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Robinson School of Business Thought Leader

Coincidence? I don’t think so.

The day before Pope Francis arrived in Cuba on Saturday, September 19, Treasury Secretary Jacob Lew announced changes in U.S. regulations regarding doing business in Cuba. It’s not quite Swiss cheese but there are more holes in the embargo every day.

The new regulations went into effect Monday, September 21. Coincidence? Absolutely not.

At the same time unnamed sources floated the trial balloon that the United States might, for the first time, abstain on the United Nations resolution that Cuba introduces every year condemning the U.S. economic embargo of the nation. Last year the only countries to vote against the resolution were the United States and Israel.

Here’s what’s going on. The United States first imposed an economic embargo on Cuba in 1961, shortly after the Cuban government of Fidel Castro seized the property of foreign businesses. Over the years, the embargo was tightened by executive order and then by laws passed by Congress, culminating in the 1996 Helms-Burton Act which was passed by the Republican majority in both houses of Congress and signed into law by President Bill Clinton.

In December 2014, Presidents Barack Obama and Raúl Castro announced that the United States and Cuba would negotiate the resumption of diplomatic relations and President Obama said that he would seek legislation to end the embargo.

The rub for the White House is that the executive branch has constitutional authority to establish and break relations with foreign nations. But the embargo is law and can only be eliminated by an act of Congress. The chances of getting legislation through Congress are pretty close to zero. As a result the president has begun nibbling exemptions to the embargo to make it easier for Americans to travel to Cuba, to make it easier for U.S. business to sell communications equipment to the nation and, with these latest changes, to open offices there, and to establish ferries and cruise ship ports of call.

Upon his arrival in Cuba, Pope Francis praised the U.S. and Cuba for moving to normalize diplomatic and trade relations. The timing of Secretary Lew’s announcement was not coincidence. The administration wants to use the pope’s visit to Washington and his address to a joint session of Congress to exert pressure to end or at least modify the embargo.

Of course the government of Cuba plays a determining role. It must decide if Cuba will allow ferries and cruise ships from the United States, if it will buy U.S. telecommunications equipment, if it wants U.S. companies to open offices there, and if independent Cuban business can buy from and sell to the United States.

If you don’t understand what’s legal and what’s not, you are not alone. The law was complicated before. The exemptions add to the confusion. Trade with Cuba is not an on/off switch. Congress has made exemptions in the past for cultural products — art, literature and music — and then for food and medicine. The Clinton, Bush and Obama administrations have loosened, tightened and then loosened again the interpretation of the embargo.

The World Affairs Council and Georgia State University’s J. Mack Robinson College of Business will hold a conference on Tuesday, September 29 with experts from the Departments of State, Treasury, Commerce and Agriculture to explain these new regulations. Join us to find out what is permitted and what’s not. Former U.S. Secretary of Commerce Carlos Gutiérrez is the keynote speaker, and the minister counselor for commercial affairs at the Cuban Embassy to the United States will share his perspective. More information on the conference can be found at www.wacatlanta.org.



Ambassador Charles Shapiro is president of the World Affairs Council of Atlanta and a senior lecturer at the J. Mack Robinson College of Business at Georgia State University.



Ambassador Charles Shapiro is president of the World Affairs Council of Atlanta and a senior lecturer at the J. Mack Robinson College of Business at Georgia State University.


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