PROPOSED CUBAN LEGISLATIONAlexander F. Watson
Assistant Secretary of State for Inter-American Affairs House Western Hemisphere Subcommittee
16 March 1995
ECONOMIC CHANGE IN CUBASince 1993, the regime has taken some tentative steps toward economic reform, such as establishing agricultural and industrial craft markets, legalizing the dollar and permitting limited self-employment. These economic changes, which are inadequate but still steps in the right direction, are being introduced grudgingly because the regime has no other choice. Moreover, the economic measures implemented thus far have been carefully limited to preserve the regime's control over the population. Some reforms, however, such as agricultural markets and small-scale self-employment, have given the Cuban people a small taste of market incentives and constitute positive steps. Much broader and deeper measures will be required if the Cuban economy is to move definitively toward a genuine free market system. For example, farmers must still meet state quotas before they may sell "excess" produce at the new agricultural markets. Self-employment is still tightly controlled and is not available to professionals. Investment opportunities offered to foreigners are off-limits to Cubans because Castro fears the rise of an independent business community. The state supplies labor to foreign firms in return for hard currency, while only a fraction of these payments goes to the Cuban worker. Cubans will next be forced to watch foreigners buy up luxury condominiums while they are barred from owning even the dilapidated housing in which they live.
THE CUBAN DEMOCRACY ACTMr. Chairman, we support the goal of the Cuban Democracy Act (CDA) which is the promotion of a peaceful transition to democracy on the island. The CDA guides our policy, which is to maintain firm pressure on the Cuban Government for peaceful change by denying legitimacy and resources to the Castro regime through tough economic sanctions (what we call Track One), while reaching around the regime to the Cuban people through humanitarian donations and enhanced communications (Track Two). To augment the 33-year U.S. comprehensive economic embargo on Cuba, the CDA added further restrictions on shipping and on trade by U.S. subsidiaries abroad with Cuba. During Castro's migration challenge to the U.S. last summer, the President imposed additional restrictions on remittances and transactions related to travel to Cuba. 1e strongly believe that the embargo is the best leverage we have to promote change in Cuba, and that it is working. Those who claim that it is ineffective fail to understand that only since 1989, when the Soviet Union's $6 billion annual subsidy to the Cuban economy ended, has the embargo's real impact been felt. At the same time that the Castro regime has had to contend with the loss of these subsidies, it has been denied the windfall that U.S. trade, investment and tourism would provide. While the inherent inefficiencies of Cuba's socialist economy alone would be enough to bring about the system's eventual economic collapse, a large influx of hard currency from the U.S. could allow the regime to resist change and stay afloat for years longer. Because of the embargo, Castro faces stark choices now. The changes he has authorized, while they have been carefully limited to preserve the regime's political control, are steps in the right direction, and would almost certainly not have been undertaken without the added pressure the embargo applies. The embargo must remain in place until we see the kind of meaningful, far-reaching reform contemplated in the CDA. Mr. Chairman, while we have kept the pressure on the regime, we have been reaching out to the Cuban people through a variety of Track Two initiatives outlined in the CDA. These efforts are designed to break the Cuban regime's monopoly on communication with the Cuban people, and let ordinary Cubans know that we stand with them in their struggle. Since 1992, we have licensed almost $65 million in private humanitarian donations through non-governmental organizations, making the American people the most generous source of such assistance to the Cuban people during this period. (We have been pleased to note that the European Union has also adopted a strategy of channeling its humanitarian assistance through NGOs.) Another example of our Track Two initiatives has been the conclusion of private U.S. telecommunications agreements -- after successfully resisting attempts by the Cuban government to levy an exorbitant surcharge on operator-assisted calls -- that have greatly improved telecommunications, including phone, fax and e-mail, between Cubans and Americans. Other key elements of Track Two include increased book donations to Cuban institutions, travel to Cuba for clearly defined humanitarian, human rights, research and journalistic purposes, and of course the essential broadcasts of Radio and TV Marti. The Administration strongly believes that Track Two contacts undermine Castro's disinformation about U.S. intentions toward Cuba, one of the linchpins of his regime. These efforts to reach out to ordinary Cubans are an essential complement to Track One pressures and will help hasten the island's democratic transition.
