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| Michael Ranneberger
Coordinator for Cuban Affairs Bureau for Inter-American Affairs Statement before the Subcommittee on Trade The House Ways and Means Committee Washington, DC, May 7, 1998 |
Mr. Chairman, Members of Congress:
Good afternoon and thank you for the opportunity to speak to you today on the subject of U.S. economic and trade policy toward Cuba. I would like to make brief remarks and submit this more comprehensive statement for the record. I look forward to your questions.
U.S.-Cuba Policy
To begin, I want to establish the context for our Cuba policy. In his statement of March 20, President Clinton said:
The people of Cuba continue to live under a regime which deprives them of their freedom and denies them economic opportunity. The overarching goal of American policy must be to promote a peaceful transition to democracy on the island.
The Cuban Government continues to be one of the most repressive regimes in the world. It does not listen to or respond to the voices of its people. There is no free press or political opposition, no private sector or independent civil society that can publicly discuss or criticize government policies.
Today in Cuba there are 400-500 political prisoners. These are individuals imprisoned because of their beliefs and their efforts to express them peacefully--actions that are legal and normal in our free societies. In this hearing on economic policy, I would like to draw your attention to one of these individuals, an economist, Marta Beatriz Roque, a founding member of the "Dissident Working Group."
Once a respected economics professor at the University of Havana, Marta Beatriz Roque is imprisoned because she wrote an independent critique of government economic plans. She sought only to express her views of the Cuban economy, pointing out serious problems with its central planning policies. Cuban authorities have denied her adequate medical care and she is seriously ill. We call on the Cuban Government to release Marta Beatriz Roque, to ensure that she receives adequate medical care, and to allow her to carry out her peaceful activities.
As the President said, our goal in Cuba is to promote a peaceful transition to democracy and respect for human rights. We do this through four essential elements: pressure on the Cuban Government through the embargo and the Libertad Act; development of a multilateral effort to promote democracy; support for the Cuban people consistent with the 1992 Cuban Democracy Act (CDA) and the Libertad Act; and measures to keep migration in safe, legal, and orderly channels. We also seek, through the Libertad Act, to protect the legitimate interests of U.S. citizens whose property has been expropriated in Cuba.
The President has also clearly stated that the United States would respond reciprocally if the Cuban Government implemented fundamental, systemic change. Cuba has not done so.
Papal Visit and March 20 Measures
We recognize the importance of the historic visit of Pope John Paul II to Cuba. The Pope brought a message of truth, hope, and support for the Cuban people--his presence in Cuba was electrifying. I attended the Mass in Revolution Square and was deeply moved by the sight of at least a half million Cubans listening to, welcoming, and cheering the Pope's forceful, direct call for freedom and human rights. During those moments, the people of Cuba held the attention of all of us who care about their struggle for freedom and justice. We must continue to support them in their aspirations.
The measures the President announced March 20 are designed to support the Cuban people and to assist in the development of independent civil society. I want to emphasize, as the Secretary said, that the measures "do not reflect a change in policy toward the Cuban Government. That policy has been, and remains, to seek a peaceful transition to democracy." I will discuss the March 20 measures in greater detail later.
U.S. Sanctions Policy
Before turning specifically to Cuban issues, let me touch briefly on U.S. sanctions policy. Under Secretary Stuart Eizenstat testified on this subject before your subcommittee in October. I will not attempt to review all of Under Secretary Eizenstat's excellent statement, but I want to highlight a few of the points he made that apply especially to Cuba.
As Under Secretary Eizenstat explained, economic sanctions can be and are a valuable tool for enforcing international norms and protecting our national interests. We should, however, resort to sanctions only after other appropriate diplomatic options have been aggressively pursued and have failed, or would be inadequate. Although, in many instances, engagement can be preferable to isolation, in the case of some rogue regimes, engagement would simply feed the regime's appetite for inappropriate or dangerous behavior.
As Under Secretary Eizenstat said, while there are advantages to multilateral sanctions, there are times when important national interests or core values are at issue that we must be prepared to act unilaterally. There can be no "one-size fits all" approach. The President must have the flexibility to tailor our response to specific situations.
Sanctions are used for a variety of purposes, including:
As Under Secretary Eizenstat noted, our Cuba policy is illustrative of one of the principal goals of economic sanctions--to encourage our friends and allies to adopt policies that can advance our common interests. Our allies and major trading partners disagree with our embargo of Cuba and have urged us to change or alter the provisions of the Libertad Act.
