19 February 1999
(Council on Foreign Relations task force report) (9200) By Bernard W. Aronson and William D. Rogers USIA has obtained permission for republication/translation of the following text by USIS/press outside the United States. On the title page, credit authors and carry: Copyright (c) 1999 by the Council on Foreign Relations (R), Inc. All Rights Reserved. (begin text) U.S.-CUBAN RELATIONS IN THE 21ST CENTURY INDEPENDENT TASK FORCE OF THE COUNCIL ON FOREIGN RELATIONS CO-CHAIRS' REPORT By Bernard W. Aronson and William D. Rogers I. Introduction In reviewing U.S. policy toward Cuba, this Task Force is well aware that we are undertaking one of the most difficult and perhaps thankless tasks in American foreign policy. Our domestic debate about Cuba has been polarized and heated for decades, but this report seeks to build new common ground and consensus with hope and confidence. What shapes our recommendations is a sense that U.S.-Cuban relations are entering a new era. We have tried to analyze the nature of this new era, understand the American national interest vis-a-vis Cuba at this time, and develop an approach to Cuba policy that avoids the polarization of the past. We have not tackled every outstanding issue. Instead, we have elected to try to break the current logjam, by proposing new steps that we hope can elicit broad bipartisan consideration. Some will find our recommendations too conservative; others will argue that our proposals will strengthen the current Cuban regime. We hope and trust, instead, that these proposals will promote U.S. interests and values by hastening the day when a fully democratic Cuba can reassume a friendly, normal relationship with the United States. Too often, discussions of U.S. policy toward Cuba start from the position that the policy over the last four decades has been a failure. Both opponents and supporters of the embargo sometimes embrace this conclusion as a starting point and then urge either jettisoning the embargo because it is counterproductive and a failure or tightening the embargo to increase its effectiveness. We believe that U.S. policy toward Cuba throughout the Cold War sought to achieve many goals, ranging from the overthrow of the current regime to the containment of the Soviet empire. Not all these goals were achieved. Cuba remains a highly repressive regime where the basic human rights and civil liberties of the Cuban people are routinely denied and repressed. Indeed, in its annual report issued in December 1998, Human Rights Watch said that Cuba has experienced "a disheartening return to heavy-handed repression." Still, we believe that U.S. policy toward Cuba, including the embargo, has enjoyed real though not total success. The dominant goal of U.S. policy toward Cuba during the Cold War was to prevent the advance of Cuban-supported communism in this hemisphere as part of an overall global strategy of containing Soviet communism. There was a time in this hemisphere when the danger of Cuban-style communism threatened many nations in Latin America, when many young people, academics and intellectuals looked to Cuba as a political and economic model, and when Cuban-supported violent revolutionary groups waged war on established governments from El Salvador to Uruguay. That time is gone, and no informed observer believes it will reappear. Cuban communism is dead as a potent political force in the Western Hemisphere today. Democracy is ascendant in the Western Hemisphere, however fragile and incomplete it remains in some nations. Today, electoral democracy is considered the only legitimate form of government by the member states of the Organization of American States (OAS), and they are formally committed to defend it. A 1998 Defense Intelligence Agency analysis concluded that Cuba no longer poses a threat to our national security. Cuba's Caribbean neighbors are normalizing their relations with Cuba not because they fear Cuban subversion, but in part because they understand that Cuban ideological imperialism no longer constitutes a regional force. The emergence of democracy throughout the hemisphere, the loss of Soviet support, sustained U.S. pressure, and Cuba's own economic woes forced the Cuban regime to renounce its support of armed revolutionary groups. Containment has succeeded, and the era when it needed to be the organizing principle of U.S. foreign policy toward Cuba has ended. Throughout the Cold War the United States sought either to induce Fidel Castro to introduce democratic political reforms or to promote his replacement as head of the Cuban state. We believe support for democracy should be our central goal toward Cuba. But we believe the time has come for the United States to move beyond its focus on Fidel Castro, who at 72 will not be Cuba's leader forever, and to concentrate on supporting, nurturing, and strengthening the civil society that is slowly, tentatively, but persistently beginning to emerge in Cuba today beneath the shell of Cuban communism. This is not a repudiation of our policy of containment but its natural evolution. As George F. Kennan wrote, containment was not simply a strategy to limit the influence of communism in the world. In his 1947 Foreign Affairs article, Kennan argued that communism, as an economic system, required the continuous conquest of new resources and populations to survive. Once bottled up, communist systems will decay. Its poor economic performance and its frustration of the natural human desire for freedom make communism a doomed system if it cannot expand. Communism's collapse across Eastern Europe and the Soviet Union triumphantly vindicated Kennan's views. The processes of decay that Kennan foresaw for the Soviet Union after containment are already far advanced in Cuba. The Cuban economy contracted significantly after Soviet subsidies ended. Cuba has legalized the dollar, tolerated modest small business development, however limited, and sought foreign investment in tourism to attract desperately needed foreign exchange. The Cuban government's formidable instruments of repression keep open dissenters marginalized, but the poverty and repression of daily life for most Cubans, combined with the affluence they see among foreign tourists and Cubans with access to hard currency, are steadily eating