Case study u.s.-cuban trade : when does a cold war strategy become a cold war relic

Presented by:Ankur Gupta

Aishwarya Singh

Honey Shukla

Deepti Tripathi

Case facts

The U.S. Embargo of Cuba is the longest and harshest embargo

by one state against another in modern history

Following Castro’s overthrow of the Batista government in

1959 and threats to incite revolutions in Latin America, U.S.

cancelled its trade agreement to buy Cuban sugar.

Spurred by the collapse of communism more than thirty years

later, Congress passed the Cuban Democracy Act in 1992 and

the Helms-Burton Act in 1996, both of which tightened the

noose for firms that attempted to do business with a Castro

government.

Although many countries had initially supported the embargo,

by 2001 some 150 nations had normal trade relations with

Cuba

While many people feel that repealing the embargo would

help many U.S. industries and firms, others maintain that

Cuban market opportunities are extremely limited. Others feel

that the Cuban embargo is an unfortunate cold war relic and

question the politics of U.S. policy.

QUESTION -1

Should the U.S. seek to tighten its economic

grip on Cuba? If so, why?

Answer-1

Now, The US govt. should not seek to tighten the economic

grip on Cuba because business with Cuba will help many US

companies to generate revenue.

Lifting the embargo will give approx $1.2 million per year

from agricultural exports.

Potential gains for tourism & transportation companies

Moreover, It is the longest embargo on Cuba by US Which is

not relevant in today’s time.

In addition, Cuba’s expropriation of American property

without compensation is internationally recognized as

unacceptable behavior; thus, retaliation can be seen as an

appropriate response.

QUESTION -2

Should the U.S. normalize business relations

with Cuba? If so, should the U.S. stipulate any

conditions?

Answer-2

Yes, U.S. should normalize business relations with Cuba.

Reasons:

Cuba has long military threat, and there is hope that closer

political relations with the United States (and the rest of the

free world) will lead to greater democracy in Cuba.

Cuban trade sanctions are far tougher than those levied by the

United States against Iran, Iraq, Libya, and North Korea.

Economically, U.S. firms are losing out on opportunities to sell

their products in Cuba to competitors from other countries.

U.S. should stipulate following conditions:

While progress in the area of human rights may be slow,

experience in other countries suggests that imposing some

human rights conditions may be effective in the long-run.

In addition, the U.S. government may wish to facilitate the

return to Cuba of U.S. companies whose properties were

expropriated, even though any remaining assets are likely in a

state of serious disrepair.

QUESTION -3

Assume you are Fidel Castro. What kind of trade

relationship with the United States would be in your

best interest? What type would you be willing to

accept?

Answer-3

Being a leader i would want a trade relationship that would

contribute to the economic development of the economy.

Initial overtures from the U.S. government could help to

improve the political position and would be welcomed as a

way to begin negotiations.

Economic development assistance could come in the form of

foreign direct investment

QUESTION -4

How do the structure and relationships of the

American political system influence the existence and

specification of the trade embargo?

Answer-4

The structure and relationships of the American political

system serve to reinforce the existence and specification of the

Cuban trade embargo.

Pro-embargo supporters relentlessly lobby the U.S. Congress

and presidential administration to tighten the embargo in order

to spur the collapse of Cuban communism.

Although recently diminished, the pro-embargo viewpoint is

supported by key people in key positions throughout the

government.