At the same time, our allies have said they agree with us on the key goal of encouraging democracy and human rights in Cuba. Even when supporting Cuba's resolution at the UN General Assembly against the U.S. embargo of Cuba, the EU made clear its opposition to Cuba's human rights policies. In explaining the vote of EU members in favor of Cuba's resolution, Luxembourg-- in its role of President of the European Union--issued a strong condemnation of Cuba's human rights record, noting concern about the "persistent absence of progress toward democracy," "non-respect for political rights," "increasing violations of civil and political rights," and "harassment of those who seek to bring democracy to Cuba by peaceful means."
The Embargo and The Cuban Economy
For three decades, a fundamental premise of our policy toward Cuba has been that the current Cuban Government will not institute political and economic change unless it has to, and it will go only as far as it has to in order to maintain absolute control. Therefore, if we want to see fundamental change in Cuba occur, pressure is necessary.
The U. S. policy of applying economic pressure originated soon after Fidel Castro came to power in 1959. The embargo formally began under President Kennedy, and has been supported by all successive Presidents.
One of the major reasons for the imposition of the embargo was the Cuban Government's failure to compensate thousands of U.S. companies and individuals whose properties, large and small, were confiscated after the revolution. The Cuban Government specifically targeted and took properties owned by U.S. nationals. Under the Cuba claims program in the 1960s, the U.S. Foreign Claims Settlement Commission (FCSC) certified 5,911 valid claims by U.S. nationals against the Government of Cuba. The Castro Government also took property from thousands of Cubans, some of whom have since become U.S. citizens.
The impact of the embargo was somewhat offset during the Cold War years by $5-6 billion annually in Soviet subsidies, but these ended with the collapse of the Soviet Union and other European Communist regimes in the early 1990s. Cuba suffered a 35% decline in gross domestic product between 1989 and 1993, revealing an inherently dysfunctional economy. Food shortages and failure of basic public services led to disturbances which threatened to challenge the regime.
These problems, coupled with the continuing embargo, forced the Cuban Government to undertake very limited economic reforms to enable it to survive. The Cuban Government in the mid-1990s permitted Cubans to offer certain services privately under strict government scrutiny, but in 1997 introduced heavy taxes which forced many out of business. It appears that employment in this sector peaked in 1996 at around 206,000 and fell in 1997 to about 170,000. In 1994, the government introduced agricultural markets at which state and private farmers could sell surplus products at market prices after delivering the required quota to the state, which helped to alleviate grave food shortages and nutritional problems.
Cuba has actively sought foreign tourism and investment, while continuing to forbid private investment by Cuban citizens. It succeeded in attracting a limited amount of investment, but its overall "investment climate" remains hostile to private enterprise.
In 1993, the Cuban Government made it legal for its citizens to possess and use the U.S. dollar, which has become the major currency. Cuban failure to launch serious economic reforms has led to the development of a large black market and growing corruption. Those with access to dollars can purchase imported goods at government-run dollar stores. To earn dollar tips, many skilled doctors, teachers, engineers, and scientists are working in restaurants or as taxi drivers.
Nevertheless, under the slogan "socialism or death," the Cuban Government has resisted any credible effort to adopt market-based policies and continues tight state control of its highly centralized economy. Over 80% of the labor force is employed by the state.
The Embargo and The Libertad Act
Seeking to hasten a democratic transition in Cuba, Congress passed in 1992 the Cuban Democracy Act (CDA), which tightened the embargo by prohibiting U.S.-owned or -controlled subsidiaries located abroad from doing business with Cuba. The Act also provided for avenues to support the Cuban people, which, as I noted above, constitute a principal focus of our policy.
As change continued in Eastern Europe in the 1990s, but not in Cuba, concerned Members of Congress sought to develop ways to both deal with the continuing expropriation problem and apply additional pressure for peaceful change on the Cuban Government. This led to the development of the "Cuban Liberty and Democratic Solidarity Act," called the "Libertad Act," and known as the Helms-Burton Act after its principal sponsors. When in February 1996 Cuban MiGs shot down two civilian aircraft in international air space, killing three U.S. citizens and one resident, Congress passed this act by overwhelming margins. The President signed it into law on March 12, 1996.