away at the foundations of Cuba's system. John Paul II's extraordinary visit to Cuba in January of 1998 revealed a deep spiritual hunger in Cuba and massive popular support for the Cuban church. The regime has lost the struggle for the hearts and minds of Cuba's youth, few of whom long for a future under Cuban-style "socialism." Indeed, we believe that in both civil society and, increasingly, within middle-level elements of the Cuban elite, many Cubans understand that their nation must undergo a profound transformation in order to survive and succeed in the new globalized economy and in today's democratic Western Hemisphere. Cubans on the island also know well that while they remain citizens of an impoverished nation, struggling to meet the daily necessities of life more than 40 years after the revolution, Cubans and Cuban-Americans one hundred miles to the north are realizing great economic and professional achievements. This peaceful majority of Cuban-Americans in the United States, by demonstrating that freedom, capitalism, and respect for human dignity can allow ordinary people to achieve their full potential, is helping erode the Cuban regime's domestic credibility. Almost every person in Cuba knows someone who lives in the United States. Increased contact between Cubans on the island and their friends and relations in the United States -- a central goal of U.S. policy since the 1992 passage of the Cuban Democracy Act -- may have done more to weaken the Cuban government than any other single factor since the collapse of the Soviet Union. While it is by no means clear how fast change will come in Cuba, there is no doubt that change will come. The regime has two choices. Both lead to change. On the one hand, it can open up to market forces, allowing more Cubans to open small businesses and inviting more foreign investment to build up the economy. This will relieve Cuba's economic problems to some extent --with or without a change in U.S. policy -- but at the cost of undermining the ideological basis of the Cuban system. The alternative -- to throttle Cuban small business and keep foreign investment to a minimum -- will not preserve the status quo in Cuba either. If Cuba refuses to accept further economic reforms, its economy will continue to decay, and popular dissatisfaction with the system will increase. Just as Kennan predicted 50 years ago in the Soviet case, a communist system forced to live on its own resources faces inevitable change. U.S. opposition to Cuban-supported revolution and U.S. support for democracy and development in this hemisphere played a critical role in frustrating Cuba's ambitions to extend its economic model and political influence. With this success in hand, the United States can now turn to the second stage of its long-term policy on Cuba: working to create the best possible conditions for a peaceful transition in Cuba and the emergence of a democratic, prosperous, and free Cuba in the 21st century. A look at postcommunist Europe shows us that the end of communism can lead to many different results -- some favorable, others not so. In countries like Poland, the Czech Republic, and Hungary, the end of communism started a process of democratic and economic development. In contrast, new governments in much of the former Soviet Union are ineffective and corrupt. Criminal syndicates dominate some of these new economies, and ordinary people suffered catastrophic declines in living standards. In Nicaragua, free elections ended Sandinista rule, but the successor governments have not yet put the country on the path to prosperity. Furthermore, there are many different ways in which communist regimes can change. In the former Czechoslovakia, the "Velvet Revolution" led to a peaceful transfer of power. In Romania, the former ruler and his wife died in a bloody internal struggle. In Poland, civil society developed within the shell of communism, enabling Solidarity to strike a bargain with the Communist Party that provided for a limited period of power-sharing prior to truly free and fair elections. During this transition, the United States-both the government and many nongovernmental organizations-actively engaged with and supported Poland's emerging civil society, from the Catholic Church and human rights groups to the Polish trade union movement. Simultaneously, while the U.S. government directly supported Poland's emerging civil society, it also offered the carrot of relaxing existing sanctions to persuade the military regime to release political prisoners and open space for free expression of ideas and political activity. As a unique society with its own history and social dynamics, Cuba will find its own solution to the problem posed by its current government. The United States cannot ordain how Cuba will make this change, but U.S. policy should create conditions that encourage and support a rapid, peaceful, democratic transition. The United States has learned something else about transitions. Some who formerly served the old regimes, whether through conviction, opportunism, or necessity, have become credible and constructive members of the newly emerging democratic governments and societies. The Polish armed forces -- which enforced martial law against Solidarity in the early 1980s -- are now a trusted NATO partner. Throughout Central and Eastern Europe and the former Soviet Union, officials who once served the communist system became valuable, democratic-minded members of new, free societies. Some former communist parties reorganized themselves on democratic lines in Italy as well as in Eastern and Central Europe -- and now play key roles as center-left parties in constitutional democracies. This experience allows the United States to approach Cuba today with more flexibility than in the past. Some who today serve the Cuban government as officials may well form part of a democratic transition tomorrow. Indeed, enabling and encouraging supporters of the current system to embrace a peaceful democratic transition would significantly advance both U.S. and Cuban interests in the region. The American national interest would be poorly served if Cuba's transition leads to widespread chaos, internal violence, divisive struggles over property rights, increased poverty, and social unrest on the