CUBA CENTRAL NEWS BRIEF: Cuban entrepreneurs go to Washington

Yesterday marked the second anniversary of the U.S. and Cuba restoring diplomatic relations. Though the weather in D.C. closely resembled that of July 20, 2015—those who were present that day at the Cuban Embassy’s flag-raising ceremony will vividly recall the sweltering heat—we find ourselves in a very different policy environment.

On June 16, President Trump announced he would unravel significant pieces of the previous administration’s Cuba policy, including the March 2016 provision allowing Americans to travel to Cuba as individuals. He stated that his impending policy changes will “support the Cuban people.”

This week, together with partner organizations Engage Cuba and Cuba Educational Travel, CDA brought a delegation of eight Cuban entrepreneurs to Washington. The delegation shared their views on President Trump’s plans to further limit travel to and trade with Cuba, and they shared how the U.S. can support them, their families, and their businesses.

The entrepreneurs brought an urgent message. As Yamina Vicente, owner of the party planning and decorations business Decorazón put it this week to a roomful of Members of Congress, “If you want to help us, don’t roll back the advances in U.S.-Cuba engagement.”

This week, Yamina, and seven other Cuban entrepreneurs from sectors ranging from hospitality to media, delivered their message to the Departments of State, Treasury, and Commerce. You can read the entrepreneurs’ letter here.

The group also met with Members of Congress from both sides of the aisle. On Tuesday, they held a press conference with Senators Patrick Leahy, Jeff Flake, and Amy Klobuchar, publicly releasing their recommendations for how U.S. policy could truly support them. You can read their full policy recommendations here.

Celia Mendoza, owner of Concierge Habana, which plans VIP tours of the island and works with private restaurants, taxi services, and bed and breakfasts, explained the stakes of President Trump’s plans to prohibit individual travel. Since President Trump’s policy announcement a month ago, “I have received nine cancellations.” U.S. travelers, she said, have started canceling trips out of fear that their travel may no longer be legal, though the regulations to implement the policy have not yet been released. Celia’s business, like many others, depends almost entirely on U.S. clientele, and she made plans based on the expectation that engagement would continue.

Entrepreneurs like her who built their businesses from the ground up “have overcome a lot of obstacles,” she said. “But this is one obstacle that I don’t see that we are going to be able to overcome.”

Julia de la Rosa, who runs the bed and breakfast La Rosa de Ortega, employs 17 people and hosts a clientele that’s about 75 percent U.S. visitors. Over the last two-and-a-half years, she said, restored diplomatic relations between the U.S. and Cuba and engagement with increasing numbers of U.S. travelers had brought her and many other entrepreneurs not only business success but “more confidence in the market.” But Julia is worried that this will all fall away.

Yamina, who left her post as a professor of economics at the University of Havana in 2013 to found her business, said that while her clientele is mostly Cubans who live on the island, “my business, like so many others, depends on the success of the businesses whose clientele is U.S. visitors—depends on them and their employees being successful so that my business can be successful. Whatever affects those businesses affects businesses like mine, too.”

Julio Álvarez, co-owner of the classic car repair shop and chauffeur service NostalgiCar, asked the following of the policymakers and reporters he spoke with: “If you really want to help us, please encourage people to travel to Cuba—we need their support.” At the end of the delegation, Julio told us, “It means a lot to us to be able to help keep the doors open between the U.S. and Cuba, to be able to help our businesses as well as our communities.”

It means a lot to us, too. As President Trump puts the details on his new policy toward Cuba, we hope that he takes the voices of these entrepreneurs into account.

You can check out some of the press coverage of the entrepreneurs’ visit in the Miami Herald and OnCuba Magazine (in Spanish), and take a look at our Facebook and Twitter accounts for the updates we posted throughout the week.

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This week, in Cuba news…

U.S.-Cuba Relations

President Castro criticizes U.S. policy shift

Speaking before Cuba’s National Assembly, President Raúl Castro for the first time individually criticized President Donald Trump’s June 16 announcement that he would limit trade with and travel to Cuba, while also reiterating his desire to continue bilateral engagement, Reuters reports.

Stating that “any strategy that tries to destroy the Revolution … will fail,” President Castro said President Trump’s planned policy changes are marked by “old and hostile rhetoric, belonging to the Cold War.” (State outlet CubaDebate published a transcript of his remarks.) President Castro said President Trump “has not been well informed about the history of Cuba and its relations with the U.S.,” and that the policy shift ignores majority support for engagement among the U.S. public, including Cuban Americans, in order to “satisfy the interests of a group of Cuban origin in South Florida, increasingly isolated and a minority.”

