism as main interest focus. FITCuba. May 2016
• 36th International Tourism Fair in Havana, Cuba.
• More than 2,000 delegates from 53 countries.
• The fair was dedicated to Havana as a destination.
• The fair was dedicated to Canada as the guest country (Canada is the main source of
tourists to Cuba with 1.3 million in 2015).
• The fair was dedicated to Culture as tourism product.
• Cuba currently has 62,090 rooms in 360 hotels (68 percent four and five-star hotels)
plus other 18,742 in the private sector, a total of 80,832 rooms nationwide.
• In Havana, there are 11,309 rooms in hotels, plus 4,700 in the private sector.
• About 13,688 new rooms will be built for 2016, especially for sun and sea.
• The Cuban government has approved 26 joint ventures, 69 management contracts and
18 international chains.
• Cuban hotel development plans to reach, by 2030, a total of 134,300 rooms out of a
potential 273,500 (the maximum possible for the Cuban hotel industry).
25. Caribbean advantages to benefit from the new
hemispheric dynamics after 17D
• Cuba’s foreign policy key principles remain the same: International
activism, critic to interventionism and supporter of preventive action lead
by multilateral organizations (UNESCO, FAO, UNDP, WHO, Human Rights
Council), solidarity as main philosophy and cooperation as
implementation mechanism in the search for an international insertion
qualitatively different.
• Long established and strong diplomatic relations (1972).
• Long established cooperation programs: education, health sector, sports.
• 2000 Trade and Economic Cooperation Agreement between CARICOM
and Cuba revised in 2014.
26. • 1991: A CARICOM Commission visited Havana
• 1993: Establishment of the CARICOM-Cuba Joint Commission
• 1994: Cuba joins the Association of Caribbean States (ACS)
• 2000: Trade and Economic Co-operation Agreement between Cuba and CARICOM.
(Two Protocols)
• 2002: First Summit Cuba-CARICOM
• 2005: Second Summit Cuba-CARICOM
• 2008: Third Summit Cuba-CARICOM
• 2009: OAS approves the possibility of Cuba’s return
• 2011: Fourth Summit Cuba-CARICOM
• 2014: Fifth Summit Cuba-CARICOM
• Since 1992: general condemnation to the USA blockade against Cuba
Cuba and CARICOM relations
27. Cuba in the Caribbean: recent developments
• Operation ‘Milagro’ had operated more than 118 000 Caribbean
patients up to October 2014
• Medical Brigades are present in 12 Caribbean countries
• Technical assistance in key areas such as Disaster Risk Reduction
and in the Caribbean Sea protection and preservation
• Cuba was elected Chair of the Association of Caribbean States
(ACS) Ministerial Council for the period 2016
• ACS VII Summit of Heads of State and/or Government to be held
in June 2016 in Cuba
28. CARICOM challenges to benefit from the new
hemispheric dynamics after 17D
• Inertia on the Caribbean private sector on not developing economic and trade
relations with Cuba.
• Difficulties to do business in Cuba: central-planned model, state-owned
enterprises, bureaucracy, legal and institutional differences
• Because U.S. changes on how to engage with Cuba are so new and untested,
Caribbean companies should approach new Cuban business opportunities with
care and caution.
• Cuba is looking for large investments and join business in sector that bring
technology, build infrastructure and create jobs.
• Similar economic production and export orientation.
• High cost of air and sea transportation within the region.
• Insufficient finance and credit mechanisms to foster trade and investments.
29. Some recommendations for CARICOM Caribbean
1. Change the narrative: Cuba more an opportunity than a threat
April, 2016: When addressing the newly appointed directors of the boards of key agencies of the
tourism ministry on the weekend at the Montego Bay Convention Centre in St James, Jamaica's
tourism minister Mr. Edmund Bartlett noted that Cuba is strategically positioned to help in the
growth of tourism in the Caribbean and that it will be beneficial for Jamaica (Cuba may enable
the Caribbean to secure better airlift arrangements with airlines and facilitate multi-destination
marketing in the region)
2. To re-evaluate the existing mechanisms that put CARICOM member states in an
advantageous position to conduct business in Cuba.
3. To encourage new partnerships with Cuba, specially in areas of interest for the U.S. and
Caribbean business communities (tourism, health).
4. To carefully follow the ‘normalization’ process for correctly assessing new business
opportunities in Cuba.
5. To carefully follow the updating of the Cuban economic model to understand the changes
within Cuba.
30. VII Congress of the Cuban Communist Party, April 2016
Main subjects of
discussion
The Cuban
Economic Model:
conceptualization,
implementation
Economic and
Social
Development Plan
2030
31. For the rest of 2016: the process continues
• President Obama’s should not announce too many new measures even if there
is still some room of maneuver to act (not many new changes expected).
• Keep on advancing and developing the bilateral negotiations and business
opportunities already initiated and opened.
