Blockade Harms U.S. More Than Cuba

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By Margot Pepper
Wednesday February 18, 2009

The U.S. blockade is causing more economic damage to the United States than it is to Cuba. A December letter signed by a dozen leading U.S. business organizations, including the U.S. Chamber of Commerce, urged then President-elect Barack Obama to initiate the process of scrapping the 47-year old embargo. The letter pegs the cost to the US economy at $1.2 billion per year, an estimate made by the International Trade Commission in 2001. More recent sources put the projected 2009 loss at $3.6 billion annually in lost sales.

Running an blockade is an expensive proposition. Beside the astronomical cost of lost trade opportunities, there are increased distribution costs involved in trading with countries farther than Cuba’s 90 miles proximity, in addition to the millions spent by the Treasury Department to enforce its rules. Furthermore, the United States spends $27 million each year to broadcast Radio and TV Martí to what critics have termed a black hole, since the television signals are effectively blocked by the Cuban government. According to the Council on Hemispheric Affairs, this figure has reached half a billion dollars in the last twenty years.

According to the non-profit Cuba Policy Foundation (CPF), run by a former U.S. ambassador, the blockade is causing the U.S. economy to lose up to $1.24 billion a year in agricultural exports alone, and up to $3.6 billion more a year in associated economic output. The CPF states that Arkansas alone is suffering half a billion dollars in lost business annually. According to the American Society of Travel Agents, if the U.S. were to lift its travel restrictions to Cuba, nearly 1.8 million Americans would visit the country by 2010. This could add to U.S. gross domestic product by as much as $1.6 billion, the society says.

According to Johns Hopkins University, U.S. businesses have been missing out on up to $2 billion in annual trade with Cuba, a figure which translates to $1 billion more in lost trade for the United States than for Cuba each year. In 2002 the Cuban government estimated the loss to the Cubans at about $685 million annually. A December 2008 report by the BBC stated that, to date, the blockade has cost Cuba $93 billion in lost revenue since its introduction in 1962.

In 1992, according to Johns Hopkins University, U.S. businesses had lost well over $30 billion in trade, contrasting with the $28.6 billion lost by Cubans, according to a 1992 study published by the Cuban Central Planning Board’s Institute of Economic Research.

No matter whose figures are used, the cost to both countries has more than tripled in less than twenty years—something which neither citizenry can afford. Even so, Cuba has managed to provide its inhabitants with what the most affluent country in the world has been unable to achieve thus far: free top-notch health care, free university and graduate school education and subsidized food, utilities, and housing which has virtually eliminated homelessness. The fact that a poor, colonized country can meet the basic needs of all its citizens, underscores how inexpensive such an undertaking really is and could prove instructive as well to the president-elect.

In addition to dealing the United States an economic blow, the blockade has deprived U.S. citizens of Cuba’s medical breakthroughs such as vaccines for meningitis B, cures for retinitis pigmentosa; a preservative for un-refrigerated milk and PPG, a cholesterol-reducing drug gobbled up by foreigners for its side effect: increased sexual potency.

The CPF found that 52 percent of Americans nationwide say the blockade should be scrapped, and that 67 per cent of Americans want to lift the U.S. ban on travel to Cuba immediately. Recent polls have also shown a shifting in support of a majority of Miami Cubans toward lifting the blockade.

The origins of the blockade date back to Cuba’s expropriation of US companies. According the U.S. Foreign Claims Settlement Commission, Cuba “nationalized some $1.8 billion worth of U.S. owned property.” At five percent interest over the last 50 years, some argue that the United States has more than $4.5 billion pending in 5,911 separate claims against the government of Cuba.

Cubans argue that early in the century, the United States had appropriated 70 percent of Cuban land, three quarters of Cuba’s primary industry. They say the ensuing life-threatening colonial conditions left them no recourse but to expel the “Yankis,” just as the “Yankees” here had once expelled the British. If we are to hold Cubans accountable for $4.5 billion, one can only gasp at what we owe the British after 233 years including accrued interest.

Margot Pepper is a Mexican-born journalist and the author of a memoir, Through the Wall: A Year in Havana, about her year living and working in Cuba.