Thursday, April 16, 2009

Obama should reverse policy on US trade embargoes

Business Times - 17 Apr 2009

Obama should reverse policy on US trade embargoes


ONE of the most dramatic changes in US foreign policy embraced by President Barack Obama has been his decision - announced this week on the eve of a summit with the leaders of South and Central America - to ease the US relationship with Cuba by lifting travel and spending restrictions on Americans with family on the island.

The move amounts to an admission on the part of Washington that the policy of isolating the communist regime first imposed by the administration of former president John F Kennedy has failed. Moreover, as the United States takes the first steps towards normalising relations with Cuba, American officials and lawmakers should consider one of the main lessons of a half-century of failed policy towards Havana: trade embargoes only tend to help strengthen the power of the targets of these embargoes (the ruling authoritarian regime), while slowing - not accelerating - a process of economic and political freedom.

While the new White House occupant has left in place some of the main elements of the trade embargo imposed on Cuba in 1962, his move does overturn all restrictions barring US citizens from visiting their Cuban relatives and has lifted limits on the amount of money Cuban Americans can send back to their families on the island. And it also removes all US regulations that had prevented American companies from exporting high-tech services and information to Cuba.

The expectation in Washington and in Miami, the capital of the Cuban-American community, is that the new rules will lead to an upsurge in commercial flights to the island and make it possible for Cubans to have greater access to outside information through the use of American communication technology.

These developments are going to benefit Cubans who are interested in expanding economic and cultural ties with the US and in integrating their country into the global economy, creating an environment more conducive for economic and political liberalisation that could eventually weaken the power of one of the few remaining communist governments in the world.

In fact, the real dividing line in US policy towards Cuba has always been on how best to undermine the regime of Fidel Castro. For 50 years, different US administrations have been trying to achieve that goal by barring Americans from trading with, or travelling to, Cuba. The embargo's national security rationale collapsed in 1991 together with the Soviet Union which was Mr Castro's main outside backer. After losing billions in economic aid from its former patron, Cuba has become a poor nation; it poses no threat to American security.

But facing pressure from the anti-Castro lobby in Miami, Washington has continued its economic war against Cuba. In fact, ex-president George W Bush tightened the economic screws even further by limiting travel by Cuban Americans and remittances from them. This policy has been supported by the members of the older generation of Cuban Americans (who voted for the Republican presidential candidate last year), while younger Cuban Americans (who voted for Mr Obama) have backed lifting many of the US restrictions on trade with, and travel to, Cuba.

Those Americans who continue to back the embargo insist that it should stay in place until the communist regime collapses. But the trade and travel restrictions have helped Mr Castro to maintain his power by shifting the blame for the island's economic problems to America. Moreover, none of America's economic partners has joined the embargo, with European, Canadian and South American businessmen and tourists filling the void resulting from US actions.

In short, the American policy towards Cuba has proved to be a disaster on all fronts - hurting the Cuban people while failing to advance American interests.

The policy of economic sanctions has also been a failure when applied to other targets of such US policies, like North Korea, Myanmar, Iran and Iraq (under Saddam Hussein). It ended up hurting the people - and not the governments - of those countries, by depriving them of access to US trade and investment and, by extension, to American technology and culture.

The only beneficiaries of this US policy have been the targeted regimes and America's global economic competitors.

While trade and investment may not bring about instant political and economic reform, and will certainly not remove all sources of conflict between nations, the use of economic sanctions by successive American administrations against Cuba and other 'rogue regimes' seems to have made things only worse.

The decision by the Obama administration to start reversing this failed policy vis-Ã -vis Cuba is a good idea that should now be applied to the other targets of US economic punishment.

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