Embargo's impact slight, report says Cuba's trade

Published Friday 16, 2001, in the Miami Herald

Embargo's impact slight, report says Cuba's trade seen as limited by own politics

WASHINGTON -- U.S. sanctions on Cuba have cost Americans less than $1 billion a year in exports and have had a similarly minimal impact on the communist island, according to the most comprehensive federal study ever of the embargo's impact.

The International Trade Commission report, sent Thursday to the House Ways and Means Committee but not released publicly, could provide fodder to those on both sides of the debate over lifting the 39-year-old trade embargo. An executive summary was obtained by the Associated Press.

Supporters of the embargo can say the report boosts their argument that U.S. businesses are losing relatively few trade opportunities because of the sanctions and that lifting the sanctions would do little to boost Cuba's weak economy and poor living conditions.

``U.S. economic sanctions with respect to Cuba generally had a minimal overall historical impact'' on the Cuban and U.S. economies, it said.

Even without sanctions, Cuba's own policies would limit trade, the analysts said.

``Cuba . . . tends to select its trade and investment partners based on political considerations -- the desire to maintain economic ties with existing partners and to avoid becoming economically dependent on a single country -- rather than economic cost factors,'' the report said.

But opponents can point to specific instances where the sanctions have cost the United States trade opportunities -- most notably rice, where U.S. export losses have been ``significant.''

RICE IMPORTS

The sanctions cost U.S. rice growers what had been their leading market from 1955-58. Without sanctions, U.S. rice imports could have increased by 3 percent to 5 percent a year, the report said.

And the study noted that an estimated 1 million U.S. tourists would visit Cuba each year if the sanctions were lifted -- which could benefit U.S. travel businesses that book the trips, along with the Cuban economy.

Overall, the report estimates the United States would have gained $652 million to $990 million a year in exports if the sanctions had been lifted. Cuba would have gained $84 million to $167 million a year.

In contrast, U.S. companies export more than four times that amount with the Dominican Republic, a smaller Caribbean country.

EXILE REACTION

``I think the ITC basically established what we've been saying all along, which is that there's a minimal impact on U.S. business of the sanctions,'' said Dennis Hays, executive vice president of the Cuban-American National Foundation.

The study by the independent, nonpartisan agency is believed to be the first objective attempt by the U.S. government to study the economic effects of sanctions imposed by President John F. Kennedy to pressure democratic changes in Fidel Castro's communist Cuba.

Pressure has slowly grown in Congress to lift the sanctions, with some farm-state Republicans joining liberal Democrats in arguing that sanctions are ineffective and have hurt both Cubans and Americans. But President Bush has said he favors maintaining the sanctions.

TOOK NO SIDES

The study did not make a recommendation about whether the embargo should be continued.

Sen. Max Baucus, D-Mont., who last year unsuccessfully proposed easing the sanctions, plans to offer a similar proposal again this year.

``U.S. policy-makers need to take a long hard look at our policy -- one that is more than 10 years out of date,'' Baucus spokesman Michael Siegel said. ``It only serves to hurt the Cuban people and punish U.S. businesses and it should be repealed.''

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, said the study's conclusions on the embargo's impact can be viewed from different perspectives: from those who looking at the sanctions' effect on the two nations' economies and those who consider how individual businesses may be affected.

``For some it's not significant. For others it will be and they'll both have a legitimate point,'' he said.

Copyright 2001 the Miami Herald.
Republished here with the permission of the Miami Herald. No further republication or redistribution is permitted without the written approval of The Miami Herald.