• Window of opportunity for third actors on exploring how to establish or
expanding their presence in Cuba will remain opened.
• The Cuba-U.S. normalization process is not expected to act as a major influence
in Cuba’s foreign policy and cooperation orientation towards the rest of the
Caribbean and Latin America.
• Cuba will advance in its domestic reform in order to improve its economic
performance, infrastructure, legal framework and institutions facing the future
increasing of economic relations with the U.S. and other foreign partners.
October 12th: Obama Should End the Embargo on Cuba
October 20th: Cuba’s Impressive Role on Ebola
October 26th: The Shifting Politics of Cuba Policy
Nov 3rd: A Prisoner Swap With Cuba
Nov 10th: In Cuba, Misadventures in Regime Change
Nov 17th: A Cuban Brain Drain, Courtesy of the U.S.
Dec 15th: Cuba’s Economy at a Crossroads
Dec 18th: Mr. Obama’s Historic Move on Cuba
On January 15th, 2015, the Treasury and Commerce Department announced new regulations.
U.S. companies are now authorized to export goods “intended to empower the nascent private sector by supporting private economic activity.”
A general license that authorizes companies to establish mechanisms to provide commercial telecommunications services in Cuba or linking third countries and Cuba was approved.
Unlimited remittances sent to Cuban citizens for humanitarian projects and/or the development of private businesses are now also permitted.
No more limits on how much money Americans spend in Cuba.
Permissible use of U.S. credit and debit cards.
A limit on remittance payments to family members in Cuba will be raised to $8,000 per year, from $2,000 per year.
Travel agents and airlines can fly to Cuba without a special license.
Financial institutions may open accounts at Cuban banks to facilitate authorized transactions.
Two rounds of negotiation (Havana, January and Washington, February, 2015)
Immigration issues
Cultural and academic exchanges
Environmental and ecological damages
Natural disasters
Mail and Internet communications
Collaboration in drug interdiction
Air safety
Remittances, packages and other benefits
Exchange “people to people”
Humanitarian aid, solidarity and remittances
Social projects
Consular Affairs
On January 15th, 2015, the Treasury and Commerce Department announced new regulations.
U.S. companies are now authorized to export goods “intended to empower the nascent private sector by supporting private economic activity.”
A general license that authorizes companies to establish mechanisms to provide commercial telecommunications services in Cuba or linking third countries and Cuba was approved.
Unlimited remittances sent to Cuban citizens for humanitarian projects and/or the development of private businesses are now also permitted.
No more limits on how much money Americans spend in Cuba.
Permissible use of U.S. credit and debit cards.
A limit on remittance payments to family members in Cuba will be raised to $8,000 per year, from $2,000 per year.
Travel agents and airlines can fly to Cuba without a special license.
Financial institutions may open accounts at Cuban banks to facilitate authorized transactions.
Two rounds of negotiation (Havana, January and Washington, February, 2015)
Immigration issues
Cultural and academic exchanges
Environmental and ecological damages
Natural disasters
Mail and Internet communications
Collaboration in drug interdiction
Air safety
Remittances, packages and other benefits
Exchange “people to people”
Humanitarian aid, solidarity and remittances
Social projects
Consular Affairs
Around 6,000 American companies, including Coca-Cola and Colgate-Palmolive, have filed claims for property reportedly worth a total of $1.9 billion when seized by the communist government after the country's 1959 revolution. Cuba is also trying to recover financial damages caused by the embargo.
According to U.S. Secretary of Commerce Penny Pritzker: In 2015 the Department of Commerce issued 490 authorizations worth $4.3 billion to do business in Cuba. In 2016, the Department had already issued 28 authorizations worth $300 million. Commerce and Treasury approval is needed to do business on the island.
1990, XI CARICOM Summit, Kingston, Jamaica: Agreed to send a commission in Havana to discuss future negotiations and bilateral cooperation projects, and to reestablish the Cuba-CARICOM commission
AEC: Acuerdos Marcos de cooperación, tanto en la actividad Turística como en Transporte Aéreo y en Desastres Naturales
): opportunity for Cuba to develop relations of functional and technical cooperation with its regional neighbours within a multilateral framework free from ideological and political considerations.
2008: Third Summit Cuba-CARICOM
New eyes-surgery centers in Jamaica, Saint Lucia and Guyana
New Integral Diagnosis Centers in Haiti and Saint Vincent and the Grenadines
480 scholarships, 150 for medicine
To continue the energy saving and the natural disasters effects prevention and mitigation programs
To assist in the use of renewable energy
Major shift: to move the program delivery to the recipient countries, except the training program
Votación bloqueo 2013
(October 29, 2013 188 member states in favor, two against (the United States and Israel), and three abstaining (Marshall Islands, the Federated States of Micronesia, and Palau)