Americas Cuban Conundrum

MARKETING 505
Assignment #2: Case 5-1 “America 's Cuban Conundrum”

ABSTRACT
This paper analyzes the key issue that prompted the EU to take the Helms-Burton dispute to the WTO. It will decide who benefits and who suffers from an embargo of this type and it explains the rationale behind the conclusion. It also presents a resolution to the trade situation between the U.S. and Cuba. Finally given the trade relations it determines what type of economic barriers would have to be overcome by a U.S. firm to conduct business successfully in Cuba.

Assignment #2: Case 5-1 “America 's Cuban Conundrum”

“In 1996, President Bill Clinton signed the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The President’s actions came after Cuban MiGs shot down two U.S. civilian airplanes, killing the four Cuban-American who were on board.” (Green & Keegan, 2011)
The Helms-Burton freezes the embargo against trade with and investment with Cuba. It is a controversial act since it arouses a lot of negative attention on how the U.S. government is manipulating its power to impose its political views on other countries’ economies.
The key issue -that prompted the EU to take the Helms-Burton dispute to the WTO -was mainly because they felt that it violated international rules dealing with trade. The EU had a dispute with the U.S. regarding testing agriculture, trade and investments and biotechnology issues which was brought to the attention of the WTO. It felt as if the United States was unlawfully exercising its jurisdiction extraterritorially, in that it was threatening to punish lawful activity such as trade, investment, and tourism carried out by the residents of independent countries. It is no exaggeration to say that U.S. policy toward Cuba is now rejected and sharply criticized by the rest of the world. Other nations point out, moreover, that while America insists on maintaining its embargo and other pressures against Cuba because of the latter 's human rights abuses, the fact is that Washington has close relations with--and extends Most Favored Nation treatment to--the People 's Republic of China, Vietnam, Indonesia, and other states that are no more democratic than Cuba and have far worse human rights records, arguing that engagement, trade, and dialogue will do more to bring change in those countries than isolation. (Smith, 1998)

It is obvious that the embargo affects a great number of people. To be all fair and neutral it would be necessary to highlight that to a certain extent, both countries are suffering and their benefits are minimal from this embargo. If it was to cease and somehow both countries came to an agreement and decided to put it all in the past and start from fresh, they would both benefit greatly. Production would increase and the producers on both countries would prosper. Cuban resources would be available to the U.S. Market and American producers would import cost effective products that are not available in Cuba. An increase in capital from investors would make the economy run and prosper.
A resolution to the trade situation between U.S. and Cuba represent the lifting of abolishment of the embargo.
Castro’s regime and that of his successor, his brother Raul, have always talked a good anti-embargo but have not made the least effort to walk the talk, since this embargo may constitute the real reason of their continued hold on power since it gives an “antagonist” to the Cuban people, to the Cuban progress and it gives them an enemy to blame for the failure of Castro’s socialist revolution. In the U.S. there has been a lot of talk as well. President Obama was in favor of lifting of the embargo in 2004, ever since his views and actions changed, however he continued on implementing new policies that are in favor of establishing some type of relationship with the Cuban community. In 2004 President Obama who was then a senator said: "I think it’s time for us to end the embargo in Cuba," the then-Senate candidate said. "And I think that we have to end it because if you think about what’s happening internationally our planet is shrinking, and our biggest foreign policy challenge — and it fits directly into the battle on terrorism and it fits into issues of trade and our economy — is how we make sure that other countries, in developing nations, are providing sustenance for their people, human rights for their people, a basic structure of government for their people that it’s stable and secure so that they can be part in a brighter future for the entire planet. "And the Cuban embargo has failed to provide the source of raising standards of living and it has squeezed the innocents in Cuba," Mr. Obama continued, "and utterly failed in the effort to overthrow Castro, who’s now have been there since I was born. So, it’s time for us to acknowledge that that particular policy has failed." (Speigel, 2009)
But in 2008 he declared the opposite: "I will maintain the embargo," Mr. Obama said in a speech in Miami on May 23, 2008. "It provides us with the leverage to present the regime with a clear choice: if you take significant steps toward democracy, beginning with the freeing of all political prisoners, we will take steps to begin normalizing relations. That’s the way to bring about real change in Cuba – through strong, smart and principled diplomacy." (Speigel, 2009)
For change to come about, a major event will have to take place. This situation seems like a non-negotiable on both sides where for the past 50 years they have agreed on disagreeing which isn’t the way to change the lives of all those people suffering and all those people that in one way or another are being affected negatively.
In the unexpected event that trade relations resume between the U.S. and Cuba, some of economic barriers that would have to be overcome by a U.S. firm to conduct business successfully in Cuba.
Firms will always be alert to any risk or uncertainty that can bring about the loss of assets or revenue due to unstable legal processes or corruption. Seizure of Assets for example: “The ultimate threat a government action to dispossess a foreign company or investor.” (Green & Keegan, 2011.)
Nationalization, expropriation are eminent threats in country with a dictatorship such as Raoul Castro and Fidel Castro. There would have to be some specific amendments to the international law which will pretty much guarantee to the firms and investors, any assets invested in the Cuban Market. Firms and Investors would have to take extra steps in order to protect their selves and clearly recognize the levels of juridical power for Cuba and for the U.S. as well as proactively protect against corruption and piracy which could be a primary issue in Cuba, with a strong intellectual property protection strategy.
Any and all can be done once the embargo is lifted, but this would be the first step to greater changes and reforms, without it everything is only assumptions.
This paper analyzed the key issue that prompted the EU to take the Helms-Burton dispute to the WTO. It decided who benefits and who suffers from an embargo of this type and it explained the rationale behind the conclusion. It also presents a resolution to the trade situation between the U.S. and Cuba. Finally it has determined what type of economic barriers would have to be overcome by a U.S. firm to conduct business successfully in Cuba.

Work Cited
Green, M., & Keegan, W. (2011). Global marketing. (6 ed.). Upper Saddle River, NY: Prentice Hall.
Speigel, L. (2009, April 17). Presiden obama-who once supported, but no opposes, lifting the embargo-seeks "new beginning" with cuba. Retrieved from http://abcnews.go.com/blogs/politics/2009/04/president-ob-19/
Smith, W. (1998). Our dysfunctional cuban embargo.. (Vol. 42).

Cited: Green, M., & Keegan, W. (2011). Global marketing. (6 ed.). Upper Saddle River, NY: Prentice Hall. Speigel, L. (2009, April 17). Presiden obama-who once supported, but no opposes, lifting the embargo-seeks "new beginning" with cuba. Retrieved from http://abcnews.go.com/blogs/politics/2009/04/president-ob-19/ Smith, W. (1998). Our dysfunctional cuban embargo.. (Vol. 42).