U.S.-Cuba relations: It’s a toss-up

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TrumpCUBA STANDARD — With Donald J. Trump moving into the White House on Jan. 20, the U.S.-Cuban normalization process begun by his predecessor is cast into doubt, possibly removing a keystone from Havana’s foreign policy and a driver of economic growth for the island.

The president-elect — who sent Trump Organization executives to Cuba in the 1990s to scout for business opportunities — has emitted mixed messages on Cuba during his campaign. In the primaries, he was the only Republican candidate (except Rand Paul) who openly supported rapprochement, despite the criticism of rivals such as U.S. Senators Ted Cruz and Marco Rubio. His preference of diplomacy is a view contrary to the Republican Party platform, which states that “the current Administration’s ‘opening to Cuba’ was a shameful accommodation to the demands of its tyrants. It will only strengthen their military dictatorship.” But in the crescendo of the last weeks of the campaign, he went from criticizing President Barack Obama’s normalization policy as a deal that needed some fixing, to threatening to roll back normalization unless Cuba makes political changes.

Cuban reactions

President Raúl Castro sent a short message congratulating Trump the day after the elections. His note was succinct: “On occasion of your election as President of the United States of America, I convey my congratulations”.

Although it was brief, the note was longer than the one sent by Peruvian President Pedro Pablo Kuczinski, which had only four words.

Trump’s aggressive campaign rhetoric may have revived some of Cuba’s fortress mentality and strengthened go-slow proponents on the island. On the morning after the Trump victory, official daily Granma ran a small news item about Trump’s victory. Above it, the leading front-page story is an announcement of the “Bastion 2016″ military maneuvers. Bastión is a five-day annual exercise usually held in November, aimed at expelling invaders.

Radio Reloj, a state-run radio station, sent a tweet at 2 a.m. on election night, declaring that “they shall not pass”.

“Cuba will continue its social and political project with Trump, Clinton, or any other representative of the empire. Here, for sure, they shall not pass,” the Radio Reloj tweet said.

No pasarán was a slogan used by Spain’s defenders of the Republic against fascist forces.

Official media reports have since explained how Hillary Clinton won the popular vote yet did not win the elections, and covered anti-Trump protests in the United States.

Blunt analysis by a retired Cuban diplomat

Meanwhile, Cuban diplomats shared on Facebook a blunt Trump analysis written by a retired member of Cuba’s diplomatic corps, Carlos Alzugaray. Among others, he points out how, “as a good demagogue”, Trump is now softening his rhetoric after winning.

“We will see him say things and then take them back, depending on the circumstances,” Alzugaray says. “So he will not govern in the same style he campaigned.”

“I suspect that those around him will try to make him govern more like a businessman, which he is, and are considering that this is more convenient for the interest of the dominant class. The latter indicates that his domestic and economic policies will not even waste a moment considering the subordinate classes. He will protect and favor first of all those at the top.”

He goes on saying that in his foreign policy, Trump “couldn’t care less” about democracy promotion abroad.

“In fact, it could be that he likes authoritarian governments, for example in case of Putin. Taking into account the popular rejection of new interventions, I don’t foresee a peculiar activism by Trump in regime change policies or for blunt power. That is not to say that he won’t accept that the state apparatus that dedicates itself to that move on autopilot, according to their established policies.”

He concludes pointing out that a Trump administration’s interest in Latin America will focus on stopping immigration, suggesting that he may be open to changing the Cuban Adjustment Law, which the Cuban government has long denounced (in an interview with the Tampa Bay Times days after the election, Trump called the law “unfair”).

“For Cuba, I think that he will not advance and freeze relations in their current state, although there will be the blockade (embargo), which he will probably be interested in changing if there are economic opportunities. Maybe he will be less aggressive in meddling policies because it simply isn’t among his priorities, despite the promises he may have made to the Cuban American ultra right-wing.”

Granma portada

Effects on Cuban economic prospects

While Cuba’s foreign policy can best be described as one of eclectic diversification — seeking as many political and economic partners as possible — U.S.-Cuba normalization and the promise of an end to the U.S. embargo have been key elements of an effort to ease the island’s dependency on crisis-stricken Venezuela. A major driver behind European and Asian investors’ raised interest in Cuba has been the anticipation of an onslaught of U.S. investments in the island. But this engine may stall now.