island. An additional danger for the United States would arise if chaos and instability led to uncontrolled mass migration into the United States. Having tens or hundreds of thousands of desperate Cubans fleeing across the Florida Straits would create both humanitarian and political emergencies for the United States. Civil strife in Cuba would also have serious consequences for the United States, including potential pressures for the United States to intervene militarily. On the other hand, the benefits to the United States of a peaceful, democratic and prosperous Cuba would be substantial. A democratic Cuba has the potential to be a regional leader in the Caribbean in the fight against drug trafficking and money laundering. As a trading partner, Cuba would be a significant market for U.S. agricultural, industrial, and high-tech goods and services. A reviving tourist industry in Cuba will create tens of thousands of jobs in the United States. Working together, the United States, Cuba, and other countries in the region can protect endangered ecosystems like the Caribbean's coral reefs, cooperate on air/sea rescues and hurricane prediction, and develop new plans for regional integration and economic growth. Finally, the growth of a stable democratic system in Cuba will permit the resumption of the friendship between Cubans and U.S. citizens, a friendship that has immeasurably enriched the culture of both countries. The estrangement between Cuba and the United States is painful for both countries; a return to close, friendly, and cooperative relations is something that people of goodwill in both countries very much want to see. II. Task Force Recommendations and Current Policy With the end of the Cold War, substantial strains on the Cuban economy, and the end of Cuban support for armed revolutionary movements in the Western Hemisphere, U.S. policy toward Cuba has evolved through the 1990s. The 1992 Cuban Democracy Act (CDA) both strengthened economic sanctions against the Castro regime and authorized the president to implement a range of measures to promote exchanges and contacts between Americans and Cubans and take unspecified measures "to support the Cuban people." Following passage of the CDA, the administration reached an agreement with Cuba to restore direct phone service between the two countries, permitted the opening of news bureaus in Havana and began to ease travel restrictions for scholars, artists, and others. At the same time, the CDA tightened the embargo by blocking trade between third-country U.S. subsidiaries and Cuba. In 1994 and 1995 the United States and Cuba signed immigration accords under whose terms 20,000 Cuban citizens are allowed to emigrate to the United States each year, including up to 5,000 Cubans per year who qualify as political refugees. Cubans attempting to enter the United States irregularly are returned to Cuba. In 1996, following the downing by Cuban MIGs of two American planes and the death of three American citizens and one Cuban legal resident, the Cuban Liberty and Democratic Solidarity Act (popularly known as Helms-Burton) passed Congress and was signed into law by the president. The new law further defined U.S. policy toward Cuba. Title I seeks to strengthen international sanctions against the Cuban government through a variety of diplomatic measures. Title II delineates the conditions under which the president may provide direct assistance for and otherwise relate to a new or transitional government in Cuba. (1) Title III further internationalizes the embargo by exposing foreign investment in nationalized Cuban properties to the risk of legal challenge in American courts by former American property owners, including individuals who at the time of confiscation were Cuban nationals but who have since become U.S. citizens. A provision of the law allows the president to prevent legal action in the courts by exercising a waiver of Title III every six months. Title IV denies entry into the United States to executives (and their family members) of companies who invest in properties confiscated from persons who are now U.S. citizens. In the aftermath of the 1996 attack on U.S. civilian planes, the administration tightened sanctions against Cuba, including suspending direct flights from Miami to Havana. The administration continued to exercise its semi-annual waiver authority, preventing American citizens from taking legal action pursuant to Title III of Helms-Burton. U.S. policy evolved following John Paul II's historic visit to Cuba in January 1998, as a bipartisan consensus began to emerge in the Congress and the executive to explore ways to increase the flow of humanitarian aid to the Cuban people. On March 20, 1998, the administration restored daily charter flights and renewed the right of Cuban-Americans to send remittances to family members on the island. Tensions between the two countries remain, however. In September 1998, the United States arrested ten Cuban citizens in connection with an alleged spy ring operating in South Florida. In relation to those arrests, in December 1998 the United States expelled three diplomats at the Cuban mission to the United Nations. In spite of these continuing problems, we favor increasing people-to-people contact between American and Cuban citizens and with Cuban civil society and further facilitating the donation and distribution of humanitarian aid. Building on the provisions of existing law and policy that opened the doors to these wider contacts, our recommendations call for substantially stepped-up people-to-people contact and intensified and decentralized humanitarian relief efforts. We believe that beneath the surface of Cuban communism a modest transition has begun, both in the attitudes of many Cubans living on the island and in emerging church, civic, and small-scale private sector activities. Clearly, the challenge to U.S. policy is to encourage and support this inevitable transition. III. Framework of Recommendations While we no longer expect Cuban communism to survive indefinitely or spread, it should remain a clear objective of U.S. policy neither to support nor to appear to support the current regime. A broad, bipartisan consensus in the United States now exists that the U.S. government should use its influence to support