U.S.-Cuban Trade: A Cold War Strategy Became a Cold War Relic.

EMIS 516: International Business

Department of Management Information Systems (MIS)

University Of Dhaka

H. M. Mehedi Hassan #20-007

Md. Nazmul Hossain Sohel #20-024

Md. Abu Saker Chowdhory #20-038

Md. Firoz Rashid #20-066

Mohammed Abdul Munem #20-075

An analysis of the U.S. embargo on Cuba◦ Political Impacts

◦ Economical, Commercial, and Financial Impacts

◦ Impacts on World Politics

What is the meaning of ‘Embargo’?

- an official ban on trade or other commercial activity with a particular country

The U.S. Embargo on Cuba

Timeline of U.S.-Cuba Relations

Pros and Cons Of Doing Business with

Cuba

Answers of the given Questions

Cuban Dependency on the U.S.

In 1950s, more than two-third of Cuban foreign trade took place with the United States which made Cuba largely dependent on the U.S.

Cuban exports to different U.S. cities before Castro.

Cuban Revolution

Fidel Castro and a group of guerilla fighters successfully revolt against President Fulgencio Batista. Castro establishes a revolutionary socialist state.

Fidel Castro arrives in Havana after Fulgencio Batista's ouster.

Growing Economic Antagonism

Castro nationalizes all foreign assets in Cuba, hikes taxes on American imports, and establishes trade deals with the Soviet Union. President Dwight D. Eisenhower retaliates by slashing the import quota for Cuban sugar, imposing a near-full trade embargo, and cutting off diplomatic ties with Cuba.

Castro signs a decree nationalizing American-owned banks in Cuba.

Bay of Pigs Invasion

President John F. Kennedy sends a brigade of CIA-sponsored Cuban exiles to Cuba in order to overthrow Fidel Castro. Cuban armed forces defeat CIA-sponsored Brigade within three days.

American prisoners captured by Castro forces.

Full Embargo Announced

The Kennedy administration imposes a complete economic embargo on Cuba, restricting travel and trade. The embargo results in a loss of approximately $1.126 trillion over the next fifty years.

A mural in Havana reads, "Down with the blockade," referring to the fifty-year U.S. embargo.

Cuban Missile Crisis

Cuba allows the Soviet Union to build a missile base on the island under a secret agreement. U.S. spy satellites discover the missiles and Kennedy orders a naval blockade on Cuba. The United States negotiates with the USSR and agrees not to invade Cuba and to withdraw its nuclear missiles from Turkey and Italy if the Soviet Union withdraws its nuclear missiles from Cuba.

President John F. Kennedy addresses the country at the height of the Cuban Missile Crisis.

1963

•The US treasury department imposed a total freeze on

Cuban Govt. assets held in U.S.

•Exposed that the CIA had tried to airlift someone to

assassinate Castro and U.S. sponsorship of an invasion

by Cuban exiles at the Bay Of Pigs.

Mass Migration Pressure

Cuba faces intense migratory pressures as its economy suffers from a spike in oil prices and continued U.S. economic sanctions. Thousands of Cubans fled Cuba and reached to Florida , Miami and other coastal states of the U.S. by boats.

A U.S. Marine helps a child off of a Cuban refugee boat.

1990s

•Collapse of Soviet trading block

•Collapse of Soviet Union

1992

•The U.S. congress passed the Cuba Democracy Act.

•Cuba to hold democratic election before U.S. could repeal

the embargo.

1995

•The United Nations voted 117 to 3 against the U.S.

embargo; only Israel & Uzbekistan voted with U.S.

Helms-Burton Act Passed

Cuba shots down two U.S. civilian aircraft belonging to the anti-Castro Miami-based group Brothers.

In reaction to this event, the U.S. congress passes the Helms-Burton Act to tighten the embargo on Cuba and attempts to weaken Cuban ties with non-U.S. foreign investors. The act codifies the embargo, penalizes foreign companies doing business with Cuba.

President Clinton signs the Helms-Burton bill.

2000

•U.S. started allowing agricultural, food & medical exports to

Cuba.

•Cuba quickly became 21st largest agricultural market for the

U.S. and the U.S. became 4th largest exporter to Cuba.

2005

•U.S. restricted remittance & travel to Cuba and required

advance payments for exports.

2009

•President Obama eased restrictions on travel and remittance

to Cuba, allowing to send unlimited remittance in Cuba.

• Highly qualified workforce

• Nearly perfect literacy rate

• High demand for foreign products and services

• Potential markets for U.S. Companies and

industries

• Possibility for tourism

• Huge agricultural market

Pros

• Potential for business with Cuba

-highly limited -low purchasing power of people

• Need to export enough to pay for importsCons

U.S. should not seek to tighten economic grip on Cuba.

Cuba is already a weak economy as compared to U.S.

Cuba is a very potential market.

Efficient labour at lower cost for U.S. industries.

Other countries of the world started favoring Cuba.

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

• Highly qualified workforce

• Near-perfect literacy rates

• Demand for foreign good and services

• Market potential of Cuba is very high.

The most important stipulation should be that any amount of political upheaval should not adversely affect the terms and conditions of trade as agreed upon.

If I were Fidel Castro, I will definitely try to establish trade relationship with the United States. It will permit me to save face politically while contributing to the economic development of the economy. So, I will take step first and invite U.S. policy makers to negotiate for lifting the embargo. If they show positive attitude by lifting banns and starting trade, other countries and companies who are hesitate to invest in Cuba, will feel free to invest in Cuba. Economic development assistance can come in the form of direct aid and, possibly, foreign direct investment, although there surely will be substantial controls on either form.

U.S. is one of the very powerful world economy. Its trade relations and political relations with other countries is dominated and favored because of its strong position in the world economy. Because of its power position , it implied embargo on Cuba and also obliged other countries to follow the same. The main reason behind imposing embargo was the conflicts of political leaders in the 150s decade. The consequences went on till 2006. Wherever, U.S. was able to influence directly or indirectly with other countries-it did to prevent from trading with Cuba and to weaken the Cuban economy.