5045502202_1d867c8a41_z.jpgCuban Reset 

Feliz Cumple, D17

By Lawrence Gutman

It’s difficult to believe only one year has passed since the announcement of re-engagement between the U.S. and Cuba. When Presidents Obama and Castro made their surprise announcements of renewed bilateral diplomacy last December, the dialogue between Washington and Havana was just emerging from over 50 years of virtual slumber and back channeling. While significant political and regulatory obstacles remain on both sides of the Florida Straits, a new era of diplomatic engagement and economic integration is clearly afoot. On the first anniversary of December 17, 2014, or “D17” as it’s known in Cuba, significant progress toward reconciliation has been achieved.

In spite of a deeply fraught relationship burdened by the defining regional and ideological conflicts of the 20th century, a framework for political and commercial normalization is rapidly taking shape. It was heartening, if somewhat unsurprising, that Andrew Cuomo, the Democratic governor of New York, led the first trade mission by a sitting U.S. governor to Cuba in April. Even more significant in political terms, however, is the recent trade delegation to the island led by Texas Governor Greg Abbott, a conservative Republican. Indeed, members of the GOP, long the bête noir of rapprochement, are increasingly warming toward détente. Arizona Republican Sen. Jeff Flake is one of the most forceful advocates of President Obama’s policy toward Cuba. Today marks the creation of a bipartisan Cuba working group in the House of Representatives, “to draw attention to how reforms in the U.S. and Cuba are opening new opportunities for commercial, diplomatic and people-to-people relationships.” As we enter the second year of the reset process, Republican opposition to the U.S. trade embargo has never been stronger.

There are worse ways to conclude a year’s worth of reconciliation, and the fact that Gov. Abbott avoided accusations from his party of cozying up to the Castros is a testament to how uncontroversial normalized trade with Cuba has become. Furthermore, the fact that a Cuba-related question has not been posed in a single presidential debate thus far further underscores the extent to which one of the most contentious issues in U.S. foreign policy has become uncontroversial. Even staunchly pro-embargo (and Cuban-American) candidates like Sen. Marco Rubio and Sen. Ted Cruz refrain from injecting Cuba into their debate strategies. An issue that recently drove some of the most contentious and poisonous fights in U.S. foreign affairs now appears to be wholly passé on the campaign trail.

Diplomatic objectives that until recently seemed unthinkable now seem wholly unremarkable. Cuba freed dissidents as a condition of normalized diplomacy (though Havana’s human rights record has not materially improved in the last year). The U.S. significantly relaxed restrictions on travel to the island and removed all limits of cash remittances. The State Department removed Cuba from its list of state sponsors of terror, paving the way for transactions with U.S. banks. Flags were raised over embassies in both countries. Presidents Obama and Castro conducted a face-to-face meeting at the United Nations General Assembly. The visit of Pope Francis to Cuba before the U.N. meeting granted the imprimatur of the first Latin American pontiff to the reconciliation process. Bilateral agreements on environmental preservation and maritime security are facilitating government engagement beyond the Council of State and the Departments of State and Commerce, and are bringing additional government agencies and actors into the fold.

U.S. and Cuban officials are now publicly acknowledging ongoing talks regarding the resolution of claims over expropriated properties and the economic burden of the embargo. As one of the thorniest and most divisive aspects in U.S.-Cuban relations since the 1960s, the question of how to resolve property disputes has loomed like a black cloud over the prospect of reconciliation. Yet the talks are unfolding and both governments appear perfectly content to acknowledge them.  This, in and of itself, may be enough to envision a resolution emerging in the not so distant future.

The private sector has certainly responded with enthusiasm to these developments. At the Economist’s Cuba Summit held in Washington D.C. in early December, representatives from Cargill, Akerman LLP, Airbnb, Caterpillar, JetBlue, and Stonegate Bank expressed their commitment to normalized trade. The Engage Cuba Coalition, a bipartisan public policy organization dedicated to mobilizing support for the embargo’s repeal, currently boasts support from Procter & Gamble, Viacom, Honeywell, NBCUniversal/Comcast, among others.

None of these companies seem to be paying a price for their endorsement of bilateral trade. Certainly, the prospect of U.S. capital expansion into Cuban markets has piqued the interest of foreign investors around the globe. The fact that potential investors beyond the tourist sector are voicing their support suggests that large-scale U.S. investment will reach far beyond tourism and enable the growth of a diversified Cuban economy.

As public polling in the U.S. and Cuba over the past year makes plain, majority support for trade now exists in all sectors of both countries. U.S. travelers are arriving on the island in increasing numbers – a 50 percent increase in the last year – and a majority of Cubans believe expanded U.S. tourism will benefit their country. They will no doubt be excited to hear that Washington and Havana just reached an agreement to resume U.S. commercial flights to the island.

The key question for Havana moving forward will be how to engage with U.S. capital as opportunities for economic integration present themselves with greater frequency. While the need for cash in the wake of Venezuela’s decline as an economic patron played a key role in the détente process, Cuban officials remain concerned about large-scale U.S. investment and its potential to upend the achievements of the 1959 Revolution. Netflix entered Cuba with Havana’s permission, but Cuban officials demurred on overtures from Google to upgrade the island’s digital infrastructure. The question of how to engage with foreign investment as new markets take shape will directly impact the timetable for structural reforms with uncertain short-term consequences.

The scope of those reforms will become increasingly visible during year two of the reset process, and the achievements of the past 12 months suggest a new set of historic milestones lie on the horizon. Will President Obama visit Havana before his term ends in 2017? Judging by the progress made since D17, the prospect seems increasingly likely. That alone is reason to celebrate.



Lawrence Gutman has conducted research on governance and foreign investment in Cuba as a Fulbright Hays Fellow and Tinker Foundation Fellow. He holds an M.A. in Latin American history from the University of Texas at Austin, and is based in New York. He tweets @lawrencegutman.

[Photo Courtesy of Flickr]

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