The trade embargo placed by the United States on Cuba involves financial, economic and commercial restrictions that were first placed on Fidel Castro’s government in 1962. It was as a result of the government expropriation of assets and properties of US nationals and corporations. The embargo was first suggested and implemented by president Kennedy’s government on the charge that there was lack of democracy in Cuba not only in respect to the Cuban nationals but also to other nationals.
In essence, the embargo restricted certain economic and financial transactions between the nationals of the two countries whether directly or indirectly in regard to the use of a third country or national of such a country. The embargo started with the introduction of an import quota on sugar imported from Cuba by several millions. This was met by an agreement by the Soviet Union to by the rest of the sugar from Cuba. Still, the Cuban government under the leadership of Fidel Castro continued to take further actions on businesses owned by American national, confiscating most of it.
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The US government retaliated by expanding the trade restrictions even further especially because of the alignment of Cuba with the Soviet Union in the cold war which caused the Cuban missile crisis. Later, the US government imposed travel restrictions to its nationals restricting them from traveling to Cuba. Further down the line, the US government charged the Cuban government of hosting Soviet Union nuclear weapons and since the union was an enemy in the cold war, regulations were put in place to freeze any Cuban assets in the states and to further consolidate the restrictions put on the country.
Various restrictions has since been put in place which include restriction on the amount of money spent by a US national on the Cuban island, restrictions on the forms and amount of gifts that a US national can give to a relative in Cuba or a Cuban national among others. Furthermore, the US government restricted any company that is involved in trade activities in Cuba from entering the US economy on the argument that such a company would be trafficking assets from US to Cuba. To date, most of the trade restrictions placed on Cuba and expenditure restrictions placed on US nationals and corporations still stand.
Despite efforts by some of the activists and United Nations has been meeting a dead end with previous and current presidents of the US suspending bills and efforts aimed at lifting the embargo. Despite the fact that some valid reasons were used in basing the embargo and the fact that the US government and its nationals are not affected much by the Embargo, the effects of it are not only affecting the unintended but also affecting the US economy in ways which were unintended. Efforts by activists and the UN are still unsuccessful despite the dire consequences that the embargo has had.
In essence, while today the embargo is much founded on democracy issues in Cuba, it goes a step further to restrain the achievement of democracy in the country, punishing Cuban citizens as opposed to the Administration. The purpose of the paper is to expound on the benefits that can be achieved by lifting the embargo not only to Cuba but also to the US and its citizens in general. Why the Embargo should be lifted As observed earlier, various efforts to lift the restrictions on Cuba and American travelers have continuously been rejected both by the President and the congress.
On the contrary, the US government has eased a little following pressure from some of the activists. For example, agribusiness organizations and American farmers put the government under pressure to lift some of the restrictions which saw the allowance of sale of medicine and agricultural goods only for humanitarian reasons. Still, many of the restrictions still are in place and there exist no evidence that these restrictions will be lifted any time soon. In light with the embargo, Cubans and scholars have argued that the embargo has and still is affecting negatively the resources of the Cuban nationals as opposed to those of the government.
This raises many humanitarian issues in regard to the US government especially considering that the embargo was as a result of democracy issues in Cuba. It has been argued and it is true to a greater extent that the economic damage that arises as a result of the embargo is to some extent responsible for the problems associated with transportation and food shortage in Cuba. As argued by some governments and activist, the embargo has had dire effects on medicine supplies, food and other economic needs of Cubans.
This by extension has resulted in vulnerability in infectious diseases and epidemics including malnutrition. The restrictions also have negatively affected the flow of medical information in the country thus resulting to diseases that would otherwise be easily dealt with. The rationing system that results as a result of food shortage have greatly affected men and the elderly since designed to give preference to women and children. On another view, the embargo has greatly influenced the capacity of US investors in Cuba but more so have affected non American investors in Cuba.
In this context, investors who have interests in the US economy have been reluctant or have been restricted by the law from investing in Cuba. As such, the embargo is not only affecting the Cuban and the American nationals but also the nationals of other countries as well. Moreover, it has continuously threatened diplomatic relationship of US and other countries in regard to the dealings and transactions of these countries and Cuba. In any case, while the embargo gives the Cuban government a scapegoat for problems not directly associated with the embargo, it gives a head start for non US businesses in Cuba should it be lifted.
