Havana lashes out against Obama directive on friendlier Cuba policy

Former Secretary of Commerce supports U.S., Cuba normalization

Former U.S. Secretary of Commerce under President George W. Bush, Carlos Gutierrez, discusses his change of heart on the Cuban embargo. With the Obama administration's decision to normalize relations with Cuba, Gutierrez believes it is time to end
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Former U.S. Secretary of Commerce under President George W. Bush, Carlos Gutierrez, discusses his change of heart on the Cuban embargo. With the Obama administration's decision to normalize relations with Cuba, Gutierrez believes it is time to end

President Barack Obama’s recent directive to make his friendlier policies toward Cuba “irreversible” got applause from many interested parties and travelers — particularly with the end of limits on the amount of Cuban cigars and rum visitors can bring back from the island.

But Havana appears a lot less enthusiastic.

The government showed its discontent during a series of protests across the island that paralyzed universities and other schools under the slogan “Hornet’s nests against the blockade,” a reference to the U.S. trade embargo.

“Obama is finishing his term, but the blockade remains,” Josefina Vidal, head of the U.S. department at the Cuban Foreign Ministry, declared during a rally on Monday at the University of Havana.

The Obama administration, in a race against time to consolidate policies it views as a key part of its legacy, on Friday lifted the limits on personal purchases of tobacco and rum as part of new regulations that take effect this week.

Vidal’s message in Havana seemed clear: The Cuban government is conditioning any progress on bilateral relations to an end of the embargo. In the meantime, any new easing of U.S. sanctions will be courteously received but likely will not be implemented.

“It’s hard work to implement and carry out” Obama’s regulatory reforms, Vidal added, “because they retain restrictions that do not allow us to move forward.”

The new U.S. regulations “are positive” but have a limited reach and benefit “more the United States than Cuba and the Cuban people,” Vidal said. She noted several times in her speech to students that Obama can still use his presidential powers to sidestep other parts of the embargo.

Some Cuba watchers in the U.S. business sector agree that the embargo remains a powerful impediment to investing on the island.

“Nothing will happen with the big American companies until the embargo is lifted,” said Saul Berenthal, president of Cleber LLC, which plans to assemble farm tractors in Cuba.

Vidal expressed the Cuban government’s disappointment that Obama has not authorized direct U.S. investments in the island outside of the telecommunications sector, and has not allowed increased U.S. exports to Cuba or imports from Cuba, with the exception of some pharmaceutical products. All those are essential for an economy hammered by the recent plunge in Venezuelan subsidies.

She also noted that Obama made no changes in U.S. banking restrictions on Cuba. “Until today, Cuba has been unable to make deposits … or make payments to others” in U.S. dollars, even though that restriction was eased in previous Obama reforms. “Banks around the world are still terrified to work with Cuba,” she said.

Banks around the world are still terrified to work with Cuba.

Josefina Vidal, Cuban Foreign Ministry

The diplomat, who heads several of the Cuban teams negotiating with U.S. counterparts, did not mention that the administration did approve the export of consumer goods for personal use, or that U.S. companies can now provide services to state enterprises or individuals related to the development or maintenance of infrastructure that directly benefits the population, such as hospitals and water and transportation services.

Such services, like the approval of investments in telecommunications, would require an interest on the part of Cuban officials, who until now have preferred to do business with other countries, like China. The government also has done nothing to facilitate the import of U.S. products by Cuban individuals — approved by Obama in early 2015.

Following a visit by U.S. Commerce Secretary Penny Pritzker in October of 2015, Cuban authorities announced that all exports to Cuba would follow “established channels” and that no changes were planned for the state monopoly on imports.

The “wait and see” strategy appears to have generated some progress. Cleber LLC, for example, announced during a recent Miami conference on doing business with the island that it had obtained a U.S. license to sell agricultural and construction equipment to state enterprises. That suggested that the U.S. government has accepted that doing business with the state sector in Cuba is inevitable.

We have designed the policy very much to have the maximum benefit to the Cuban people broadly…

Obama administration official

“We have designed the policy very much to have the maximum benefit to the Cuban people broadly. But in so doing, we are not restricting engagement with the Cuban state,” one high-ranking U.S. official said during a teleconference with journalists to explain the new regulations.

Some experts said that Cuba’s unwillingness to act is part of a strategy to force the U.S. to acquiesce to their demands.

“It is not surprising that the Cuban government is waiting as long as it can, thinking that the longer it waits, the better deal it can get,” said John Kavulich, president of the U.S.-Cuba Economic and Trade Council. “This is a strategy that makes sense because the Obama administration is willing to do anything to create a commercial, economic and political scenario that can survive” the end of his presidency.

What appeared to have most irritated the Cuban government was the presidential directive itself, which will continue to support democracy programs on the island.

Vidal described it as “meddlesome” because “it does not hide that the goal of U.S. policy is to advance its own interests in Cuba … and questions profoundly our political system.”

Cuban officials view the democracy programs as part of U.S. efforts at “regime change,” and the state-run Granma newspaper immediately questioned whether increased transparency would make them “less subversive.”

But even within the critical outbursts, Vidal’s comments also reflected some progress in bilateral relations.

She described the Obama directive as “a significant step … toward normalization” and praised it for recognizing “the Cuban government as a legitimate and equal partner” in negotiations. But she also told the University of Havana students more than once that the Obama directive did not make his new policy toward Cuba irreversible.

“The president who succeeds him is under no obligation to continue it,” she said.

The upcoming presidential elections may well put a temporary halt to the effort to warm up U.S.-Cuba relations. The two governments have agreed to seven more negotiating sessions this year and to speed up work on six bilateral accords, Vidal said in September.

The bilateral accords “are not a waste of time,” said Kavulich, although over the last 600 days, Cuba’s imports of U.S. agricultural products have continued to drop; only American Airlines and JetBlue have received Cuban permission to open offices on the island; and the plan to assemble tractors in Cuba has not moved forward.

“U.S. companies still cannot export directly to private companies in Cuba. And on the U.S. side, there’s only one product that can be imported: coffee,” Kavulich said. “So there’s a lot that both countries can do during these last days.”

Follow Nora Gámez Torres on Twitter:@ngameztorres

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