Trump may seek more punishment of Cuba
- Written by William M. LeoGrande, Professor of Government, American University School of Public Affairs
President Donald Trump may soon do a huge favor for Cuba’s wealthy, upper-class exiles, many of whom are now U.S. citizens living in Miami.
Some of them still dream[1] of recouping their lost fortunes in Cuba, and Trump may try to make that possible.
Much of that wealthy upper class went into exile in Miami in the 1960s, when the Cuban revolution turned to socialism and Fidel Castro’s government nationalized their businesses and confiscated[2] their property.
More than 20 years ago, Congress passed a sanctions law that included a provision to help these Cuban exiles who are now U.S. citizens. The provision would allow them to sue in U.S. courts[3] companies that operate using property that the exiles lost in the 1959 revolution.
The lawsuit provision, known as Title III, was put on hold because it triggered immense opposition[4] from U.S. allies, whose companies operating in Cuba would become targets of litigation in U.S. courts.
If Trump activates the provision, it could reignite that opposition, complicating already rocky relations with Mexico, Canada, the European Union – and obviously Cuba – at a time when the U.S. needs their help[5] to deal with the crisis in Venezuela.
As a scholar of U.S. relations with Latin America[6], especially Cuba, I’ve closely followed the Trump administration’s growing antagonism toward Havana. But activating Title III would represent a quantum leap in hostility.
Triggering new sanctions
The people who stand to benefit from activating this law are Cuba’s pre-revolutionary rich – what was once Cuba’s “One Percent.”[7]
They arrived in the U.S. expecting Washington to quickly overthrow Fidel Castro and restore their power, property and privilege. Instead, the revolutionary government survived and by the 1990s was attracting foreign direct investment[8] from Canada, Europe and Latin America.
In 1996, Sen. Jesse Helms, R-N.C., and Rep. Dan Burton, R-Ind., sponsored the Cuban Liberty and Democratic Solidarity Act[9]. It passed after anti-Cuba sentiment in the U.S. was galvanized when the Cuban Air Force shot down two civilian planes piloted by Cuban-Americans[10].
Cuban women who fled their country in an Immigration Service room in Jacksonville, Fla., while arrangements are made to grant them political asylum in the U.S., Jan. 1, 1959.
AP
Title III[11] of the law specifically targeted foreign investors in Cuba.
It gave naturalized Cuban Americans permission to sue in U.S. federal court anyone “trafficking” in (that is, using or profiting from) property[12] the exiles lost in the 1959 revolution, when they were Cuban citizens.
Normally, U.S. courts have no jurisdiction over property owned by non-citizens that is nationalized by a foreign government. For U.S. courts to sit in judgment of another government’s actions towards its own citizens would be a challenge to that government’s sovereignty.
Since virtually all property in pre-revolutionary Cuba was privately held, the foreign companies operating there, including many that also do business in the U.S., fear being accused of profiting[13] from confiscated property and getting caught up in Title III lawsuits.
Consequently, U.S. allies bitterly opposed the law as illegal U.S. interference in their commerce with Cuba.
The European Union filed a complaint[14] against the U.S. with the World Trade Organization in 1996 and adopted a statute prohibiting EU members and their companies from complying with Title III. Mexico, Canada[15] and the United Kingdom[16] passed similar legislation.
In response, President Bill Clinton suspended[17] Title III of the act for six months, which the law allowed. The suspension has to be renewed every six months. Since then, every president, Democrat and Republican, has renewed the suspension. Donald Trump has already renewed it three times.
But recently, there have been indications that the longtime practice of suspending Title III’s provisions may end soon.
In November 2018, National Security Adviser John Bolton threatened to activate Title III[18], saying, “This time, we’ll give it a very serious review.” In January, Secretary of State Mike Pompeo announced[19] a short 45-day suspension while the administration studied the issue.
The president has until the end of February to notify Congress if he decides to extend the suspension. Otherwise, Title III takes effect automatically.
Sen. Marco Rubio, R-Fla., at a Miami event in 2017 where President Trump announced the revised policy against Cuba.
AP/Lynne Sladky[20]
Politics in command
According to The New Yorker[21] magazine, Trump gave White House staff paltry guidance on Cuba policy at the beginning of his administration.
“Make Rubio happy,” he told them.
Sen. Marco Rubio[22], R-Fla., and Rep. Mario Díaz-Balart[23], R-Fla, are the principal advocates for Title III[24]. They are Cuban-Americans who represent the oldest, most conservative and wealthiest segment of the Miami Cuban community. From their mansions in Miami, that elite still wields disproportionate influence over U.S. policy through these legislators.
Most Cuban-Americans will gain nothing from Title III. It exempts private residences from compensation. So, if an exile’s main asset was their home, they are out of luck.