In this regard, these businesses have already established firm foundations to be shaken by the competition that would arise from the lifting of the trade embargo. In general, while the embargo is aimed at improving the democracy and the compliance with human rights, it has continuously affected these rights negatively making it non humanitarian itself. It is worth noting that it an inadequate reason for the US government to argue that it is involved in charity work aimed at giving medical and food supplies to Cubans.
On the other hand, the bureaucracy involved in this charity work has greatly affected its effectiveness in Cuba. Charity organizations and other non governmental organizations have faced delays as a result of the licensing process involved and transportation problems. It also represent a violation of international law as provided for by the United Nations Charter. In this context, the fact that the embargo directly condemns the sale of certain food products and medical products abuses the human right of accessing life saving medical supplies.
Further Arguments As it stands out, the trade embargo imposed by US government hinders free trade between the two countries. While the US government is highly dependent on home production, it does not mean that it has a comparative advantage on all it consumables thus it is forced to import some of it consumables from other countries. This implies that there is an existence of free trade between US and these other countries. One of the major advantages of free trade is that it promotes liberalization of the economies involved.
As such, by maintaining the trade embargo on Cuba, the US is denying the Cuban economy better grounds for liberalization. In essence, the Cuban economy can not be open to American investors nor is it open to non US investors who have interests in both countries. In this context, the US economy is and continues to lose the advantages that are associated with the liberalization of the Cuban economy just like any other economy. In fact, it would be irrational to argue that the economy of Cuba has little to offer to that of US.
On the other hand, Cuba has been famous of having a comparative advantage on sugar production. It is imperative that the US economy can obtain such goods from other economies but the question remain, how cheap would it attain them from the Cuban economy. A good example is the tourist potential of Cuba. Travel restrictions have greatly affected the realization of benefits in Cuban tourist industry as the US government restricts its nationals in visiting the island and in the maximum amount of dollars that can be spent on the island on any given day.
Moreover, free trade allows the manifestation and improvement of diplomatic relationship between the countries involved. While the problem in Cuba is a political one, trade embargo does not help in solving other problems in the country especially social and humanitarian’s one. It has over and over been argued that as opposed to a trade embargo, the problems in Cuba can only be solved by changing the communist political organization in the country. In light with these, the US government should first lift the embargo then embark on measures that are aimed at filling the loopholes in the Cuban political system.
In any case, the embargo like others placed on other countries such as Iraq will only give the Cuban administration a reason to cling further to it political system. While, the US government restrict the provision of certain services to Cubans as was evident in the situation where the US government stressed Starwood hotels to chase away Cuban delegate who had attended the US- Cuba Trade Association, the Cuban government is also justified to retaliate in any way they think will bring equality. Such retaliation will only worsen further the diplomatic relationship between the two countries.
Still, free trade helps in increasing the amount of foreign currency held by a given economy. With the reduction of economic aid by the soviet, Cuba has been experiencing may economic problems most of which is as a result of lack of foreign currency to service debts secured from Asian countries. As a result, the living standards of Cuban nationals have greatly depreciated. In this context, it is a fallacy for the US government to argue that all the humanitarian problems in Cuba are as a result of bad governance.
In essence, the US governments and it allies whether countries, corporations or individuals have greatly contributed to the decline in humanitarian welfare in Cuba. By placing sanctions on allies dealing with Cuba and by closing it economy from Cuba, the US government denies Cuba a chance to earn foreign currency and by extension impacts heavily on the livelihood of Cubans. Perhaps the most obvious advantage of free trade is that it increases the living standard of the nationals of the two respective economies.
In this regard, free trade increases the availability of a variety of goods and services to the populations of the two countries. For one, the population has a variety of quality products to choose from and secondly, these products are available at a cheaper price keeping in mind the concept of comparative advantage. Buying these products a cheaper price will increase the real purchasing power of the constituents of the population giving them the capability to save and invest in other areas of the economy.
