New Cuba Flights May Intensify Lobbying to Dissolve Tourism Ban

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By Stephanie Beasley

Aug. 29 — U.S. companies lobbying Congress to normalize relations with Cuba say the restoration of daily, scheduled flights Aug. 31 could bring a swift end to the travel ban and eventually another look at lifting the trade embargo, according to a top official at the U.S. Chamber of Commerce.

“The more that people are able to get on those flights and see the changes in Cuba, they'll see how antiquated the ban is,” Jodi Bond, vice president of the Americas division at the U.S. Chamber of Commerce, told Bloomberg BNA.

Altogether 10 U.S. airlines—including Delta Air Lines Inc., American Airlines and Southwest Airlines Co.—will begin offering flights to Cuba this fall.

From April to June this year, the Chamber spent more than $22 million on a slew of bills that included the Freedom to Travel to Cuba Act (H.R. 664/S. 299) (30 DER A-42, 2/13/15) (25 DER A-38, 2/6/15). Airlines for America, which represents all of the major air carriers with the exception of Delta, spent about $1.9 million total during the second quarter of this year lobbying Congress on air service to Cuba.

Status of Ban

The Obama administration has taken several steps over the past year to normalize relations with its former Cold War adversary. Over the summer, the Department of Transportation approved scheduled flights between the U.S. and 10 Cuban airports, including Jose Marti International Airport in Havana (See previous story, 07/08/16). JetBlue Airways Corp. plans to begin operating nonstop flights between Fort Lauderdale, Fla., and Santa Clara, Cuba, on Aug. 31. And American Airlines Group Inc. and Silver Airways Corp. are slated to begin flights in early September.

However, U.S. citizens are still banned from traveling to the island as tourists. Instead they must be authorized under at least one of 12 categories, such as family visits, journalism activity, educational activities and humanitarian projects. The restoration of scheduled flights between the U.S. and Cuba could add to pressure on Congress to lift those travel restrictions, Bond said.

Increased Lobbying on Cuba

The Chamber increased its lobbying around legislation that would lift the U.S.-Cuba travel ban and trade embargo in 2014—the year that President Barack Obama announced plans to take a series of steps that would ease restrictions on trade and diplomatic relations. The organization spent more than $21 million total during the fourth quarter of 2014 on a list of trade-related lobbying activities, including the embargo on Cuba, according to the Center for Responsive Politics, which tracks lobbying data. The Chamber has consistently listed legislation that would lift the embargo and travel ban in subsequent filings over the past two years.

Perhaps not surprisingly, the airline industry also intensified its Cuba-related lobbying efforts before the DOT awarded scheduled flight slots to Cuban airports (See previous story, 02/16/16) (See previous story, 02/16/16). For example, American Airlines spent about $2.3 million total between April and June on a series of lobbying activities that included gaining support for its route applications in Cuba, according to reports collected by the Center for Responsive Politics. That is a big change for the company who did not report lobbying on Cuba-related issues for the same quarter in the previous year. In fact, Cuba was not mentioned in any of the air carriers' lobbying reports for the entirety of 2015.

The efforts paid off. DOT authorized American Airlines to operate flights between Miami, Charlotte, N.C., and Cuban cities including Havana. JetBlue Airways, which scored a Havana slot, spent about $610,000 lobbying lawmakers on its Cuba route applications during the second quarter of this year. It also did not list Cuba-related policy within its lobbying activities for the previous year.

Possible Legislative Action This Year

Bond said she expects to see a greater uptick in lobbying this year by companies not only in the travel and tourism industries but also companies in ancillary industries like infrastructure and equipment manufacturing that are hoping to get in on the ground level of efforts to build up Cuba's ports, hotels, roads and other infrastructure, as the island prepares for an influx of American visitors.

Heavy equipment manufacturers such as Caterpillar Inc. are already lobbying to lift the embargo. The company spent more than $1 million from April to June lobbying lawmakers to lift the travel and trade bans. Engage Cuba, a coalition of businesses that includes Starwood Hotels & Resorts Worldwide Inc. and the National Association of Manufacturers, spent about $70,000 lobbying on Cuba-related legislation during that same period.

The heightened level of lobbying could result in legislative efforts to lift the U.S.-Cuba travel ban this year and perhaps re-examine the trade embargo in 2017 under a new president and new Congress, Bond said.

Sen. Jeff Flake (R-Ariz.), a sponsor of the Freedom to Travel to Cuba Act, told Bloomberg BNA that there were enough senators who favored the bill to pass it out of the chamber. He is working to get House members “on board.”

As to what might happen next year, Flake noted that Democratic presidential nominee Hillary Clinton had been supportive of the executive actions President Obama had taken to ease relations with Cuba.

“There are steps that the president can take and Obama has taken most of those steps,” he said. “Nobody is going to roll back what he's done.”

Advocacy Versus Lobbying

There is certainly increased advocacy for normalizing relations with Cuba, but it might not translate to more lobbying or legislative changes, said U.S.-Cuba Trade and Economic Council President John Kavulich. He said many U.S. companies are belatedly recognizing how difficult it is to break into the Cuban market not just because of the embargo but also because of Cuban restrictions on foreign businesses.

Further, he said it was a pipe dream to believe that Congress would take any steps to make it any easier for companies to do business there in the near future.

“Whomever is spouting that narrative is both delusional and on crack,” he said.

President Obama may make additional regulatory changes related to Cuba before he leaves office, but it is highly unlikely that either Senate Majority Leader Mitch McConnell (R-Ky.) or House Speaker Paul Ryan (R-Wis.) will want to touch the issue of lifting the travel ban on Cuba before the end of this year, Kavulich said. And the next administration was likely to have a new list of priorities, he said.

“For President Obama, the status of Cuba is one that he wants to use for the purpose of his legacy,” he said. “Whomever comes after Barack Obama is going to come into the White House with a long list of domestic and international interests and Cuba is not going to be one of them and it shouldn't be.”

Cuban Concessions Possible Post-Castro

Kavulich said he agrees with those who say the Obama administration made more concessions to the Cuban government than it got in return. If you made a list quantifying what the U.S. gave and what the Cubans gave, the Cuban side is “damn near blank,” he said.

Additional changes in U.S.-Cuba relations will likely require more cooperation from the Cuban government, Kavulich said. That's more likely to happen after Cuban President Raul Castro retires, which he is expected to do in 2018, he added.

Sen. Flake said that one of the steps Cuba will need to take to facilitate normalized trade relations would be to change current labor laws that require foreign companies to hire Cuban government employees. “U.S. companies aren't going to be good with that,” he said.

To contact the reporter on this story: Stephanie Beasley in Washington sbeasley@bna.com

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

For More Information

A DOT fact sheet on direct flights to Cuban cities outside of Havana is available online here: http://src.bna.com/h41

Details about the DOT's tentative order for direct flights to Havana can be found here: http://src.bna.com/h43

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