Obama Announces New Policies Regarding Trade, Commerce with Cuba

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By Cheryl Bolenand Stephanie Cohen

Dec. 17 — President Barack Obama Dec. 17 announced new policies with respect to Cuba intended to facilitate trade and commerce between the two countries, with the ultimate goal of lifting the decades-old embargo.

Among other changes, Obama said that the administration is taking steps to increase travel, commerce and the flow of information to and from Cuba.

“With the changes I'm announcing today, it will be easier for Americans to travel to Cuba, and Americans will be able to use American credit and debit cards on the island,” he said in remarks at the White House.

To get more resources to the Cuban people, the administration is significantly increasing the amount of money that can be sent to Cuba and removing limits on remittances that support humanitarian projects, the Cuban people and the emerging Cuban private sector, Obama said.

Transactions Authorized

“I believe that American businesses should not be put at a disadvantage and that increased commerce is good for Americans and for Cubans, so we will facilitate authorized transactions between the U.S. and Cuba,” the president said.

U.S. financial institutions will be able to open accounts at Cuban financial institutions, and it will be easier for U.S. exporters to sell goods in Cuba, Obama said.

In addition, the president said that he has authorized increased telecommunications connections between the U.S. and Cuba. “Businesses will be able to sell goods that enable Cubans to communicate with the U.S. and other countries,” he said.

Obama said that these were the steps he could take as president to change the policies toward Cuba, since the embargo that has been imposed for decades is now codified in legislation.

“As these changes unfold, I look forward to engaging Congress in an honest and serious debate about lifting the embargo,” the president said.

Commercial Diplomacy

Commerce Secretary Penny Pritzker in a Dec. 17 statement said that the president's actions will chart a new course for the U.S. relationship with Cuba and its people.

“It will improve the lives of millions and will help spur long overdue economic and political reform across the country,” Pritzker said. “Expanding economic engagement between the Cuban people and the American business community will be a powerful catalyst that will strengthen human rights and the rule of law.”

Since Obama’s first days in office, his administration has taken steps to ease restrictions on family travel and remittances, Pritzker said. Nevertheless, 54-year-old policies have isolated Cuba from the U.S. and have failed to foster a more prosperous, free and democratic nation, she said.

“President Obama and I believe deeply in the power of commercial diplomacy to change lives and economies for the better,” Pritzker said. “We are putting this belief to the test in Cuba.”

Pritzker, who will lead the U.S. efforts to expand commercial diplomacy as part of the president’s initiative, said she looked forward to visiting Cuba.

Kerry Says New Policy Based on ‘Conviction.’

Secretary of State John Kerry Dec. 17 issued a statement saying that after five and a half decades of “virtually frozen” U.S.-Cuba policy that has “done little to promote a prosperous, democratic and stable Cuba,” Obama has committed the U.S. to a “more ambitious course forward.”

“Today’s step also reflects our firm belief that the risk and the cost of trying to turn the tide is far lower than the risk and cost of remaining stuck in an ideological cement of our own making,” Kerry said in his statement.

The secretary said that the new approach is “based not on a leap of faith but on a conviction that it's the best way to help bring freedom and opportunity to the Cuban people, and to promote America's national security interests in the Americas, including greater regional stability and economic opportunities for American businesses.”

Assistant Secretary for Western Hemisphere Affairs Roberta Jacobson will travel to Cuba in January to lead the U.S. delegation to the next round of U.S.-Cuba Migration Talks, Kerry announced.

Also, at Obama’s request, Kerry said that he had asked his team to initiate a review of Cuba’s designation as a State Sponsor of Terrorism.

“Going forward, a critical focus of our increased engagement will continue to be on improving the Cuban Government’s respect for human rights and advocating for democratic reforms within Cuba,” Kerry said.

Relaxing Import, Export Bans

The Cuban embargo was enacted under The Cuban Assets Control Regulations, 15 C.F.R. Part 515, which were issued by the U.S. government in July 1963 under the Trading With the Enemy Act in response to hostile actions by the Cuban government. The regulations are administered by the Treasury Department's Office of Foreign Assets Control.

Under current policy, no products, technology or services may be exported from the U.S. to Cuba, either directly or through third countries such as Canada or Mexico, with some limited exceptions for publications, medicine and donated food, according to a summary of the embargo published by the Treasury Department. Additionally, no vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has any interest may enter a U.S. port.

Cuban goods or services also are banned from being imported into the U.S., either directly or through third countries such as Canada or Mexico, according to Treasury.

Cuba, with a population of more than 11 million, had imports of $13.8 billion in 2013 and imports of services of $2.4 billion in 2013, according to the Federation of International Trade Associations, based on World Trade Organization data.

Extent of Authority

White House press secretary Josh Earnest said that the president took steps Dec. 17 to ease restrictions on exports but that some remain in place.

“And there are substantial steps that the president can take using his executive authority to relax some of the restrictions that were in place in a way that would facilitate greater trade and greater economic activity between the U.S. and Cuba,” Earnest said.

Still, the president has used all of the executive authority that he has, Earnest said. The president believes that the Congress should take the necessary action to remove remaining restrictions, he said.

White House Fact Sheet

The White House issued a fact sheet that outlines the actions taken by the president.

The fact sheet said that the president had authorized expanded commercial sales and exports from the U.S. of certain goods and services.

Items that will be authorized for export include certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs and agricultural equipment for small farmers, it said.

In addition, the president authorized American citizens to import additional goods from Cuba, the fact sheet said. Licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined, it said.

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

The White House fact sheet can be found at http://www.whitehouse.gov/the-press-office/2014/12/17/fact-sheet-charting-new-course-cuba.