It would therefore be worthy to the Cuban nationals if the US government lifts the embargo as this will help in not only reducing their dependence on other economies through charity works but it would also improve their living standards. Since the US government and economy is highly involved in charity work to help Cubans, the lifting of the ban would also go a long way in helping the economy to develop given the nature and the cost of the resources used for charity work. Another advantage of free trade is that it helps in improving the infrastructure of both countries and this is inclusive of both transport and communication.
While the US trade embargo on Cuba can be seen as restricting the movements of goods and services, restrictions have been put in place which restricts the docking of Cuban ships on American docks. Similarly, there have been travel restrictions especially in regard to US citizens. In light with the restrictions and with the poor diplomatic relationship between the two countries, the infrastructures of the two countries have suffered though not in direct terms. For example, flights operating between the two countries have been rerouted as no of the country want the other to intrude in her air space.
Situations as these have increased the cost of transport between the two countries and have even hindered the movement of goods and services especially for Cuba since it has to use long routes to import goods thus a high cost of importation. Such a poor infrastructure has also been accused of harboring poor flow of medical information into Cuba and by extension increasing the persistency of epidemics and diseases in the country. Free trade encourages the increase in the level of investment opportunities between the respective countries while at the same time increasing foreign direct investments.
This on the other hand helps in raising the living standards of the population of the two countries. Should the government lift the trade embargo, investment opportunities will sprout in the two countries. As a result, even if the US does not directly participate in investing in the Cuban economy, other multinational companies will seek investment opportunities in the country. In essence, those allies of US who have been reluctant to invest in the country will reconsider their stand. Moreover, the multinational companies in Cuba will also seek investment opportunities not only in the American economy but also in the economies of its allies.
This will earn foreign currency for all the participating countries but more so will help in raising the living standards of Cuban nationals. As evidence has shown, the confiscation of Cuban assets including money held in banks, the government is only further aggregating the problem as the Cuban government is bound to take equal measures of counter attack and this can only add up to a web of tit for tat game. In addition to the above, free trade is also important in that it helps in increasing employment opportunities in the respective countries.
As is the case with the living standards, creation of employment opportunities is integrated with other factors such investment and specialization. As stated earlier, free trade creates investment opportunities which by extension create employment opportunities while at the same time improving the living standards of the nationals. In addition, free trade increases the economies of scale which means more investment and earnings from the existing investments. This will also help in creating employment opportunities for the citizens of the two countries.
In this light, it would be more advantages if the US government considers the probability of lifting the embargo as this would benefit not only the economy of Cuba but also its own economy. It would help in raising the living standards of Cubans thus reducing the level of poverty and dependence in the country. Finally, free trade helps in the harmonization of labor policies between the two countries thus offering cheap and affordable labor term. On top of this, free trade allows increased mobility of factors of production.
As stated earlier, the fact that the US economy is capable in producing most of its consumables does not necessarily mean that it has a comparative advantage in production of all of them. If the embargo is lifted, the US economy will be able to expand its base in relation to factors of production thus improving on the productivity of its economy. With the advantage arising from the geographical positions of the two countries, the US economy is capable of importing factors of production from Cuba at a lower cost and in time thus increasing productivity in its industries.
Goods can also be exported to Cuba not just for charity work but also for earning foreign currency. Conclusion As is evident following the above discussion, it is evident that the US by placing the embargo on Cuba, the US government has denied the Cuban economy to grow and by extension, it has denied Cubans the opportunity of enjoying a high standard of living. While the argument still remains that the embargo is aimed at improving the democracy in Cuba, it should be known to the US government that this has only resulted to more humanitarian problems than there was before the embargo.
It is therefore important for the US government to accept the fact that what is needed in Cuba as opposed to trade embargos is to change the whole political system. As such, the US government should lift the ban and look for other economic and political ways of influencing Cuba. Reference: Arnson Cynthia, 1993. Crossroads: Congress, the President and Central America, 1976-1993. Pennsylvania, Pennsylvania State University Press, pp. 17 Bhaqwati Jaqdish, 2002. Free Trade Today. United States, Princeton University Press, pp.
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