U.S.-Cuba relations - A year of change

U.S.-Cuba relations: A year of change

First anniversary of new relationship is Dec. 17
Symbolic and tangible changes mark the year
Much work remains before there is a normal relationship
BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

In the year since the U.S.-Cuba rapprochement began, some things have
seemed to move at warp speed, but others have smacked into the reality
that the two former Cold War enemies still have two very different
systems and have barely talked to each other in five decades.

There have been important symbolic changes. An American flag now waves
over a U.S. Embassy in Havana, and a Cuban flag flies at the Cuban
Embassy in Washington, D.C., after an absence of more than 54 years.
President Barack Obama and Cuban leader Raúl Castro have met
face-to-face twice and talked by telephone three times, even joking
about the famously long speeches of Fidel Castro.

Cuba has been removed from the U.S. black list of state sponsors of
terrorism, and there have been talks on prickly issues such as
migration, human rights, and claims for confiscated property of U.S.
citizens and corporations.

Interactive timeline: A history of modern U.S.-Cuba relations

But because expectations were so high and many U.S. businesses were so
eager to engage after a half-century drought, some say Cuba has been
slow in taking up the United States on the new business opportunities
the Obama administration began outlining in January. Obama also has said
he wants to work with Congress to lift the embargo.

Expectations were high among the Cuban people, too, said Domingo
Amuchástegui, a former Cuban intelligence officer who left the island in
1994, because "in Cuba's political culture, when the president says
something is going to be done, take his word, it will be done. Cubans
who heard Obama thought this is the president's word."

But such high hopes have been tamped down. It was apparent after the
first round of normalization talks in Havana in January that
rapprochement would be a slow process, he said.

Some Americans imagined that U.S. companies with all their technical
know-how would rapidly expand Internet access on the island or that
Americans would be able to pick up a charger for their cellphone at a
U.S. mobile storefront in Havana, soon be visiting Cuba via a ferry from
Miami, and pulling out credit cards issued by U.S. banks to pay for
their hotel stays and to withdraw cash from ATM machines in Cuba.

All are theoretically possible under new U.S. rules, but it takes two to
tango, and Cuba is yet to green-light any of those opportunities.

Even though U.S. companies are free to form partnerships with Cuban
government entities to improve the island's Internet and telecom
infrastructure, the only deals announced so far have been a few roaming
and direct-connect arrangements. This summer, Cuba began rolling out new
public Wi-Fi hotspots that now number 50, but most Cubans don't have
regular access to the Internet and desire for connectivity is huge.

"It's all about what your benchmark was at the beginning of
rapprochement. If you had realistic expectations, then you see gradual
progress," said Richard Feinberg, a professor of international political
economy at the University of California-San Diego and a senior fellow at
the Brookings Institution. "Both Obama and Raúl Castro say this will be
gradual."

Tangible change

At the Summit of the Americas in April, Castro said that while the two
countries still have their differences, "we are willing to discuss
everything, but we need to be patient, very patient."

Castro's more conciliatory words to Obama in Panama were a watershed
event, Feinberg said. "Up until that time, the United States was the
implacable enemy and a threat to the security of Cuba. His remarks
changed the whole paradigm and atmosphere in Cuba."

The most tangible change in Cuba since last December has been the parade
of U.S. visitors, including Obama Cabinet members and State Department
delegations. On Wednesday, many baseball stars who defected, including
Los Angeles Dodgers outfielder Yasiel Puig, St. Louis Cardinals catcher
Brayan Pena and Chicago White Sox first baseman Jose Abreu, also visited.

For Alana Tummino, who accompanied a U.S. business delegation at a
recent international trade fair in Cuba, the realization that things had
changed significantly came as she sipped her morning coffee at the Hotel
Saratoga in Havana.

"A whole host of business leaders from the United States, including
former hard-line Cuban Americans, passed by, and that really signaled to
me that we're in a different era," said Tummino, who heads the Cuba
Working Group at the Americas Society/Council of the Americas.

American travelers have signed up for people-to-people tours in record
numbers, helping Cuba set a new record for international visitors this
year. There have been sports and cultural exchanges, U.S. governors have
toured Havana in vintage automobiles, and countless U.S. business
delegations have arrived in Cuba to test the waters.