Title I of the Libertad Act, for the first time, codified the embargo. The Act specifies conditions under which the embargo can be lifted or suspended once a new Cuban Government begins implementing a genuine transition to democracy. The Administration believes that until Cuba is engaged in a process of democratization, which includes free and fair elections, respect for human rights, and due process of law--just to mention a few elements--the embargo should be maintained.
Title I of the Act also strengthens enforcement of the embargo by expanding the civil enforcement authority available to the Office of Foreign Assets Control (OFAC) of the Department of the Treasury, which is charged with enforcing the restrictions on financial transactions with Cuba. The State Department strongly supports the embargo enforcement efforts of OFAC, the Department of Commerce, and the U.S. Customs Service.
The Administration continues to believe that maintaining pressure on the Cuban Government for fundamental change through economic sanctions is essential. The increased penalties and clarifications in Title I of the Libertad Act help send the message that violations of the embargo will not be tolerated.
Equally important, we work closely with OFAC and the Department of Commerce on license requests for humanitarian assistance, as encouraged by the Cuban Democracy Act and the Libertad Act.
Helms-Burton and the Multilateral Initiative
Perhaps the best known and most controversial aspects of the Libertad Act are Titles III, which created a private cause of action in U.S. courts, and Title IV, which prohibits visas and entry into the United States to those who "traffic" in confiscated property claimed by a U.S. national. These provisions prompted the European Union to initiate a complaint against the U.S. in the World Trade Organization (WTO). Canada and Mexico called for consultations under the provisions of NAFTA.
The President allowed the Title III lawsuit provisions to enter into force on August 1, 1996. At the same time, because of the intense interest in the Act among our allies and trading partners, he saw an opportunity to increase international pressure for change through a U.S.-led multilateral initiative to promote democracy in Cuba. In order to achieve this, the President in July 1996 suspended the right to file suit under Title III for 6 months, effective August 1, while calling on our friends and allies to step up efforts to promote a transition to democracy in Cuba. This initiative has changed the terms of the international debate about Cuba.
We have been able to manage this serious disagreement with close friends and trading partners and advance the President's multilateral initiative to promote democracy in Cuba. Under Secretary Eizenstat reached an "Understanding" with the EU in April 1997 under which the EU agreed to suspend its WTO case and step up its efforts to promote democracy in Cuba. The parties also agreed to negotiate disciplines on property confiscated in contravention of international law, including property in Cuba, and principles on conflicting jurisdictions. These discussions are in a crucial phase and, if an agreement is reached, the Administration will discuss with Congress the possibility of obtaining authority to waive Title IV of the Act.
The multilateral initiative to promote democracy has resulted in several important steps to promote democracy in Cuba. Perhaps the most important of these is the European Union's Common Position, which links improved relations with Cuba to fundamental democratic changes. The EU nations also created a Human Rights Working Group among their embassies in Havana to increase contact with dissidents, human rights groups, and independent elements of civil society. They have forcefully called for the Cuban Government to release political prisoners. In addition, Under Secretary Eizenstat's visit to four Central American countries last year energized their efforts to promote change in Cuba; leaders of these nations have spoken out. At the United Nations General Assembly in December 1997, more countries than ever before co-sponsored the U.S. resolution on the human rights situation in Cuba. The Cuba resolution at the UN Human Rights Commission in Geneva this year had 27 co-sponsors, including many key EU allies, although--tragically--it did not pass. The Department issued a statement expressing its concern that some members of the commission chose to turn their backs on the suffering of the Cuban people. We believe it is unconscionable that the vote will end the mandate of the UN Special Rapporteur in Cuba.
Non-governmental organizations (NGOs) are increasing their support for peaceful, democratic change on the island. Pax Christi, the Dutch human rights organization, is leading a coalition of European NGOs to focus on the deplorable human rights situation in Cuba, and has held two major conferences. In August 1997, Amnesty International issued a special 38-page report entitled Cuba: Renewed Crackdown on Peaceful Government Critics, which documented the Cuban Government's campaign against those who work for human rights and democracy. In August 1997, the American Bar Association awarded its annual "International Human Rights Award" to Dr. Rene Gomez Manzano and Dr. Leonel Morejon Almagro, two members of the Dissident Working Group in Cuba who were unable to receive the award because they had been arrested by the Cuban Government.
As a result of these efforts--the rhetoric of the Cuban regime notwithstanding--Cuba is hearing a concerted message on the need for fundamental, democratic, systemic change.