Nevertheless, President Castro stated that Cuba still hopes to continue to negotiate bilateral affairs with the U.S. in a context of “respect for the sovereignty and the independence of our country.” His words echo a statement released by Cuba’s government following President Trump’s announcement, which decried the policy shift as “condemned to failure,” but reiterated Cuba’s “willingness to continue the respectful dialogue and cooperation in areas of mutual interest.”

President Trump to extend suspension of Helms-Burton property claims clause

According to a State Department press release, President Trump will implement the customary measure of waiving for six months Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (known as Helms-Burton), a provision that, if allowed to enter into effect, would permit U.S. nationals whose property was confiscated by Cuba’s government between 1959 and 1967 to sue companies trafficking in that property today.

Every president has routinely suspended Title III at six-month intervals since Helms-Burton was enacted in 1996. Allowing Title III to go into effect would spark controversy with European and North American allies, who have openly criticized the clause, and swamp U.S. courts with cases involving the nearly 6,000 claims, currently valued at $1.9 billion, that have been certified by the Justice Department’s Foreign Claims Settlement Commission. (The Brookings Institution estimates that after accounting for inflation, the value of claims could rise to $8 billion.)

Since the U.S. and Cuba formally reestablished relations in July 2015, diplomats have held three talks regarding claims on confiscated property in Cuba, the most recent of which occurred in January. For its part, Cuba claims the U.S. owes $121 billion for material damages and $181 billion for human damages caused by the embargo.

State Department drops Cuba from Country Reports on Terrorism

The State Department’s 2016 Country Reports on Terrorism, released this week, makes no mention of Cuba, the first such omission since Cuba was designated as a state sponsor of terrorism in 1982, McClatchy reports. Cuba was removed from the list of state sponsors of terrorism in May 2015; two months later, the U.S. and Cuba officially restored diplomatic relations.

In his confirmation hearing, Secretary of State Rex Tillerson stated he would “examine carefully the criteria under which Cuba was delisted” as a state sponsor of terrorism. This week, Justin Siberell, acting coordinator for counterterrorism at the State Department, told reporters, “It was assessed that there was not sufficient information there to provide a report this year on Cuba.” The 2015 report, which was released in June 2016, included several paragraphs on the country’s framework for combatting terrorism.

The rationale behind Cuba’s past designation as a state sponsor of terrorism is clouded. According to the State Department, the classification stemmed from the country’s “efforts to promote armed revolution by forces in Latin America,” but former White House officials tell a different story; Richard Clark, a counter-terrorism adviser to the Reagan, Bush, Clinton, and George W. Bush administrations, has stated that Cuba remained on the list “not because they were sponsoring terrorism … it was because of U.S. domestic political reasons.”

Editor’s note: Per President Trump’s National Security Memorandum on Cuba policy, relevant agencies began the process of drafting new regulations on July 16. You can find the Cuba Central Team’s comprehensive overview of what we do and don’t know about the President’s Cuba policy at this link.

In Cuba

Cuba’s economy marks slight first-semester growth; economic concerns continue

Cuba’s GDP grew 1.1 percent in the first six months of this year, Ricardo Cabrisas, Cuba’s minister of economy and planning, stated at a National Assembly meeting last Friday, the Associated Press reports; however, the country’s cash supply is lower than expected, according to Reuters. Mr. Cabrisas did not say whether Cuba’s economy is still on pace for the 2 percent growth in 2017 that he forecast at a Council of Ministers meeting two weeks ago.

According to Granma, Mr. Cabrisas attributed the GDP increase to growth in sectors including tourism, construction, and non-sugar agriculture.

Even so, Mr. Cabrisas told the Assembly, Cuba’s economy continues to struggle; first-semester export revenues were more than $400 million lower than expected, and the country will import $1.5 billion less than anticipated this year due to difficulties finding sellers willing to allow Cuba to finance purchases on credit, Reuters reports. According to CubaDebate, Mr. Cabrisas stated that the decline in imports stems from wariness among sellers about Cuba’s unpaid debts.

Last year, Cuba’s economy shrank by 0.9 percent, due in large part to a reduction in subsidized oil shipments from Venezuela, a chronic lack of hard currency, and foreign debt repayments amounting to $5 billion.