democratic development throughout the Americas. This recognition is axiomatic in U.S. foreign policy and remains the cornerstone of U.S. efforts to promote regional economic integration. The Cuban dictatorship merits no exception to U.S. policy in the Western Hemisphere. This is the first principle that guided us in developing our recommendations: No change in U.S. policy toward Cuba should have the primary effect of consolidating or legitimizing the status quo on the island. On the other hand, every aspect of U.S. foreign and economic policy toward Cuba should be judged by a very pragmatic standard: whether it contributes to rapid, peaceful, democratic change in Cuba while safeguarding the vital interests of the United States. IV. Summary of Recommendations Our recommendations come in five baskets. Under "The Cuban-American Community," we make proposals to increase contacts between Cuban-Americans and their friends and families on the island. Under "The Open Door," we propose additional measures to increase contacts between U.S. and Cuban citizens and to open the windows and doors to the world that the current Cuban regime has nailed shut. Under "Humanitarian Aid," the third basket, we offer proposals to assist the victims of the Cuban regime, including both Cuban-Americans and people still on the island. Our fourth basket, "The Private Sector," sets forth criteria for a gradual introduction of U.S. economic activities in Cuba to support the recommendations in the first three baskets of proposals. A fifth basket of "National Interest" recommendations makes specific proposals for addressing particular problems that involve U.S. national interests. In general, most of these changes can be initiated unilaterally by the United States and will not require bilateral negotiations with the Cuban regime. The Task Force proposals go well beyond current administration policy with respect to people-to-people contact and humanitarian aid. However, in the case of the private-sector recommendations, the full implementation of these proposals requires changes in Cuban policy and law. Some of us would propose more sweeping changes, such as unilaterally lifting the embargo and all travel restrictions; others vehemently oppose this step. We do not dismiss these debates, but we chose in this report not to engage in them. U.S. policy must build a bipartisan consensus to be effective. Therefore, we have consciously sought new common ground. A. Basket One: The Cuban-American Community Cuban-American remittances to friends, families, and churches in Cuba today are estimated by various sources at between $400 million and $800 million annually. However measured, this is the island's largest single source of hard currency. While it is perfectly normal for developing countries to receive remittances, in the Cuban political context the dependence on U.S. dollars sent home by Cuban-Americans is a humiliating badge of failure. Cuba has become a charity case, dependent on handouts from those it has persecuted, oppressed, or driven away by poverty. Some voices in the United States argue that, by enhancing hard-currency holdings in Cuba, remittances prop up the current regime and prolong the island's agony. This argument is not without merit, but, on balance, we disagree. First, we share a basic moral and humanitarian concern over easing the suffering of Cuba's people. Moreover, the success of the Cuban-American community is one of the most powerful factors in promoting change in Cuba. The transfers of money, goods, and medical supplies from Cuban-Americans to friends, family, and religious communities in Cuba are helping create a new group of Cubans who no longer depend on the state for their means of survival. Remittances from Cuban-Americans help create small businesses in Cuba and allow hundreds of thousands of Cubans to improve their lives independent of government control. Furthermore, Cuban-Americans will play an important role in the construction of a post-communist Cuba. Their national and global contacts, understanding of market economies, and professional skills will give them a vital role as a bridge between the United States and Cuba when Cuba rejoins the democratic community. Cuban-American Community Recommendations 1. End Restrictions on Humanitarian Visits. We recommend an end to all restrictions on the number of humanitarian visits that Cuban-Americans are permitted to make each year. The federal government should not be the judge of how often Cuban-Americans, or any other Americans, need to visit relatives living abroad. 2. Raise Ceiling on Remittances. Under current regulations, only Cuban-Americans are permitted to send up to $1,200 per year to family members on the island. We recommend that the ceiling on annual remittances be increased to $10,000 per household and that all U.S. residents with family members living in Cuba should be permitted to send remittances to their family members at this level on a trial basis for 18 months. This policy should continue if the executive, in consultation with Congress, concludes at the trial period's end that the Cuban regime has not enacted tax or other regulatory policies to siphon off a significant portion of these funds, and that this policy furthers the foreign policy interests of the United States. 3. Allow Retirement to Cuba for Cuban-Americans. We recommend that retired and/or disabled Cuban-Americans be allowed to return to Cuba if they choose, collecting Social Security and other pension benefits to which they are entitled in the United States, and be granted corresponding banking facilities. 