Title IV Enforcement
Through a special unit established in the Office of Cuban Affairs, the Department continues to implement Title IV of the Libertad Act based on facts and the terms of the law.
In addition to seeking information from claimants about their claims, we are making maximum use of the limited amount of information available from all sources on foreign investment in Cuba. The Cuban Government claims there are over 300 joint ventures with foreign firms, without regard to whether they are involved with U.S.-claimed property. We believe this number is inflated, but we are developing a database to track activities of joint ventures and gather information on the location of property subject to certified claims. Gathering reliable information is a difficult and time-consuming process.
Other Aspects of Economic Policy Toward Cuba
Before I describe in more detail our efforts to provide humanitarian assistance to the Cuban people, I want also to touch on other aspects of economic policy, some of which are also contained in the Libertad Act. The United States opposes reintegration of the current Cuban Government into international financial institutions and regional economic groupings. We are urging the European Union, for example, to apply to Cuba the human rights and democracy standards of the Lome Convention, under which the EU provides economic benefits to developing nations, as it considers Cuba's application to join the Lome Convention.
The U.S. discourages companies from other countries from investing in Cuba. Under the current regime in Cuba, such investment tends to increase the power and control of the Cuban Government rather than benefit the people.
We recognize, however, that some companies from other countries are investing in Cuba. As part of the multilateral initiative to promote democracy in Cuba, Under Secretary Eizenstat is leading an effort to press businesses in Cuba not involved with contacted property to recognize and promote "best business practices." These are fundamental rights taken for granted in the Western world that the Cuban Government does not acknowledge, such as free speech and association; the right to join an independent labor union; and even the right to hire and pay an employee directly without intervention from the State. The Trans Atlantic Business Dialogue, the North American Committee of the National Policy Association, and the Dutch human rights organization, Pax Christi, have all endorsed this concept and are encouraging companies operating in Cuba to implement best business practices.
Support for the Cuban People
A fundamental aspect of U.S. policy toward Cuba is to provide support for the Cuban people, without supporting the Cuban Government. This focus has been a key element of our policy for most of this decade beginning with the Cuban Democracy Act of 1992. These efforts were strengthened by President Clinton's initiatives in October 1995 to encourage human rights organizations and other non-governmental groups and individuals in the U.S. to develop contacts on the island. Those steps complemented earlier efforts to improve telecommunications service between the U.S. and Cuba, and to encourage private humanitarian donations to NGOs in Cuba. The 1995 initiatives included licensing U.S. NGOs to assist independent Cuban NGOs; allowing sales and donations of communications equipment to Cuban NGOs; authorizing establishment of news bureaus; increasing academic, cultural, and educational exchanges; and allowing under a general Treasury license once-a-year family visits to Cuba in cases of humanitarian emergencies.
Since the October 1995 measures were announced, the Administration has licensed dozens of trips, programs, and other activities by NGOs and institutions in the U.S. aimed at strengthening independent civil society. Several U.S. NGOs have begun sharing expertise and modest resources with Cuban partners, American students and teachers are meeting with their peers, and U.S. professionals and researchers are establishing contacts and cooperation with colleagues on the island.
To foster the development of independent civil society in Cuba through support for the Cuban people, the Department works through a program administered by the U.S. Agency for International Development (USAID), pursuant to Section 109 of the Libertad Act. With valuable input from many agencies and the Congress, since it began in the fall of 1995, $2.45 million has been approved for U.S. NGOs under this program. Of that, $2 million has been approved in the last 12 months. An additional $1.8 million in new project proposals is under review.
These projects are wide-ranging, promoting the free flow of information to, from, and within Cuba. Among other activities, they will enable independent community grassroots organizers, professional organizations, and the private agricultural sector to meet their counterparts in Latin America, the Caribbean, and the U.S.; facilitate contact between Cuban environmentalists and environmental NGOs in other countries; and promote best business practices for foreign investors not involved in confiscated property to follow inside Cuba in order to promote workers' rights.
The Department takes very seriously its responsibility to assist in the provision of humanitarian assistance to the Cuban people. We work closely with the Department of the Treasury's Office of Foreign Assets Control and with the Department of Commerce to ensure appropriate licenses are issued. Since the passage of the Cuban Democracy Act in 1992, OFAC and the Department of Commerce have issued 50 licenses for exports of medicines and medical equipment from U.S. companies or U.S.-owned subsidiaries, subject to appropriate end-use monitoring. These licenses include 12 authorizations for travel to Cuba by representatives of American pharmaceutical companies to explore possible sales. Since the passage of the CDA in 1992, over $2 billion in humanitarian donations has been licensed, including nearly $275 million for medicines and medical equipment, and $13 million in food. The United States is the largest donor of humanitarian assistance to Cuba.
