The Impact of the Cuban Trade Embargo
By: Natalie Bell
International Business Law
Cuba, the largest island nation in the Caribbean just ninety miles off the coast of Florida, experienced many difficult struggles through its extensive history. It was the last major Spanish colony to gain independence, following a lengthy struggle that was begun in 1868. It was in 1898 when the U.S. intervened during the Spanish-American War that it finally overthrew Spanish rule. The Treaty of Paris established Cuban independence, which was granted in 1902 after a three-year transition period. The United States and Cuba concluded a Treaty of Relations in 1934, which, among other things, continued the 1903 agreements that leased the Guantanamo Bay naval base to the United States (CIA World Factbook). In the time before 1959, the United States had maintained strong ties with Cuba. Many Americans had many various business investments there, and the country was a special place for tourists from around the world. Since the fall of the U.S.-supported dictatorship of Fulgencio Batista in 1959, it was Fidel Castro who has mainly led Cuba throughout the years. It was in Febuary 19, 2008 when Fidel Castro finally ceded power to his brother Raul Castro. Since the majority of Cubans were born after the 1959 revolution, most of the Cuban people have known no other leader. President Fidel Castro outlasted no fewer than nine American presidents since he took power in 1959 (Castro:Profile). Relations between the United States and Cuba deteriorated rapidly as Fidel Castro and the Cuban regime moved toward the acceptance of the one-party communist system. Cuba seized the assets of American citizens and U.S. firms including farms, factories, hotels, bank accounts, and real estate without compensation. It was finally on April 16, 1961 when Fidel Castro declared Cuba a socialist state. Cuba's Communist revolution, with Soviet support, was brought to other countries throughout Latin America and Africa during the 1960s, 1970s, and 1980s. Castro maintained close relations with the Soviet Union and worked jointly with the goals of Soviet communism by funding and provoking violent rebellious activities, as well as using military intervention in other countries, until the fall of the U.S.S.R. in 1991 (Castro: Profile). In response, the United States imposed an embargo on Cuba in October 1960, and, broke diplomatic relations on January 3, 1961. This began the over forty-year period of tension between the U.S. and Cuba, beginning with President Kennedy’s failed Bay of Pigs invasion in 1963 and the Cuban Missile Crises (CIA World Factbook). Since 1961, Cuba portrayed many difficulties as the result of the U.S. embargo and the embargo had a great effect on both nations.
It was in 1963 that the United States passed the Cuban Assets Control Regulations, under the authority of the Trading with the Enemy Act. The Act was enacted in 1917 to restrict trade with countries that are hostile to the United States. The law gives the President the power to oversee or restrict any or all trade between the U.S. and its enemies in times of war. The purpose of the law was to isolate Cuba economically and politically. It banned all trade and financial transactions between Cuba and the U.S., and froze all U.S.-held assets of the Cuban government and of private Cuban citizens. It also prohibited almost all travel to Cuba by researchers, student groups, journalists, athletes, and those traveling to see immediate family members (Schaffer 268).
After the fall of the Soviet Union in the early 1990’s, the U.S. Congress wanted to pressure Cuba for democratic change. First in 1992, the U.S. Congress approved the Cuban Democracy Act, restricting Americans from visiting the island, banning family remittances, and prohibiting foreign subsidiaries of U.S. companies...
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