Tags: obama | cuba

Ahead of Cuba Visit, Obama Makes Sweeping Trade and Travel Changes

Tuesday, 15 March 2016 03:59 PM

The United States unveiled sweeping new measures on Tuesday to make it far easier for Americans to visit Cuba and for the island's Communist government to conduct long-restricted international trade, as President Barack Obama prepared for a historic trip to Havana next week.

Rolling out some of the biggest changes since Obama announced his opening to Cuba in December 2014, his administration loosened limits on the use of U.S. dollars in Cuba trade, removing a huge obstacle to Havana's access to the global banking system.

U.S. officials expressed hope that relaxation of travel and financial rules, which further chips away at decades-old sanctions against America's former Cold War foe, will spur Cuban leaders to respond with economic reforms that have been slow to come.

Obama's critics have accused him of giving up too much in return for too little from Cuban President Raul Castro and of now taking a premature "victory lap" with his March 20-22 visit to the island, the first by a U.S. president in 88 years.

The new rules will allow Americans to travel to Cuba independently for educational, cultural and other purposes by "self-certifying" that their travel is authorized, rather than having to go in organized group tours.

That measure opens new cracks in a longstanding U.S. ban on general tourism to the island and comes just as U.S. airlines will be allowed to restore scheduled service to Cuba, which will greatly increase the ability of Americans to visit the once-forbidden island.

With the opening to Cuba, U.S. travel to Cuba soared 77 percent to 161,000 visitors in 2015, according to Cuban government data, even though Americans going there must fit 12 officially authorized categories. U.S. officials say travel rose around 50 percent, a discrepancy explained by Americans illicitly traveling to Cuba as tourists through third countries.

The latest changes could also pave the way for American big-league baseball teams to eventually sign Cuban players without them having to defect.

Cubans can now earn a salary or compensation in the United States without having to renounce their Cuban citizenship, which could open the door to Cuban entertainers as well as the island's widely admired pool of baseball talent.

"It certainly does address the ability of Cuban athletes who can earn salaries in the United States to do so," said Ben Rhodes, Obama's deputy national security adviser and a key architect of his Cuba policy.

Major League Baseball has asked the U.S. government for special permission to sign Cuban players in Cuba. The new regulation could offer de facto approval of such signings but the Cuban government would still have to be satisfied it was being properly compensated for developing the players. There could be hurdles related to tax payments.



The new rules are the latest in the Democratic president's use of executive powers to sidestep the Republican-controlled Congress, which has so far resisted Obama's call to lift Washington's more than five-decade-old economic embargo on Cuba.

Republican U.S. Representative Mark Meadows said the administration was giving too many unearned concessions to Cuba's leadership, which has kept a tight grip on the island's state-run economy and one-party political system.

"It's like asking someone to clean up their act, they don't clean it up, and we still reward them," he said.

Obama leaves office in January and his goal is to advance his Cuba opening to the point that it cannot be reversed by the next president, especially should it be a Republican.

Since Obama and Castro announced detente, the two countries have restored diplomatic relations and opened embassies in Havana and Washington. The Obama administration has also unilaterally introduced several packages of rules-easing measures that have aimed to benefit Cuba's small but growing private sector but have also permitted U.S. telecoms to reach deals with the Cuban state.

U.S. officials have repeatedly stated that building Cuba's private enterprise will help ordinary Cubans and serve U.S. interests.

The rules announced on Tuesday now aim to promote Cuba's opening to the world economy by removing a host of restrictions on the use of the U.S. dollar.

For example U.S. banks can now participate in so-called U-turn transactions, in which dollar payments can pass through a U.S. bank as long as the two parties on either end of the deal are non-U.S. entities.

Lawyers and longtime Cuba-watchers were trying to determine what if any limits remained on Cuba's use of the dollar.

"We are making it easier for the Cuban economy to open up to the global economy," Rhodes said. "We believe that provides important incentives for the Cuban government to continue to evolve its own economic model."

The limits on Cuba's ability to complete transactions in dollars add a foreign exchange expense to most of Cuba's trade. The restrictions have also long been a complaint of businesses and financial institutions from third countries, which were forced to spend time and resources on "compliance," or determining if their transactions with Cuba might subject them to U.S. sanctions.

"The new regulations make a huge difference to Cuban foreign trade ... further opening the Cuban economy to the world," said said William LeoGrande, a leading Cuba expert at American University in Washington.

© 2020 Thomson/Reuters. All rights reserved.

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The United States unveiled sweeping new measures on Tuesday to make it far easier for Americans to visit Cuba and for the island's Communist government to conduct long-restricted international trade, as President Barack Obama prepared for a historic trip to Havana next...
obama, cuba
Tuesday, 15 March 2016 03:59 PM
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