The Obama administration has outlined an array of commercial activities
that U.S. businesses may engage in legally, even though most trade is
still prohibited by the embargo and U.S. investors can't invest in Cuba.

To empower the Cuban people, the opening allows U.S. companies to trade
with Cuba's private entrepreneurial sector. But there has been little
progress in that area — other than increased remittances trickling into
the hands of Cuban entrepreneurs to start and expand their businesses
and the entry into the Cuban market of San Francisco-based Airbnb, which
hooks travelers up for stays at private homes.

"There is the feeling that Obama freed up a lot restrictions [on doing
business with Cuba] with the new regulations and now it's on the Cubans
to show their willingness to work in various sectors," Tummino said.

She said one reason for the seemingly slow uptake on the part of the
Cuban government is a difference in priorities.

U.S policy puts a lot of emphasis on empowering and engaging the
non-state sector, she said. "But from the Cuban government's viewpoint,
that's a small percentage of the overall economy. They are very focused
on large projects in energy, biotechnology and tourism and those
projects are largely off the table in terms of American investment.

"We're seeing the Cubans taking their time to see what the opportunities
really are. For them, that requires a longer time of trust-building,"
Tummino said. "Hopefully we'll see all the business meetings and
collaborations start coming to fruition over the next few months."

The opportunities are there under the new regulations, said Saul
Cimbler, a Cuban-American who is president of U.S.-Cuba Business
Advisory. "Not withstanding the political rhetoric, there is forward
motion."

"Most people going to Cuba these days are looking to hit a home run but
that is putting the cart before the horse. You need to assess what is
really practical," said Cimbler, who said lately he has been spending 10
to 12 days a month in Cuba on business trips.

To get business deals done in Cuba, he said, requires a lot of work and
creativity. Another important thing to remember, Cimbler said, is
business isn't and won't be conducted the way it was before the 1959
Cuban Revolution.

It's not just business people interested in engagement with the island.
A supporter of such efforts is Alan Gross, the USAID subcontractor the
Cubans accused of smuggling military-grade equipment into the country.
He said recently that "while I served as an involuntary catalyst for
this change, I hope now to help foster continued good relations between
our countries and our citizens."

But not everyone is in favor of engagement, and over the past year,
members of the Cuban-American delegation in Congress have introduced
legislation that seeks to limit the Obama opening. Congressional
supporters of engagement, meanwhile, have been busy trying to line up
co-sponsors for bills lifting the travel ban and the embargo.

South Florida Republican Rep. Ileana Ros-Lehtinen said the opening
hasn't worked and that the progress the Obama administration sees "is
not reflected in the mass arrests and the increase in Cubans fleeing
that has marked this year."

Human rights is among the more contentious issues between the two
countries. While the United States has criticized the jailing of
dissidents and insisted on the importance of respecting basic civil
rights, such as freedom of speech, press and assembly, Cuba views human
rights through a somewhat different prism of social well-being,
emphasizing its free healthcare as an example of respect for human rights.

Although the number of political prisoners has fallen sharply in the
past year, the number of political arrests is way up. Through November,
the Cuban Commission for Human Rights and National Reconciliation has
documented 7,686 political arrests, most resulting in short-term
detentions of a few hours or days.

In its November report, the commission said the Castro regime was
reacting with "ever greater repressive fury" against those who only want
freedom for political prisoners and respect for civil and other basic
rights.

Not only has there been "disappointment by the naive view of the White
House regarding its misguided policies toward communist Cuba,"
Ros-Lehtinen said, but "little has changed for the average Cuban while
the Castro brothers continue to rejoice that they have an ally on
Pennsylvania Avenue."

Ros-Lehtinen said in the coming year she expects Obama to offer more
concessions to the Cuban government, including possibly the release and
pardon of Ana Belen Montes, a former senior analyst at the U.S. Defense
Intelligence Agency who pleaded guilty and was sentenced to 25 years in
October 2002 for spying for the Cuban government.

Financial front

Francisco "Pepe" Hernández, president of the Cuban American National
Foundation and a Bay of Pigs veteran, said he has mixed feelings.

