Obama measures on Cuba trade, travel poke new holes in embargo – Reuters


WASHINGTON (Reuters) – The United States rolled out a sweeping set of measures on Thursday to significantly ease sanctions on Cuba, opening up the country to expanded U.S. travel, trade and financial activities.

Defying hardline critics in Congress, President Barack Obama made good on his commitment last month to loosen restrictions on dealings with the communist-ruled island as part of a historic effort to end decades of hostility.

The 54-year-old U.S. embargo on Cuba will remain in place – only Congress can lift it.

But the package of rules issued by the Treasury and Commerce Departments, which come into effect on Friday, will allow U.S. exports of telecommunications, agricultural and construction equipment, permit expanded travel by Americans to the island and open banking relations.

It was the first tangible U.S. step to implement the economic changes Obama pledged on Dec. 17 when he and Cuban President Raul Castro announced plans to restore diplomatic relations between the old Cold War foes.

“Today’s announcement takes us one step closer to replacing out-of-date policies that were not working and puts in place a policy that helps promote political and economic freedom for the Cuban people,” said U.S. Treasury Secretary Jacob Lew.

While Castro has welcomed last month’s deal, he has made clear that Havana does not intend to abandon single-party rule or the state-controlled economy. Congressional critics of Obama’s shift say that Washington should not be rewarding Cuba.

The new regulations, which fleshed out details of the policy changes announced in December, will allow Americans to travel to Cuba for any of a dozen specific reasons, including family visits, education and religion, without first obtaining a special license from the U.S. government as was previously the case.

Although general tourism will still be banned, those U.S. travelers who do visit will be allow bring home small amounts of the Cuban cigars that are highly rated by aficionados.

It will also be easier for U.S. companies to export mobile phone devices and software as well as to provide Internet services in Cuba. U.S. airlines will be permitted to expand flights to the Caribbean island.

In an expansion of remittances allowed, Americans will now be able to send up to $8,000 to Cuba a year, up from the $2,000 previously permitted, and bring $10,000 with them when they travel to the country. They will also be able to use credit and debit cards in Cuba.

In addition, there will be a change in the definition of “cash in advance” payment required by Cuban buyers, which could help a variety of business interests, most notably U.S. agriculture, in gaining greater access to Cuban markets.

The announcement was made after the Obama administration said on Monday that Cuba had fulfilled its promise to free 53 political prisoners as agreed with the U.S. government. It also comes a week before high-level U.S.-Cuba talks in Havana aimed at normalizing ties, including discussions on the timing of reopening embassies.

‘SIGNIFICANT STEP’

Obama’s spokesman, Josh Earnest, called it a “significant step” in delivering on Obama’s new Cuba strategy. The president declared last month that decades of trying to force change by isolating the island had not worked.

But Republican Senator Marco Rubio, a Cuban-American and forceful critic of the policy shift, called the announcement “a windfall for the Castro regime that will be used to fund its repression against Cubans, as well as its activities against U.S. national interests.”

While Obama is using executive powers to poke holes in trade barriers with Cuba, Republicans who control Congress have made clear they will not let him entirely dismantle the embargo. Washington imposed economic sanctions on Cuba as Fidel Castro steered the island along a socialist path that made it a close ally of the Soviet Union, and severed diplomatic ties in 1961.

U.S. officials made clear the new measures do not mean that Cuba is now open for business, stressing that while investments in Cuba’s limited array of small businesses are permitted, general investment will still be prohibited.

And while telecommunications firms will be permitted to export devices, any U.S. company still has to reach an agreement with the Cuban government, which controls all imports and maintains a firm grip on Internet access.

Reaction from the U.S. business community, which had pressed the administration to open up Cuban markets, was mostly positive but tempered with caution.

“The regulations were welcome and they went even farther than was articulated in the president’s announcement,” said Jake Colvin, vice president at the National Foreign Trade Council. “But now it will depend on the reality on the ground in Cuba.”

There was no immediate official reaction from Havana, but some ordinary Cubans welcomed the changes.

“If more Americans can come here, that means more customers, and this will be good for the economy,” said Orlando Veliz, a cook for a private restaurant in Havana.

(Additional reporting by Dan Trotta in Havana and Patricia Zengerle in Washington; Writing by Matt Spetalnick; Editing by Doina Chiacu and Frances Kerry)

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