4. Promote Family Reunification. Many members of the Cuban-American community are concerned about the difficulty their family members in Cuba encounter in getting U.S. visas for family visits. While commending the efforts of the overworked consular staff in Havana, we believe it is important that Cuban-Americans receive and be seen to receive fair and courteous treatment. We recommend that the State Department and Immigration and Naturalization Service (INS) make every effort in processing requests at the U.S. Interests Section in Havana to insure that Cuban citizens wishing to visit family members in the United States face no higher hurdle in obtaining visas than that faced by family members in other countries wishing to visit relatives in this country. We recommend that State Department and INS officials meet regularly with representatives of the Cuban-American community to discuss ways to expedite the determination of eligibility for family visits to the United States. Later in this report, we recommend an expansion of U.S. consular services in Cuba. 5. Restore Direct Mail Service. The 1992 Cuban Democracy Act grants the president the authority to authorize direct mail service between the United States and Cuba. We recommend that representatives of the U.S. and Cuban postal services meet to begin restoring direct mail service between the two countries. B. Basket Two: The Open Door Since the passage of the 1992 Cuban Democracy Act, U.S. law has recognized that spreading accurate and fair information about the outside world in Cuba is an important goal of American foreign policy. The lack of information about events in Cuba has also enabled the Cuban regime to persecute its own people with little fear that foreigners will come to their support-or in some cases, even know what the Cuban government is doing. Whether through Radio Marti, restoring direct telephone service, or promoting cultural and academic exchanges, the United States has consistently sought to increase the access of Cubans to news and information from abroad. We believe the time has come to significantly upgrade and intensify these efforts. The Cuban people are hungry for American and world culture, for contacts with scholars and artists from other countries, for opportunities to study abroad, for new ideas and fresh perspectives. U.S. policy should encourage these exchanges and encounters through every available measure. Open Door Recommendations 1. Facilitate Targeted Travel. Despite bureaucratic obstacles erected by both governments, the exchange of ideas remains one of the most promising areas for genuinely fruitful people-to-people contact. Since 1995, the United States has significantly cut the red tape surrounding academic exchanges. We commend that trend and urge the further reduction of restrictions on academic (undergraduate, graduate, and postgraduate) and other exchanges. We recommend that, following a one-time application, the Office of Foreign Assets Control (OFAC) grant a "permanent specific license" to all Americans with a demonstrable professional or other serious interest in traveling to Cuba for the purpose of engaging in academic, scientific, environmental, health, cultural, athletic, religious, or other activities. The presumption would be that these applications would normally and routinely receive approval. (2) In 1994 the Congress passed a Sense of Congress resolution stating that "the President should not restrict travel or exchanges for informational, educational, religious, cultural or humanitarian purposes or for public performances or exhibitions between the United States and any other country." At the same time, congressional policy toward Cuba has increasingly focused on opening opportunities for meaningful encounters between American and Cuban citizens. Thus, we recommend that OFAC grant easily renewable multiple-entry special licenses to travel agencies and nongovernmental organizations for structured travel programs available to groups and individuals for the purposes enumerated by Congress. Individual participants in such travel would visit Cuba under the organizing agency's license. This recommendation is formulated to facilitate a more open relationship between Cubans and Americans, not to support a Cuban tourism industry currently built on a system that prevents foreign employers from hiring and paying workers fairly and directly and denies Cuban citizens access to facilities designated exclusively for foreigners. When and if employers are able to hire and pay their workers directly, and when the system of "apartheid tourism" ends, we recommend the United States consider permitting leisure travel. 2. Allow More Private Visits of Certain Cuban Officials to the United States. The United States currently denies visas for travel to the United States by Cuban officials who rank at the ministerial level and by the 500 deputies of the National Assembly of People's Power. Because of the positions they now hold and may assume in the future, many such individuals are among those we believe should have the opportunity to interact with Americans, to experience our system directly, and to witness the vigor and openness of our own public policy debate. We recommend that the United States lift its blanket ban on travel to the United States by deputies of the National Assembly and Cuban cabinet ministers, exercising a presumption of approval for applications from these officials for travel to the United States, except for those identified by the State Department who are credibly believed to have directly and personally participated in or ordered grave acts of repression that violate international law or who represent a legitimate security concern to the United States. In making this recommendation we seek to encourage nongovernmental and private contacts such as those sponsored by U.S. academic institutions. We recognize that this recommendation risks greater penetration of the United States by Cuban intelligence agencies. We have confidence in the ability of U.S. national security agencies to guard against this threat, and we believe that the gains far outweigh the risks. Nevertheless, this danger must be carefully watched and adjustments in this policy calibrated accordingly. 3. Facilitate Cultural Collaboration and Performances by Americans in Cuba and by Cubans in the United States. Since the passage of the 1992 Cuban Democracy Act, there has been a significant increase in the number of Cuban artists, actors and musicians traveling to the United States. Unfortunately, fewer U.S. performers have traveled to Cuba. These exchanges and activities are vital to any strategy to end the cultural isolation of the Cuban people. Through simplified visa and license procedures and other mechanisms, the U.S. government should encourage an increase in these programs. We applaud efforts to date to support such initiatives and recommend further that the United States encourage collaboration between American and Cuban artists and allow transactions for the creation of new cultural and/or artistic products. Cuban artists performing in the United States today are only allowed to receive modest per diem payments to cover living expenses. We recommend that Cuban artists performing in the United States be allowed to receive freely negotiated fees from their American hosts. Similarly, American artists performing in Cuba should be eligible to be paid for their work at reasonable negotiated rates. 