By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends much of her time in Asia and is currently researching a book about textile artisans. She also writes regularly about legal, political economy, and regulatory topics for various consulting clients and publications, as well as scribbles occasional travel pieces for The National.
By now, regular readers should be familiar with Trump’s drill. First off, there’s a splashy announcement of a policy change: this time, it’s rolling back his predecessor’s Cuba initiative. This change is often made by a legally dubious executive order, or in a speech, or in some other non-binding form– certainly not by initiating– let alone completing– the often messy legislative process.
And then, when the dust is settled and the rhetoric is parsed, the mooted changes end up signifying– well, while I may not go quite as far as the Bard, but I will say: no mucho.
Announced Trump Changes
So, first off, what has Trump done?
On Friday, Trump made a speech in Miami to an audience of Cuban exiles, Remarks by President Trump on the Policy of the United States Towards Cuba.
The takeaway from that speech were policy changes Trump announced that reversed his predecessor’s detente policy first launched in 2014, and cemented during a presidential visit to the island in 2016. From the White House’s June 16 Fact Sheet on Cuba Policy :
- The new policy channels economic activities away from the Cuban military monopoly, Grupo de Administración Empresarial (GAESA), including most travel-related transactions, while allowing American individuals and entities to develop economic ties to the private, small business sector in Cuba….
- The policy enhances travel restrictions to better enforce the statutory ban on United States tourism to Cuba. Among other changes, travel for non-academic educational purposes will be limited to group travel. The self-directed, individual travel permitted by the Obama administration will be prohibited. Cuban-Americans will be able to continue to visit their family in Cuba and send them remittances.
Most significantly, “the policy reaffirms the United States statutory embargo of Cuba and opposes calls in the United Nations and other international forums for its termination. The policy also mandates regular reporting on Cuba’s progress—if any—toward greater political and economic freedom” (as per the Fact Sheet). The goal is to force Cuba to address human rights abuses, release political prisoners, hold free and fair elections, legalize political parties, and in general, open its society, as reported in this Wall Street Journal account, Trump Announces Rollback of Obama’s Cuba Policy.
Trump’s new policy leaves the US Embassy in Havana open.
Impact on Cuban Politics
What does this mean? Well, first off, some accounts suggest that the Tump policy will backfire, and instead of improving protection for human rights and promoting Cuban policy and leadership changes that the US might applaud, has actually “dismayed moderates who were working with pro-engagement Americans but now fear association with a policy of open hostility toward the communist system could make them targets for repression”, as reported in this New York Times account, Tougher Trump Line Toward Cuba Delights Hardliners on Island.
Continuing with that NYT account:
“Trump’s become the independent business people’s new enemy because — even though he’s said he wants to help entrepreneurs — this new policy alienates entrepreneurs from the government,” said Angel Rodriguez, a 27-year-old sociologist who works with the Catholic Church in entrepreneurship-training programs. “That could bring them under fire now, and they could find themselves much weaker.”
Trump’s new policy retains key aspects of Obama’s reforms, leaving full embassies in Washington and Havana and letting U.S. cruise and airlines continue service to Cuba, although it will make travel harder by requiring most Americans to come in groups and banning payments to military-linked businesses.
Nor does the mainstream of US business seem exactly to be on board with the Trump changes. Permit me to again from the Wall Street Journal account cited above:
“Unfortunately, today’s moves actually limit the possibility for positive change on the island and risk ceding growth opportunities to other countries that, frankly, may not share America’s interest in a free and democratic Cuba that respects human rights,” said Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce.
What Else Changes?
To elaborate, as with respect to hotels, travel will be directed away from GAESA properties, but will also hurt operations such as Air BnB, which, according to the Wall Street Journal account cited above, has been a major beneficiary of the previous US policy relaxation.
The Washington Post goes so far as to suggest, With shift on Cuba, Trump could undercut his company’s hotel-industry rivals, that if and when fully implemented, last week’s announced policy shift might harm competitors to Trump businesses. For the moment, I’m loath to credit that claim fully, absent undertaking my own research– which I have not done for purposes of this short post. Given the general hysteria surrounding putative conflicts of interest between Trump policy and Trump businesses, I will only say that alleged conflicts of interest should be taken with a grain of salt, absent close evaluation of further evidence.
Now, I also want to suggest, that even with respect to travel for US passport holders, the actual impact may not be less than appears. The rollback certainly doesn’t make things much more difficult than the status quo before the 2014 changes– which even then, allowed various educational, cultural, familial, and group exceptions to the US travel ban. And going forward, this recent article, for example, from the San Francisco Chronicle, Cuba travel policy may favor the well-heeled tourist, suggests that affluent tourists will still easily be able to visit Cuba. As will, for that matter, will family visitors. Furthermore, before any changes can take affect, both the Treasury and Commerce Departments must commence rule-making procedures within 30 days after last week’s announcement. Policy changes won’t take effect until these regulations are finalized, a process even the White House estimates may take several months. So until that process is completed, the exact impact of mooted policy changes will remain unclear.
I also want to mention another reason the changes may have even less impact than at first it may seem. A recent MarketWatch piece, Why American tourists don’t want to travel to Cuba, suggests that after an initial flurry, there’s been a drop-off in the interest of US tourists in Cuban travel, largely due to its lagging infrastructure. Sad as I am to see this– I’ve always wanted to visit Cuba and am not sure I want to pony up for an expensive group tour, as that’s far from my preferred mode of travel– it seems from that even if the agencies interpret Trump’s rhetoric strictly, US passport holders will still be able to visit Cuba, on much the same terms that have prevailed for the last several decades.
The Wall Street Journal account cited above also suggests that travel to Cuba hasn’t quite met the expected demand:
Scheduled air service between the U.S. and Cuba resumed last summer for the first time in 50 years. Cuba attracted a record 4 million foreign- visitor arrivals last year, up 13% from 2015, according to the Cuban government. While Canadians remained the largest group, Cuban Americans and other U.S. visitors numbered 614,000, up 34% from the prior year. But supply outstripped demand, and three U.S. airlines quit the market this year.
So if the expected interest of American tourists has yet to match expectations, and indeed, has fallen off, will the announced Trump tigthening actually change much at all?
I’m going to go out on a limb here. And I suggest that at least with respect to this policy, Trump’s proving himself adept at hammering rhetoric that promises one thing– particularly to a set of supporters– while the actual policy changes he announces, let alone ultimately manages to implement– whether or not we believe in them– don’t amount to all that much. Does that sound familiar?