“For Cuba, it’s the same uncertainty as for the rest of the world,” said Pavel Vidal, a former Cuban central bank economist, in an email message to Cuba Standard. “Trump’s position on Cuba has shifted, and we don’t know what policy he will implement. In his last months in office, Obama has taken steps to ‘armor’ the new Cuba policy; the Cuban government should do the same: Take important steps to demonstrate that Cuba maintains its economic reform process and commitment to the international opening.”

One of these steps, Vidal suggests, could be a push towards membership in multilateral financial institutions such as the International Development Bank, World Bank, or International Monetary Fund.

“Even amid an economic recession, the country has made great sacrifices in terms of spending cuts to pay in time the renegotiated debt with the Paris Club,” Vidal said, referring to an agreement over old debt with creditor nations. “Fiscal spending and imports are contracting in real terms. Cuba is making a great effort to reorganize its international financial relations, and this is very positive for the credibility and financial stability of the country. Now is the time to pick the fruit of this sacrifice and make the steps towards a greater harvest, even more so now that uncertainty about Venezuela combines with uncertainty about U.S. policy.”

If Trump’s words and actions towards Mexico are an indicator, the island economy is in for a time of uneasy coexistence, at best. He hammered away during his campaign that he will renegotiate or even end NAFTA and charge Mexico for the construction of an anti-immigrant wall along the border. Not surprisingly, the Mexican peso during electoral night took its biggest dive since 1994, forcing the central bank president and finance minister to set in motion their contingency mechanisms. Yet Trump also sent a signal by reaching out to, and paying a very controversial visit, to Mexican President Enrique Peña Nieto amid the heated electoral campaign.

Short-term, long term objectives

But within that picture, there are opportunities. Because the Trump administration’s policy with Cuba will be more conditional, in the short term, therefore, all players should create as many regulatory changes and obtain as many licenses as they can before President Barack Obama hands the keys to the White House to his successor, urges John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council.

This is particularly the case for Marriott Hotels, whose hotel management agreements in Havana with armed-forces controlled companies may come under fire by Congress, he suggests.

“From 9 November 2016 through 12:00 pm on 20 January 2017, 72 days from now, the sole focus by members of the United States Congress, their supportive United States-based advocacy organizations, and the government of the Republic of Cuba should be upon seeking changes to regulations. Period,” Kavulich said in an email message the morning after election night. “The legislative pathway is deceased; it passed at 3:00 am this morning.”

In the longer term, there will be movement again in Congress in February 2018, the expected date Raúl Castro steps down, Kavulich believes.

Meanwhile, a spokesman for Maryland-based Marriott had this to say: “Given our roots in the Washington, DC region, Marriott has a long history of engaging with policymakers from both political parties, and we’ll continue that important dialogue. The outcome of the elections and the potential to impact our business depends on the Administration and Congress working together to govern, and it is too early to tell how those relationships will develop and which policies will surface as priorities. We remain focused on advancing our policy priorities to support our business and associates: comprehensive immigration reform, infrastructure investment, equality in the workplace, growing travel, protecting our ability to do business in Cuba, and adopting tax policies that strengthen the American economy.”

Anti-embargo, but driving a harder bargain

Newt Gingirch — Trump's top pick for secretary of state? Photo: Gage Skidmore

Newt Gingirch — Trump’s top pick for secretary of state? Photo: Gage Skidmore

Cuba will in all likelihood not be among Trump’s top foreign policy priorities, some observers believe, and little change from the status quo should be expected as the Republicans kept control of both the House and Senate.

However, Timothy Ashby, a senior official responsible for Cuba policy under Reagan and the elder Bush who has advised several presidential candidates, has a more optimistic view.

He describes Trump’s Cuba policy as “pro-business and anti-embargo, but driving a harder bargain in negotiations”. More importantly, he sees openings in the legislative realm.

“The U.S. Congress has been retained by Republicans, which means that it is far more likely to support his policies than if Hillary had won. Republicans like (Arizona Sen.) Jeff Flake and (Wyoming Sen.) Mike Enzi would have opposed Hillary even if they personally agreed with her on Cuba policy. Trump dislikes Rubio and Cruz, and they will have lost considerable influence. (Alabama) Sen. (Jeff) Sessions is a friend of Trump and supports ending the travel ban, which I expect to pass next year.”

Cuban American attitudes

Interestingly, even though Trump held some of his last campaign events in Miami and elsewhere in Florida, appealing to Cuban hardliners, Cuban American voters in Miami-Dade County apparently were not part of the Trump landslide. Miami-Dade voted 66% for Clinton and 57% for the opponent of Sen. Marco Rubio, a Cuban American hardliner.