Although he regards the resumption of diplomatic ties as positive and
says it has created tremendous interest in all things Cuban, he worries
that along with it has come "an acceptance by the international
community of the political and economic system in Cuba such as it is."

Cuba, he said, needs an economic transformation and improvement in human
rights but "now there seems to be this acceptance that Cuba is owned by
the extended Castro family — and they are preparing to maintain their
political and economic power."

Even Cuban-Americans, he said, are starting to lose touch with what is
happening inside Cuba. "The American people think everything is going to
be OK and there will be no bad consequences but the Cuban people don't
believe it. Let's see what happens when Raúl surrenders his official
powers," Hernández said. Castro has said he plans to retire on Feb. 24,
2018. He has named First Vice President Miguel Díaz-Canel as his successor.

In Cuba, there's a lot of talk about economic and even political reforms
floating around, said Amuchástegui, "but I don't know if they will show
up at the Communist Party Congress." It's tentatively set for April.
During the last Congress, a series of limited market-economy reforms
emerged.

Amuchástegui said that until 2018, he thinks the Cuban leadership will
be cautious, slow and seek to avoid tensions and conflicts. "Nothing
much will be happening until after 2018," he said.

"Raúl Castro is increasingly a lame duck. Whether his administration has
the energy to accelerate change, we'll have to see," said Feinberg. "He
may think that he's done enough."

The coming year is pivotal, said Ted Piccone, a senior fellow at the
Brookings Institution, because there's quite a bit of uncertainty when
it comes to U.S. politics. Some Republican presidential hopefuls have
said they will reverse the Obama opening.

Obama may feel he needs to do as much as possible, using his executive
authority, to further the relationship with Cuba and enhance his legacy
in his remaining time in office, say some analysts.

The president has said he wants to visit Cuba, but there is a sense in
Washington that he wants to see more compromise and deliverables on the
part of Cuba before scheduling a trip.

"I think the idea now is that it would be good for Obama to go just
before his presidency is over to cement his legacy," said Tummino.
"After the 2016 elections might make the most sense."

Several analysts said they expect to see progress soon on agreements on
civil aviation and counter-narcotics. Feinberg said it's also possible
Cuba will give approval for the first U.S.-based ferry and cruise
service to Cuba in 2016.

Just in time for the Christmas season, the United States and Cuba
reached agreement Dec. 10 on a pilot program for direct-mail service
that will take mail directly from the United States to Cuba several
times a week, rather than through third countries. And Wednesday, both
sides said they had reached an understanding to restore regularly
scheduled commercial flights between the two countries.

There have already been two environmental agreements — one that
establishes sister relationships between marine sanctuaries in Cuban
waters and the Florida Keys and a more far-reaching accord that will
make it easier for U.S. and Cuban scientists to work together to protect
the environmental resources of both nations.

"Even if the next president does not share President Obama's desire to
go forward with normalized relations with Cuba, the agreement puts
bilateral environmental cooperation on a secure and lasting footing,"
said Elizabeth Newhouse, director of the Center for International
Policy's Cuba Project. The Center has been a long-time advocate of
easing restrictions on scientific exchanges with Cuba.

On the financial front, there has been both progress and frustration.
Pompano Beach-based Stonegate Bank became the first U.S. bank to
establish a correspondent relationship with a Cuban financial
institution and recently announced that its debit cards would work to
pay bills at government hotels, restaurants and other card-accepting
merchants on the island. But other banks have remained wary and have
exercised extreme caution when dealing with any Cuban-related business,
sometimes holding up payments that are completely legal.

Many challenges remain. One immediate one is the more than 3,000 Cubans
stranded in Costa Rica because Nicaragua, an ally of Cuba's, won't let
them pass through its territory on their route north to the United States.

Preferential U.S. migration policies, such as the Cuban Adjustment Act
and wet foot/dry foot, which allows Cubans who arrive on U.S. soil —
even without a visa — to stay while those interdicted at sea are
generally sent back, have acted as a magnet for Cubans migrants.

"The Central American crisis is part of a much bigger migration problem.
The route through South and Central America [often taken by Cuban
migrants] is like a highway to the United States where everyone is
dry-foot," said William LeoGrande, a government professor at American
University.

