The U.S. and Cuba: A Thaw in Rhetoric, Not Trade


Amid diplomatic noises about warmer relations, prospects that Washington will lift its economic embargo against Havana remain distant

Cuba and the U.S. are speaking in a friendlier way toward one another than they have in decades, but a genuine breakthrough in trade may still lie far in the future, say analysts and Obama Administration officials.

President Barack Obama announced a modest liberalization of relations with Cuba—freer travel to the island nation for Cuban Americans, along with relaxed rules on remittances to relatives in Cuba, and permission for U.S. telecommunications companies to seek business there. But since those gestures almost precisely match campaign promises made last year by Obama, Cuban observers and foreign policy analysts sought more evidence that he intends broader licensing of U.S. business with the island nation.

Many skeptics seemed won over by an exchange of amiable one-upsmanship between Cuba and the U.S.

delegation to the Summit of the Americas over the weekend in Trinidad and Tobago. But the U.S. offered no further easing of trade policy and Larry Summers, director of the National Economic Council, seemed to pour cold water on any notion that Washington's 47-year-old embargo against Cuba could soon be lifted.

Summers' comments emphasize restraint

"That's way down the road and it's going to depend on what Cuba does going forward," Summers told NBC's Meet the Press news program Apr. 19. While Obama himself has stressed that he is waiting for a response in kind by Cuban President Raul Castro, Summers seemed intent on showing that the Administration is not going soft on the island, as some in the politically influential Cuban American community have suggested.

Summers said the Administration is open to thawing the long chill in economic relations between the countries, but only "on the basis of the steps that they choose to take,"—and those "they choose not to take—in terms of their policies in this hemisphere."

The flurry of comments included a speech by Obama in Mexico, followed by conciliatory remarks from Raul Castro, and then a warm response by Secretary of State Hillary Clinton. The mood seemed contagious—Obama and Venezuela leader Hugo Chavez beamed in a photograph taken in Trinidad and the U.S. leader also shook hands with Chavez's fellow regional critic of Washington, Bolivian President Evo Morales.

the U.S. debates while others trade

Carlos Gutierrez, Commerce Secretary under President George W. Bush and former Kellogg chairman, urged the Administration to maintain its cautious approach to Cuba. Gutierrez, who was born in Cuba, compared dealing with the island nation as something between a game of chicken and a game of chess. "I hope the Obama Administration understands this and thinks through every move—they are playing with masters," Gutierrez said in an e-mail exchange.

Anya Landau French, a Cuba expert at the Lexington Institute in Washington, said the U.S. will probably look for signs of cooperation on narcotics trafficking and migration between the countries before trade can ease further. However, French said, Obama has the power to go beyond the telecommunications opening by allowing the Cubans to pay for U.S. agricultural goods through direct wire transfers, rather than the current system of routing money through third countries.

Some U.S. business leaders have said that, even should the trade wall fall, American businesses will be mere latecomers because European, Canadian, and Latin American companies have done business in Cuba for years.

Julia Sweig, a Cuba expert at the Council on Foreign Relations, said this is only partly true. She said Europeans have managed only a few billion dollars in business deals with Cuba over the last several years and that "there is plenty" remaining in infrastructure, tourism, and agriculture.

LeVine is a correspondent in BusinessWeek's Washington bureau.

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