4. Protect and Share Intellectual Property. Currently, Cuba systematically pirates significant amounts of U.S. cultural and intellectual property, ranging from Hollywood movies broadcast on Cuban television to computer software used throughout the island. Cuba refuses to consider paying for this illegal use of intellectual property, citing the U.S. embargo as an excuse. This creates an awkward situation for the United States. On the one hand, our interest in opening Cuba to outside influences leads us to encourage and even facilitate Cuba's access to U.S. and other foreign films, cultural materials, and political and economic literature. On the other hand, the U.S. government cannot condone theft from U.S. citizens and corporations. Furthermore, we must ensure that Cuba does not become an international center for the illegal production and redistribution of pirated intellectual property. We therefore propose that the United States allow and encourage U.S. companies and artists to guarantee and protect their trademarks and copyrights and to negotiate permission for Cuba to use their products. We recommend that the U.S. government license and approve these transactions and authorize companies to spend funds obtained through these settlements for filming, recording, translation, or other legitimate cultural activities in Cuba. Likewise, we encourage both governments to regularize and comply with domestic and international trademark and copyright protection regimes. 5. Pioneer "Windows on the World." Successful transitions to multiparty systems and market and mixed market economies in Eastern Europe, Spain, Portugal and Latin America may offer constructive guideposts to help Cuba's transition occur in as benign a manner as possible. To that end, the United States should pioneer the creation of a merit-based program for Cubans to study in American universities and technical training institutes. The program should include sending professionals with technical expertise to advise Cuba in the development of institutional mechanisms to support the emergence of small businesses and private farms as well. In addition, we recommend that the United States Information Agency (USIA) invite Cuban government officials (except those excluded as defined in Basket Two, Number Two) and scholars for its programs that bring foreign citizens to meet with their peers in and out of government in the United States. We further recommend that funds be made available from various public and independent sources, such as the National Endowment for the Arts, the National Endowment for Humanities, the National Endowment for Democracy, the Fulbright scholarship program, and from private foundations for university and other programs to support national, regional, and bilateral research activities involving Cuba. This includes support for new acquisitions by Cuban libraries. In addition, we recommend that the United States encourage and facilitate direct funding of in-country activities by private foundations so that their grant-making activities can include direct support to Cuban research institutions and community organizations. We recommend that the U.S. government consult with foundation officers and others with expertise in this field in order to determine a fair and feasible approach. We note with concern that some academic and other nongovernmental institutions, citing pressure from the Cuban government, have barred Cuban-Americans from participating in existing exchange programs. Discrimination based on ethnicity or place of origin is a violation of U.S. civil rights laws. All organizations participating in exchanges or other activities with Cuba should state clearly that in compliance with U.S. law, they will not discriminate against participants based on age, race, gender, or national origin. 6. Permit Direct Commercial Flights. We recommend that the OFAC authorize and license direct commercial flights to Cuba. Current regulations authorize daily direct charter flights between Miami and Havana. It is not in the U.S. national interest that non-U.S. carriers capture the entire market of expanding travel to and from Cuba. We therefore recommend that American commercial airlines begin to open routes to Havana and perhaps other Cuban cities not only from Miami but from other major cities and hubs. We recommend also that the United States and Cuba negotiate a civil aviation agreement to this end. 7. Amend Spending Limits. Current regulations limit licensed travelers to Cuba to spending no more than $100 per day, plus transportation and expenses for the acquisition of informational materials, including artwork. We recommend that OFAC impose this limit only on spending in state-owned enterprises and joint ventures. 8. Expand Diplomatic and Consular Services. The recommendations in this report will greatly increase demands on the U.S. Interests Section in Cuba. Current U.S. consular services in Cuba should not be limited to Havana. We recommend, therefore, that the United States open a subsection of its Havana consular office in Santiago de Cuba, a step that will also increase our ability to fill the quota of 5,000 slots available for Cuban political refugees each year. We recommend that the United States negotiate a reciprocal agreement with Cuba that will allow each country to expand its consular services to accommodate increased contact between citizens of both countries. 