The Business Logic Driving Cuba-U.S. Rapprochement

If nothing else, the United States and Cuba stand to earn plenty of cash with a future end to sanctions feeding booms of American exports, Cuban tourism and infrastructure development.

In Havana, a long ride ahead
In Havana, a long ride ahead
Francisco de Zarate


There is a legend that when President John F. Kennedy had to sign the Cuban blockade law on Feb. 7, 1962, he waited a couple of hours, which gave an aide enough time to legally deliver to him 1,000 Cuban cigars he had ordered shortly before.

This week's stunning announcement of renewed relations between the two neighboring nations was made by President Barack Obama, a Democrat and the 11th U.S. President since Kennedy signed the blockade into force. Henceforth if an Obama aide were to visit Cuba he or she could bring back $100 worth of cigars and alcohol, and up to $400 total in products bought in Cuba.

While tourism to Cuba remains unauthorized, visiting the island on government business is one of the 12 items now allowed. In addition, the hypothetical aide sent on a mission to get his or her boss some cigars, could pay for them with a U.S. credit or debit card, which was hitherto, absolutely forbidden. And if that aide happened to know somebody in Havana who needed money, he or she could wire them more cash than before, from $500 per quarter to $2,000.

What has not changed since the Dec. 17 announcement is the United States' overall importance as a Cuban trading partner. In spite of the blockade, the United States was already today was the fifth biggest exporter of products to Cuba. Rice, wheat, corn and soya are the main export products to Cuba, paid for in cash and under special provisions. The CIA's figures indicate that 4.3% of all products entering Cuba are from the U.S., respectively after Venezuela (38%), China (11%), Spain (9%) and Brazil (5%).

Spanish headstart

To these special provisions allowing for trade in farming products, President Obama is now allowing sales of telecommunication equipment intended to improve Internet services in Cuba. For now, while everyone believes the recent announcements to be but a first step in dismantling the blockade, a general ban on the sale of U.S. products to Cuba, and vice-versa, remains in force.

Port of Havana. Photo: Giam

Before the victory of the 1959 revolution in Cuba, tourism was the first word that came to Americans' minds when they thought of Cuba. If the blockade is lifted, the most plausible estimates are putting the number of U.S. citizens visiting Cuba every year at around five million. In dollar terms, that represents revenues of some $8 billion annually.

Spain has been ahead of the game here for two decades. With the fall of the Soviet bloc, Cuba began looking for investors and trading partners in its former motherland, which never cut ties during 50 years of communist rule in Cuba or decades of conservative government under General Franco.

The top investor has turned out to be the Spanish-based Melía chain, with 27 hotels on the island. It was threatened with penalties in 1999 pursuant to the Helms-Burton Act, which expanded to non U.S. firms its ban on doing business with Cuba.

The European Commission resolved the quarrel two years after taking a firm stance and insisting it would not accept U.S. intervention in the business of EU firms. The tone of its language, not to mention the terms and vocabulary, may soon sound as outdated as the words Cold War themselves.

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"The Truest Hypocrisy" - The Russia-NATO Clash Seen From Moscow

Russia has decided to cut off relations with the Western military alliance. But Moscow says it was NATO who really wanted the break based on its own internal rationale.

NATO chief Stoltenberg and Russian Foregin Minister Lavrov

Russian Foreign Ministry/TASS via ZUMA
Pavel Tarasenko and Sergei Strokan

MOSCOW — The Russian Foreign Ministry's announcement that the country's permanent representation to NATO would be shut down for an indefinite period is a major development. But from Moscow's viewpoint, there was little alternative

These measures were taken in response to the decision of NATO on Oct. 6 to cut the number of personnel allowed in the Russian mission to the Western alliance by half. NATO Secretary-General Jens Stoltenberg said the removal of accreditations was from eight employees of the Russian mission to NATO who were identified as undeclared employees of Russian intelligence." We have seen an increase in Russian malicious activity for some time now," Stoltenberg said.

The Russian Foreign Ministry called NATO's expulsion of Russian personnel a "ridiculous stunt," and Stoltenberg's words "the truest hypocrisy."

In announcing the complete shutdown in diplomacy between Moscow and NATO, the Russian Foreign Ministry added: "The 'Russian threat' is being hyped in strengthen the alliance's internal unity and create the appearance of its 'relevance' in modern geopolitical conditions."

The number of Russian diplomatic missions in Brussels has been reduced twice unilaterally by NATO in 2015 and 2018 - after the alliance's decision of April 1, 2014 to suspend all practical civilian and military cooperation between Russia and NATO in the wake of Russia's annexation of Crimea. Diplomats' access to the alliance headquarters and communications with its international secretariat was restricted, military contacts have frozen.

Yet the new closure of all diplomatic contacts is a perilous new low. Kommersant sources said that the changes will affect the military liaison mission of the North Atlantic alliance in Moscow, aimed at promoting the expansion of the dialogue between Russia and NATO. However, in recent years there has been no de facto cooperation. And now, as Foreign Minister Sergey Lavrov has announced, the activities of the military liaison mission will be suspended. The accreditation of its personnel will be canceled on November 1.

NATO told RIA Novosti news service on Monday that it regretted Moscow's move. Meanwhile, among Western countries, Germany was the first to respond. "It would complicate the already difficult situation in which we are now and prolong the "ice age," German Foreign Minister Heiko Maas told reporters.

"Lavrov said on Monday, commenting on the present and future of relations between Moscow and the North Atlantic Alliance, "If this is the case, then we see no great need to continue pretending that any changes will be possible in the foreseeable future because NATO has already announced that such changes are impossible.

The suspension of activities of the Russian Permanent Mission to NATO, as well as the military liaison and information mission in Russia, means that Moscow and Brussels have decided to "draw a final line under the partnership relations of previous decades," explained Andrei Kortunov, director-general of the Russian Council on Foreign Affairs, "These relations began to form in the 1990s, opening channels for cooperation between the sides … but they have continued to steadily deteriorate over recent years."

Kortunov believes the current rupture was promoted by Brussels. "A new strategy for NATO is being prepared, which will be adopted at the next summit of the alliance, and the previous partnership with Russia does not fit into its concept anymore."

The existence and expansion of NATO after the end of the Cold War was the main reason for the destruction of the whole complex of relations between Russia and the West. Today, Russia is paying particular attention to marking red lines related to the further steps of Ukraine's integration into NATO. Vladimir Putin's spokesman Dmitry Peskov previously stated this, warning that in response to the alliance's activity in the Ukrainian direction, Moscow would take "active steps" to ensure its security.

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