The provision also exempts businesses worth less than US$50,000 in 1959 [25] – $433,000 today, adjusted for inflation. The exiled owners of thousands of small mom-and-pop shops nationalized in 1968[26] are out of luck, too.
Still, a 1996 State Department analysis[27] estimated that Title III could flood U.S. federal courts with as many as 200,000 lawsuits, creating a legal morass that would take years to sort out.
In the meantime, most U.S. firms and some foreign ones would likely hesitate to enter[28] into commercial relations with Cuba for fear of becoming litigation targets in the United States. That’s a major purpose of Title III – to stymie Cuba’s economic development.
Cuban American families have already voiced claims for the port of Havana[29] and José Martí International Airport[30], putting cruise ship companies and airlines on notice that they could face potential legal jeopardy over their use of these properties.
The Bacardi company’s Cuban assets, including this headquarters in Havana, were seized by the government and its founders exiled in the 1960s.
REUTERS/Stringer[31]
If these companies pull out of the Cuban market, Americans would still have a right to travel to Cuba, but no way to get there.
If Title III reduces foreign investment in Cuba, it will damage Cuba’s already fragile economy[32], which in turn would hurt the standard of living of ordinary Cubans.
In retaliation, Havana might well stop buying agricultural goods from U.S. farmers. That’s a market of over $250 million[33] annually that American farmers can ill afford to lose when exports are down due to Trump’s trade wars[34].
Trump believes[35] he won Florida in 2016 because of the Cuban-American vote, and he thinks Rubio can deliver it again in 2020.
I think Trump is miscalculating.
The remnants of Cuba’s pre-revolutionary “One Percent” no longer represent the Cuban-American community as a whole. By decisive majorities, Cuban-Americans support[36] free travel between the U.S. and Cuba, broader commercial ties and President Obama’s decision to normalize relations. Every year, they send $3 billion[37] to family on the island, and hundreds of thousands of them travel there to visit.
Those Cuban-American voters may not want to inflict more economic pain on ordinary Cubans, including their friends and family. Come 2020, they may punish a president who does.
References
- ^ still dream (www.miamiherald.com)
- ^ nationalized their businesses and confiscated (www.britannica.com)
- ^ provision would allow them to sue in U.S. courts (www.mcclatchydc.com)
- ^ put on hold because it triggered immense opposition (www.everycrsreport.com)
- ^ their help (www.nytimes.com)
- ^ scholar of U.S. relations with Latin America (www.american.edu)
- ^ Cuba’s “One Percent.” (www.pbs.org)
- ^ 1990s was attracting foreign direct investment (repositorio.cepal.org)
- ^ Cuban Liberty and Democratic Solidarity Act (www.treasury.gov)
- ^ Cuban Air Force shot down two civilian planes piloted by Cuban-Americans (www.cnn.com)
- ^ Title III (www.reuters.com)
- ^ sue in U.S. federal court anyone “trafficking” in (that is, using or profiting from) property (www.law.cornell.edu)
- ^ being accused of profiting (www.reuters.com)
- ^ filed a complaint (www.wsj.com)
- ^ Mexico, Canada (www.nytimes.com)
- ^ United Kingdom (www.legislation.gov.uk)
- ^ Bill Clinton suspended (www.nytimes.com)
- ^ Bolton threatened to activate Title III (www.miamiherald.com)
- ^ Pompeo announced (www.washingtonpost.com)
- ^ AP/Lynne Sladky (www.apimages.com)
- ^ The New Yorker (www.newyorker.com)
- ^ Marco Rubio (www.elnuevoherald.com)
- ^ Mario Díaz-Balart (www.reuters.com)
- ^ the principal advocates for Title III (www.mcclatchydc.com)
- ^ exempts businesses worth less than US$50,000 in 1959 (cubantriangle.blogspot.com)
- ^ small mom-and-pop shops nationalized in 1968 (havanatimes.org)
- ^ State Department analysis (crsreports.congress.gov)
- ^ hesitate to enter (money.usnews.com)
- ^ port of Havana (www.miamiherald.com)
- ^ José Martí International Airport (www.tampabay.com)
- ^ REUTERS/Stringer (pictures.reuters.com)
- ^ fragile economy (www.reuters.com)
- ^ $250 million (ustr.gov)
- ^ trade wars (www.politico.com)
- ^ Trump believes (www.miaminewtimes.com)
- ^ Cuban-Americans support (cri.fiu.edu)
- ^ $3 billion (www.nytimes.com)
Authors: William M. LeoGrande, Professor of Government, American University School of Public Affairs
Read more http://theconversation.com/trump-may-seek-more-punishment-of-cuba-111947