9. Demand Reciprocity in Limitations on Activities by U.S. and Cuban Diplomats. At present, an imbalance exists wherein American diplomats in Havana are denied access to government offices, the courts, the National Assembly, the University and virtually all official Cuban facilities other than the Ministry of Foreign Relations. The same is not the case in Washington, where Cuban diplomats freely walk the halls of Congress, meet with elected representatives, speak at universities, and otherwise have access to a fairly wide range of American governmental and nongovernmental representatives. We recommend that the United States and Cuba discuss a reciprocal widening of the areas of permitted activities for diplomats in both countries. C. Basket Three: Humanitarian Aid The 1992 Cuban Democracy Act established regulations addressing the humanitarian needs of the Cuban population. Since then, the economic crisis has worsened. This basket of recommendations includes humanitarian measures that will help relieve the suffering of the Cuban people today while building the basis for a better relationship between Cuba and the United States in the future. Humanitarian Aid Recommendations 1. Institute "Cash and Carry" for Foods and Medicines. We applaud the intention behind recent efforts in the Congress and the executive branch to facilitate the increased delivery of humanitarian aid to Cuba. Recognizing that a consensus is emerging to extend humanitarian aid to benefit the Cuban people directly, we recommend that the president accelerate and facilitate this process by eliminating all licensing with respect to donation and sales of food, medicines, and medical products to nongovernmental and humanitarian institutions such as hospitals, which are nominally state-run but are not primarily instruments of repression, while authorizing all necessary financial transactions for cash payments on a noncredit basis. We recommend that the State Department issue a specific list of repressive institutions (3) that are to be excluded as potential aid recipients or buyers. To further facilitate donations and sales of food, medicines, and medical products, we recommend that the United States issue licenses to U.S. private voluntary and religious organizations, nongovernmental organizations, and businesses to operate distribution centers in Cuba. 2. Promote People-to-People Aid. We support American engagement with a wide range of civil institutions, particularly those in the private sector, e.g., the emerging church-run medical clinics and humanitarian institutions such as hospitals, which are nominally state-run but are not primarily instruments of repression. With the support and indeed the encouragement of the Congress, the administration has significantly widened the opening for Americans to launch humanitarian, people-to-people programs in Cuba. We encourage American local governments and nongovernmental organizations to "adopt" their Cuban counterparts, whether through church, hospital, school, environmental, or university programs. The United States should eliminate the need for licenses for humanitarian donations and shipments, including material aid and cash, and should grant a general license for related travel. We recommend that the United States impose no limit on the amount of material donations under such programs, while requiring a license for cash donations above $10,000 per year by any one American institution to its Cuban counterpart -- with the exception of private foundations, for which we recommend waiving that limit and permitting the grant-making bodies to use their own institutional criteria to determine in-country funding limits. In the same spirit as that which underlies the Basket One recommendation regarding family remittances, we recommend the United States permit American families to adopt and send remittances to Cuban families of up to $10,000 per year. 3. Allow Cuban-Americans to Claim Relatives as Dependents. Currently American citizens with dependent relatives living in Canada and Mexico can claim them as dependents for federal income tax purposes if they meet the other relevant IRS requirements. We recommend an amendment to U.S. tax laws so that American taxpayers with dependents who are residents of Cuba can also claim this deduction. 4. Provide Benefits for Families of Prisoners of Conscience. Under current law, the president may extend humanitarian assistance to victims of political repression and their families in Cuba. We recommend that the United States encourage our European and Latin American allies to join with us to provide support and assistance to family members who, because of their imprisoned relatives' peaceful political activities, may find themselves denied access to jobs by Cuban authorities or who have lost the wages of an imprisoned spouse or parent. If it is not possible to deliver the funds to affected families in Cuba today, we recommend that the funds be paid into interest-bearing accounts in the United States and elsewhere, free of all tax, to accumulate until such time as the intended recipients can collect. D. Basket Four: The Private Sector Private sector, for-profit business activity in Cuba by U.S. individuals and corporations raises a number of difficult issues. To take one example, Cuban labor laws currently require foreign investors to contract Cuban workers indirectly through the Ministry of Social Security, a violation of internationally recognized labor rights. While there are some minor exceptions to the rule, the overall result of these requirements is that the foreign investor pays several hundred dollars per month per worker, but the worker receives no more than a few dollars per month. By allowing the Cuban state to control which Cubans will have access to coveted jobs with foreign investors, the system also reinforces the Cuban regime's control over the lives of the Cuban people. Until a complete settlement of the claims resulting from nationalization of private property in Cuba is reached, U.S. investors in Cuba could conceivably end up buying or profiting from nationalized property; and find their titles or earnings challenged under international law by the original owners. Many trademark and other intellectual property problems involve the two countries. Cuba's insistence that most foreign investment take the form of joint ventures in which the Cuban government often retains a controlling interest is another serious problem, as is the incompatibility of Cuba's legal and financial arrangements with U.S. trade policy. In formulating our recommendations about private U.S. business in Cuba, we once again try to walk a middle way. These recommendations open a door