Cuba depends on imports for much of its technology and food needs, and low cash reserves on the island mean that it must purchase most imports on credit. The United States, for its part, does not allow agricultural or medical exports to Cuba on credit under the Trade Sanction Reform and Export Enhancement Act of 2000. In January, Representative Rick Crawford (AR-1) introduced the Cuba Agricultural Exports Act, a bill to allow agricultural exports to Cuba to be financed on credit; the bill has earned 51 cosponsors thus far.

UN human rights expert concludes Cuba visit

Virginia Dandan, an independent expert on human rights for the United Nations Human Rights Council, stated at a press conference July 14 that Cuba has a long history of supporting “countries that are working to overcome underdevelopment,” as she concluded her 5-day visit to evaluate the country’s approach to human rights issues and “how it is working for international solidarity,” according to a UN statement. Ms. Dandan praised Cuba’s domestic and international education, healthcare, and disaster relief programs, but declined to comment on criticisms of human rights on the island, telling reporters that “these questions are not within the parameters” of her visit, EFE reports.

During her trip, Ms. Dandan met with members of Cuba’s Ministry of Foreign Affairs, Ministry of Education, Ministry of Public Health, and Ministry of Foreign Trade and Investment, among others, as well as members of Cuban civil society and foreign students at the Havana-based Latin American School of Medicine. Ms. Dandan will present her full findings and recommendations to the Human Rights Council in June 2018.

Cuba’s Foreign Relations

President of Colombia visits Havana on business delegation

Colombia’s President Juan Manuel Santos traveled to Cuba on July 17 on a two-day trade mission to promote bilateral commercial engagement and discuss growing opportunities in the tourism industry, AFP reports. The trip was President Santos’ first to the island since signing a peace agreement with the Revolutionary Armed Forces of Colombia in June 2016.

President Santos was accompanied by representatives from the Colombian government’s commerce and tourism agencies, Granma reports. The delegation attended a forum on strategies to increase business opportunities in agriculture, construction and energy. In 2016, Cuba and Colombia each received record numbers of foreign visitors, and Colombia’s exports to Cuba in 2016 were valued at $33.5 million, according to statistics provided to reporters by the Colombian delegation.

Prior to the visit, a report in the Financial Times had stated that President Santos would encourage his Cuban counterpart to join a diplomatic initiative to end the crisis in Venezuela; however, Colombia’s Minister of Foreign Affairs María Ángela Holguín told reporters that while “the situation in Venezuela will be part of the conversation with President Castro,” the purpose of the trip was to build commercial ties and to thank Cuba’s President for his role in the peace process, CNN reported.

Bolivia’s President Evo Morales also made a brief stop in Cuba on Thursday, meeting with Rogelio Sierra, Cuba’s vice minister of foreign affairs, to discuss bilateral issues before heading to a summit in Argentina of presidents of the South American trade bloc Mercosur, CubaDebate and Telesur report. On Wednesday, President Morales posted on Twitter a letter to his Cuban counterpart denouncing President Trump’s Cuba policy changes.

What We’re Reading

As Trump writes new Cuba rules, anti-embargo politicians present a compromise, Alex Daugherty, Miami Herald

The Miami Herald’s Alex Daugherty notes that the Trump administration and supporters of engagement with Cuba have an opportunity to work together by way of their shared interest in supporting Cuba’s private sector. Daugherty reports on the delegation of Cuban entrepreneurs who, in collaboration with pro-engagement groups including the Center for Democracy in the Americas, Engage Cuba, and Cuba Educational Travel, visited Washington this week to deliver a series of policy recommendations on how the administration can best support them.

U.S.-Cuba diplomatic ties: What a difference two years and a new president makes, Mimi Whitefield, Miami Herald

On the two-year anniversary of the U.S. and Cuba opening embassies in each other’s capitals, the Miami Herald’s Mimi Whitefield remarks on how much the context surrounding U.S.-Cuba relations has changed since July 20, 2015.

In Cuba, Trump’s policy proving hard to follow, Melanie Zanona, The Hill

The Hill’s Melanie Zanona discusses the confusion over ambiguities in President Trump’s Cuba policy, including the difficulties it creates for Cuba’s private sector and questions about how the policy will separate Cuban military-owned enterprises from other government businesses.

Cuba’s FDI renaissance at risk from Trump reversal, Natasha Turak, Financial Times

Natasha Turak writes in the Financial Times that entrepreneurs in Cuba, having benefited from increased foreign investment and spending in Cuba over the last two-and-a-half years, will suffer under President Trump’s policy changes.

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