After more than 50 years, President Obama announced on Wednesday that the United States is reestablishing full diplomatic relations with Cuba, declaring an end to the United States’ “outdated approach” to the communist country and vowing to “cut loose the shackles of the past.” As Obama spoke to Americans, Cuban President Raul Castro addressed his own nation from Havana. Castro said that, while the two countries still have profound differences in areas such as human rights and foreign policy, they must learn “the art of living together in a civilized manner.” Presidents Obama and Castro spoke by phone on Tuesday, the first time the presidents of the two nations have spoken since the 1959 Cuban Revolution.
“The National Chicken Council and our members support the concept of free and fair trade. If the updated policy has the effect of boosting Cuba’s private sector, and therefore the wealth of its citizens, high quality protein is usually the first to increase in demand. Because of our proximity, we would welcome the opportunity to provide more of our safe, wholesome and high quality poultry to the Cuban people,” NCC said in a statement.
The president’s announcement followed more than a year of secret talks between the United States and Cuba, including clandestine meetings in Canada and the Vatican and personal involvement from Pope Francis. As a result of these talks, Cuba released American Alan Gross, who had been imprisoned in Cuba for five years and a Cuban who had spied for the United States. In exchange, three Cubans jailed in Florida were released by the United States.
Key elements of the policy shift include the re-opening of the U.S. Embassy in Havana and easing restrictions on travel to Cuba, including family visits, official U.S. government business, and educational activities. However, tourist travel remains banned. The amount of money anyone in the United States will be allowed to send to Cuban nationals, except certain government or communist party officials, will increase from $500 to $2,000 per quarter. Licensed American travelers to Cuba can return home with up to $400 of merchandise, including tobacco and alcohol. Any Cuban cigars brought to the United States must be for personal use only and not for resale.
In addition, U.S. institutions will be allowed to open accounts at Cuban financial firms to help process authorized transactions. The plan will also authorize the commercial export of communications items that will increase the Cubans ability to communicate with the rest of the world. Also, Secretary of State John Kerry has been charged with reviewing Cuba’s designation as a state sponsor of terrorism and must report back to the president within six months.
The president’s executive action does not fundamentally change the game as he does not have the authority to fully lift the long-standing U.S. economic embargo on Cuba–only Congress can do that. The Cuban embargo and the Cuban government itself remain formidable obstacles for U.S. products and financial transactions. Experts also see the Obama administration’s action as fairly limited in the context of overall U.S. exports, which amounted to about $2.3 trillion in goods and services in 2013. U.S. exports of goods and services to Cuba, in contrast, stood at about $358 million total last year.
Cuba is heavily reliant on food imports, so American farmers may be in the best position to gain from the changes. U.S. agricultural exports have been allowed since 2001, but financial red tape caused them to lose ground to competitors such as Brazil, Thailand, and China. The new policy is expected to make it easier for American farmers to get access to a $1 billion-plus market opportunity.
It is expected that U.S. exporters will have an easier time exporting chicken, corn, lumber, and other products, and with the limit on remittances to Cuban nationals set to increase, many Cubans will have more cash to buy them. In addition, the new financial policy allows U.S. agricultural exporters to forgo a longstanding requirement that Cuban companies pay cash in advance for food shipments, usually through a bank in a third company. And, U.S. financial institutions will be allowed to set up correspondent accounts with Cuban banks, meaning money could be easily wired to the U.S. company’s account even after the cargo in unloaded Havana’s port.
Leading Republicans, including Speaker John A Boehner (R-OH) and the incoming Senate Majority Leader Mitch McConnell (R-KY), quickly characterized the president’s actions involving Cuba as appeasement of the hemisphere’s leading dictatorship.
Republican lawmakers, who will take control of the Senate as well as the House next month, made clear they would resist lifting the 54-year-old trade embargo. “The entire policy shift announced today is based on an illusion, on a lie, the lie and the illusion that more commerce and access to money and goods will translate to political freedom of the Cuban people,” said Senator Marco Rubio (R-FL), a son of Cuban immigrants. “All this is going to do is give the Castro regime, which controls every aspect of Cuban life, the opportunity to manipulate these changes to perpetuate itself in power.”
A leading Democrat agreed. Senator Robert Menendez (D-NJ), the outgoing chairman of the Foreign Relations Committee and a Cuban-American, said “it is a fallacy that Cuba will reform just because the American president believes that, if he extends his hand in peace, that the Castro brothers suddenly will unclench their fists,” Menendez said. The president’s policy faces backlash from the anti-Castro lobby as well, which has some bipartisan support in Congress.