Unless the United States ends the wet foot/dry foot policy, he said,
Cubans will continue to find alternative routes to the U.S. through the
Caribbean and Latin America.

Cuba also wants to engage on sensitive issues. Castro has said he wants
the lifting of the embargo, the return of the U.S. Navy base at
Guantánamo Bay, and the end to Radio and TV Martí and other acts of
hostility against Cuba by the United States. Cuba also wants reparations
for human damage caused by U.S. incursions against the island, as well
as economic damages due because of the embargo.

The United States, meanwhile, would like to see meaningful progress on
compensation for $1.9 billion ($8 billion, including interest) in claims
by U.S. citizens and corporations who had their Cuban property seized.

Feinberg, who released a Brookings white paper on claims earlier this
month, said it's possible there could be an agreement — even within the
next year — if both countries decide settlement of property issues would
serve their national security interests.

For the United States, a satisfactory agreement would encourage Congress
to lift the embargo, he said. "In Cuba, it could be a good deal, too,
because it would result in increased investment flows and more access to
international capital markets."

A settlement could turn a conflictive problem into a win-win situation,
he said.

"I think the Cubans would be wise to do some big deals [with U.S.
companies] that make people think this is really going to pay off," said
LeoGrande. "But you've got the embargo still in place, and I think it's
part of the reason the Cuban response has been slow. They know it is not
going away until at least 2017 and maybe after."

THE NEW U.S.-CUBA RELATIONSHIP
Jan. 3, 1961 — The United States breaks diplomatic ties with Cuba.

Feb. 7, 1962 — U.S. imposes complete economic embargo on Cuba.

Dec. 17, 2014 — The United States and Cuba announce they will begin a
process of normalizing relations. As part of the deal, the United States
releases three of five remaining Cuban spies serving long jail terms and
Cuba releases a CIA agent serving a long term in Cuba. As a humanitarian
gesture, Cuba releases USAID subcontractor Alan Gross, who had spent
five years in a Cuban jail. A limited economic and travel opening toward
Cuba also is announced.

Jan. 15, 2015 — U.S. Commerce Department and Treasury roll out new
regulations that expand trade with and travel to Cuba.

Jan. 22, 2015 — First round of normalization negotiations takes place in
Havana. Talks on migration issues also held.

Feb. 13, 2015 — U.S. releases rules on what types of goods and services
may be imported from Cuba's self-employed sector.

April 11, 2015 — President Barack Obama and Cuban leader Raúl Castro
hold talks on the sidelines of the Summit of the Americas in Panama.

May 29, 2015 — State Department removes Cuba from the list of state
sponsors of terrorism. It had been on the black list since 1982.

July 20, 2015 —The United States and Cuba renew diplomatic relations and
open their embassies. Cuba holds a formal flag-raising ceremony.

Aug. 14, 2015 —The United States holds a flag-raising ceremony to
officially reopen its embassy in Havana and Secretary of State John
Kerry travels to Cuba.

Sept. 18, 2015 — U.S. releases another set of Cuba regulations that
allows U.S. companies to have a storefront or warehouse on the island,
loosens some banking regulations, makes travel easier and permits ferry
companies and cruise lines to offer Cuba itineraries without seeking
prior U.S. licenses.

Sept. 28, 2015 — Raúl Castro delivers his first speech at the United
Nations. He calls for the embargo to be lifted, return of the U.S. Navy
base at Guantánamo Bay, reparations for damages caused by the embargo,
and the end to Radio and TV Martí.

Sept. 29, 2015 — President Obama and Raúl Castro have bilateral meeting
on sidelines of U.N. General Assembly.

Oct. 27, 2015 — United Nations approves a resolution condemning the
embargo 191-2. The U.S. and Israel cast the only dissenting votes.

Dec. 8, 2015 — U.S. and Cuban delegations open dialogue on dealing with
claims on property confiscated from U.S. citizens and corporations and
Cuban counter-claims for damages caused by the embargo and U.S.
hostility against the Cuban people.

Dec. 10, 2015 - The United States and Cuba reach agreement to start a
pilot program that will take mail directly to Cuba from the United
States, rather than through third countries.

Source: Miami Herald staff

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