THE CUBAN LIBERTY AND DEMOCRATIC SOLIDARITY BILLMr. Chairman, the Administration welcomes Congress' interest in furthering our common objective of promoting a rapid, peaceful transition to democracy in Cuba. An interagency team is conducting an extensive review of the Cuban Liberty and Democratic Solidarity Bill, and will produce recommendations for consideration by senior administration officials. we have almost finished examining the provisions of this complex bill, and look forward to meeting with you or your staff when we have completed our review. We support many of the objectives of the bill, and stand ready to work with the Congress to make enforcement of the embargo more effective, to accelerate planning for assistance to the Cuban people under a transition or democratic government and to protect the property interests of Americans abroad. However, we believe that, as currently drafted, some of the bill's provisions might have consequences which could impede our ability to further our shared goals of promoting a rapid, peaceful transition to democracy. We must also ensure that the bill's provisions do not have major adverse effects on broader U.S. interests. In addition, several of 1he bill's provisions could require significant increases in resources for implementation. We support the bill's efforts to ensure Russia's trade with Cuba is conducted strictly on market terms. We also share the bill's goal of increasing the effectiveness of TV Marti. USIA Director Joe Duffey has already authorized efforts to initiate UHF broadcasting. The difficulty TV Marti has in reaching its target audience is not due to any shortcoming on its part, but rather to the Cuban regime's determination to isolate its people from the outside world through an expensive program of electronic jamming. Moreover, both Radio and TV Marti can play a key role in transmitting timely, credible and calming information during crises in Cuba. While we share the objective of promoting third country support of our Cuba policy, we are concerned that some provisions of the bill may compromise some of our broader national security objectives. Provisions of the bill which would require the President to withhold an amount equal to the assistance and credits Russia provides to Cuba in return for the use of the Lourdes signal intelligence facility could limit our ability to promote reform and stability in Russia. In addition, pressing Russia to cease its use of Lourdes could be seen by the Russians as interfering with their exercise of their right under the START treaty to monitor compliance with the agreement, and could complicate Russian ratification of START II -- a treaty which our own Congress is now moving to ratify because of its strategic importance. We are seriously concerned about whether provisions barring the entry of sugar from third countries which import Cuban sugar would be consistent with U.S. obligations under the World Trade organization and the North American Free Trade Agreement. Such provisions might also seen as a secondary boycott similar to the Arab boycott of Israel, which the United States has long and vigorously opposed. Mr. Chairman, we agree wholeheartedly with the aim of the bill's section on assistance to a transition or a democratic Cuban government. We believe in the wisdom both of planning now for the day when democratic change comes at last to Cuba, and of making clear to the Cuban people the kind of supportive role the United States is prepared to play after a transition to democracy has begun. I note that Rep. Menendez has pursued this goal for some time, including through a constructive piece of legislation introduced during the last session. We welcome the bill's approach of authorizing assistance for a broad range of activities to promote rapid progress from a transition government to a fully democratic one. These provisions remove many of the concerns that we had with the legislation last year. However, we believe the bill must provide the President with sufficient flexibility to determine when a transition or democratic government is in place in what could be rapidly changing circumstances, and precisely what mix of assistance and other benefits the U.S. should provide. We are also concerned that a number of other provisions in the bill, as currently drafted, appear to infringe on the President's constitutional responsibilities for the conduct of foreign relations. We share the bill's commitment to protect the interests of U.S. citizens and entities whose property abroad was expropriated without compensation, including in Cuba, and have made clear to third country governments and businesses the risks of purchasing these properties. Resolution of these claims will be a high priority once Cuba's inevitable transition to democracy begins. Last month we re-transmitted our "buyer beware" cable to all diplomatic posts to press these points. we are concerned, however, about provisions of the bill that would impose a series of sweeping and mandatory sanctions and restrictions in connection with transactions involving properties not only in Cuba, but around the world, where the claim to that property is now owned by an American citizen. These sanctions would have serious resource implications for enforcing agencies. 1uch sanctions would need, under our international trade obligations, to apply to U.S. and foreign companies without discrimination. Some of these provisions would cause disputes with our allies and could be difficult to defend under international law. We believe that we might together be able to develop mechanisms that will achieve our shared goals in a manner more consistent with international law. Several other provisions of the bill could also require significant new resources for implementation, which could be problematic in this period of budget stringency. In addition, other provisions raise issues that we would like to address with the Committees. The provision to encourage the creation of an OAS special emergency fund for Cuba, for example, has technical problems that require correction. Mr. Chairman, we believe that most of the concerns we have identified can be resolved through consultation. I am certain that members of the committee, like us, will be interested in balancing our desire to do as much as possible to promote peaceful, democratic change in Cuba with our international commitments and other critical national interests abroad. We would be happy to meet with sponsors of the proposed legislation at their convenience to discuss the Cuban Liberty and Democratic Solidarity Act. We expect to continue the bipartisan cooperation on Cuba policy that the Cuban Democracy Act has embodied, and that we have pursued with the Congress over the past two years.
|Join the GlobalSecurity.org mailing list|