March 20 Measures
Pope John Paul spoke eloquently on the need to respect human rights and fundamental freedoms, to release prisoners of conscience, and to allow the development of independent civil society. When Secretary of State Albright met with the Pontiff in Rome, she discussed prospects for change in Cuba. The Pope was optimistic, speaking of the crowds who attended masses throughout the island, culminating in the huge mass in Revolution Square in Havana. John Paul II has publicly made clear his hope that his visit will propel Cuba toward a process of fundamental change, just as his first visit to Poland did.
This historic visit left us with a challenge--how to sustain the religious opening created by the Pope's visit, how to increase support for the Cuban people, and how to encourage a process of fundamental change without providing resources which will prop up Castro's regime. We believe the measures announced March 20 will do that.
The new measures are a strong response to the Pope's visit and enhance support for the Cuban people in their aspiration for a peaceful democratic transition.
As the Secretary of State said on March 20, we are taking these steps "to empower Cuban citizens . . . (and) not because of anything the Castro regime has done . . . ." In announcing his decision on March 20, President Clinton said: "To build further on the impact of the Pope's visit, to support the role of the Church and other elements of civil society in Cuba, and to thereby help prepare the Cuban people for a democratic transition, I have decided to take the following steps."
First, the resumption of licensing direct humanitarian charter flights to Cuba. Direct humanitarian flights under applicable agency regulations will make it easier for Cuban-Americans to visit family on the island, and for humanitarian organizations to provide needed assistance more expeditiously and at lower cost.
Second, establishing new licensing arrangements to permit Cuban-Americans and Cuban families living here in the United States to send humanitarian remittances to their families in Cuba at the level of $300 per quarter, as was permitted until August 1994. This will enable Cuban-Americans to provide direct support to close relatives in Cuba, while moving the current large flow of remittances back into legal, orderly channels.
Third, streamlining and expediting the issuance of licenses for the sale of medicines and medical supplies and equipment to Cuba. Based on experience of the past several years, including during the Papal visit, we believe that the end-use verification called for in the Cuban Democracy Act can be met through simplified arrangements.
The Departments of the Treasury, Commerce, and State are developing and will announce the new arrangements in these areas in the coming weeks.
As you can see from my review of these measures, we have not altered the fundamentals of U.S. policy toward Cuba. The measures are being taken using Treasury and Commerce licensing authorities and are fully consistent with the Cuban Democracy Act of 1992 and the Libertad Act of 1996.
What's Next?
What does the future hold for U.S. economic policy toward Cuba? The Castro regime is under more international pressure than ever before to respect human rights and implement democratic change, in part because of our multilateral initiative. We plan to keep up that pressure on the Cuban Government.
In January 1997, the President submitted to Congress and released publicly a major report entitled Support for a Democratic Transition in Cuba, as mandated by Title II of the Libertad Act. To develop the plan, an inter-agency team drew on lessons learned from assistance programs to Latin American countries and the former Communist countries of Eastern Europe.
The transition plan describes the many issues that will confront a democratic transition government in Cuba, and how the United States and other nations will be able to assist. The report indicates that a democratic transition government can expect to receive $4-6 billion in private assistance, loans, and grants from international financial institutions and other donors over a 6-year period following the establishment of a transition government. The report is an incentive to all those in Cuba who favor a democratic transition.
We have translated the report into Spanish, and over 10,000 copies have been distributed in Cuba. Radio Marti has described the plan to the Cuban people. The extent to which the Cuban Government fears the impact of this message was evident from the vitriolic propaganda offensive the Cuban Government launched against it. Castro required military officers to sign loyalty oaths specifically denouncing the transition report.
As we implement our Cuba policy, we must find creative ways to increase support for the Cuban people while maintaining pressure on the Cuban Government for fundamental, systemic change. We should strive to do that on the bipartisan basis that has characterized our Cuba policy for decades. In that way, we will maintain international leadership on this issue. And we will send a strong, effective message to the Cuban Government, the Cuban people, and the world. Thank you.
[end of document]
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