“So don’t even try putting this on Cuban Americans or on Cuba policy,” said Ric Herrero, executive director of Miami-based CubaNow, which advocates normalization, in a Tweet.

“She won Miami-Dade by 1% less that Obama in 2012. Almost all Republicans in the county are Cuban-American. Cuba not a factor,” Herrero said in an earlier Tweet.

Trump, verbatim

In September 2015, The Daily Caller, a conservative Washington publication, asked Trump: “Do you think Obama’s rapprochement is good policy, or do you oppose America’s opening with Cuba?”  The candidate responded: “I think it’s fine, I think it’s fine, but we should have made a better deal. The concept of opening with Cuba — 50 years is enough — the concept of opening with Cuba is fine. I think we should have made a stronger deal.”

When asked to respond in writing to the question “Do you support President Obama’s move to lift the trade and travel embargo on Cuba?”, Trump responded, “Ultimately, it’s going to be good,” adding that the U.S. government could have “made a better deal” and wished the United States was better at negotiating.

Conditions for repealing the embargo

Trump is at odds with the Republican platform on ending the embargo, which calls “on the Congress to uphold current U.S. law setting conditions for the lifting of sanctions on the island: Legalization of political parties, an independent media, and free and fair internationally-supervised elections.” Trump is a pragmatist and believes that unrestricted commercial relations with Cuba are the best way to promote free enterprise and a better standard of living for the Cuban people. Although personally a non-smoker and teetotaler, Trump favors allowing U.S. imports of Cuban rum, cigars and other agricultural products, and thinks that U.S. hotel and real estate developers should not be restricted from investing in Cuba when foreign companies are profiting from the growing volume of American visitors to the island.  Trump Organization executives have visited Cuba to consider future golf course and hotel sites, and the candidate himself said he would be interested in opening a hotel there “at the right time, when we’re allowed to do it,” and that “Cuba would be a good opportunity ….”

Claims

Trump favors a settlement of both sides’ claims, but is concerned that any deal brokered with Cuba would lead the United States to get “sued for $400 billion or $1 trillion.” He is known to favor a “business approach” to claims settlement, stating “We don’t want to get sued after the deal is made …. I do agree something should take place. After 50 years, it’s enough time, folks. But we have to make a good deal and get rid of all the litigation that’s going to happen.”

Radio and TV Martí

In the past, Trump has agreed with conservative Republican Sen. Jeff Flake that the $700 million of taxpayers’ dollars spent on Radio and TV Martí broadcasts is wasteful and should be stopped.

Guantánamo

The president-elect has said he wants to use the Guantánamo Naval Base as a bargaining chip in negotiations with Cuba, suggesting that the United States should “get them to take it over,” thereby saving $40 million a month. Although during the primaries he advocated “keeping it open and loading it up with bad dudes,” as president he would probably turn the U.S. naval station into a free zone for Cuban and foreign entrepreneurs, making best use of the new high-speed fiber optic internet cable connection to Florida, which cost $40 million.

The Cuban Adjustment Act

One of the few policies on which Trump and Marco Rubio jointly disagree with their Party is the Cuban Adjustment Act, the program dating from the Lyndon Johnson administration that enables Cuban immigrants to get welfare benefits from the moment they set foot on U.S. soil.  Both politicians want to see the legislation repealed.

In an interview with the Tampa Bay Times on Nov. 11, Trump said that allowing Cuban immigrants legal access to the U.S under the Adjustment Act is wrong.

“Donald Trump may be many things, but he’s neither an ideologue nor a fool. On Cuba policy, Trump is more aligned with the majority of Republicans than with the Republican establishment that drafted the party platform. He and his policy team are aware that 56% of Republican voters recently surveyed by the Pew Research Center favored Obama’s Cuba policy, and 59% supported doing away with the embargo,” writes Timothy Ashby.

The Trump Organization and Cuba

One close observer believes that Trump’s interest to do business in Cuba — while on ice through at least 2020 — will outlive his presidency.

“It has been well documented by Bloomberg News and Newsweek that the Trump Organization has been to Cuba for many trips and many years exploring the possibilities,” says Antonio Zamora, a Miami-based lawyer who advises clients on doing business with Cuba. “Now that he will be the president, he will remove himself from any decisions, and the management of the organization will fall to his children. Renewing their interest in Cuba and to pursue those interests will have to wait a while. Personally, I think that their interest will prevail.”

—Elsy Fors in Havana contributed to this report; parts were taken from a column by Dr. Timothy Ashby that appeared in Cuba Standard in July

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