for Cuba progressively to escape some of the consequences of the embargo-to the extent that the Cuban government gives Cubans the right to own and operate their own enterprises, allows foreign companies to hire Cubans directly, and begins to respect basic internationally recognized labor rights. The recommendations will make clear to the Cuban people (as well as to other countries) that the chief obstacle to Cuba's economic progress is not U.S. policy but the Cuban government's hostility to private property and independent business, its control of the economy and investment, its persistent appropriation of the lion's share of the wages of working Cubans, and its unwillingness to allow companies to pay fair wages to their employees or permit them to engage in free collective bargaining. Private Sector Recommendations 1. Begin Licensing Some American Business Activity. We recommend that four limited categories of American businesses receive licenses to operate in Cuba. The first category -- already eligible for licensing -- can generally be described as newsgathering or the procurement of informational material. The second category relates to supporting licensed travel, including transportation to and from Cuba and services to assist the private sector, such as paladares and bed and breakfasts, in capturing the business resulting from increased licensed travel. (An example of this type of business would be guides and Internet registries that provide information for foreign visitors about private restaurants, bed and breakfasts, car services, and other private services available in Cuba.) The third category includes activities related to distribution of humanitarian aid and sales. In the fourth category are businesses that will facilitate activities related to culture, including the production of new cultural materials, the purchase and sale of artworks and other cultural materials, and the verification of Cuban adherence to intellectual property rights agreements. These four categories, in our judgment, provide such clear benefits that we recommend the U.S. government begin licensing private businesses to operate in all these fields, each of which involve primarily activities that support objectives clearly specified in U.S. law. The U.S. government should routinely license business operations in Cuba restricted to these four areas and allow the transactions and support services necessary to conduct them. 2. Condition Additional American Business Activity. Beyond these limited areas, a number of groups have looked at how to structure U.S business relations in Cuba without reinforcing the status quo. One of the best known is a set of guidelines known as the Arcos Principles. Drawing from these and similar efforts such as the Sullivan Principles in South Africa and the MacBride Principles in Northern Ireland, we recommend that American businesses demonstrate that they can satisfy three core conditions before being licensed to invest in Cuba for activities beyond the four specified above: the ability to hire and pay Cuban workers directly and not through a government agency; a pledge by the company to respect workers' internationally recognized rights of free association; and a pledge by the company not to discriminate against Cuban citizens in the provision of goods and services. (The final condition is designed to counter the practice of "tourism apartheid" in which certain foreign-owned and operated facilities do not allow Cuban citizens to use their facilities, even when they have the money to pay.) We would also encourage U.S. investors -- and indeed all foreign investors in Cuba -- to provide reading rooms, classes, Internet access, and other on-site facilities so that their employees can enjoy wider access to the world. If Cuba should change its labor laws to make compliance with these principles easier, it would then become much easier for U.S. companies to invest. For a specific business license to be approved, however, it is enough for a particular company to demonstrate that it can satisfy the three criteria listed above. If and when Cuban law is changed to facilitate compliance with the core principles outlined above, or if authorities begin to grant exemptions and waivers on a routine basis, we would recommend that Congress and the Executive consider broader application of such licensing. In all cases, licensing a business to operate under these provisions would in no way reduce the risk of incurring Helms-Burton penalties for trafficking in confiscated property. E. Basket Five: The National Interest The National Interest Recommendations 1. Conduct Military-to-Military Confidence Building Measures. Both Presidents Bush and Clinton have stated that the United States has no aggressive intentions toward Cuba, and the Pentagon has concluded that Cuba today poses no significant national security threat to the United States. We believe, therefore, that it is in our national interest to promote greater ties and cooperation with the Cuban military. We believe the more confident the Cuban military is that the United States will not take military advantage of a political or economic opening, the more likely it is that elements of the Cuban Armed Forces will tolerate or support such an opening and the less justifiable it will be to divert public resources from social needs to maintaining a defense force far beyond the legitimate needs of the nation. We believe this process should proceed on a step-by-step basis with many of the initial contacts through civilian agencies, both governmental and nongovernmental. We also believe it would be useful for the United States to encourage an opening of relations between militaries in other nations that have carried out successful transitions from communist regimes to democratic societies, such as those in Eastern Europe and, where appropriate, in Latin America. We also recommend that the Pentagon and State Department initiate conversations with the Cuban Armed Forces and others to reduce tensions, promote mutual confidence-building measures, and lay the basis for the improvement of relations in the future should Cuba move towards a democratic transition. 2. Probe Areas for Counternarcotics Cooperation. Cuba sits at the center of a substantial drug trade in the Caribbean Basin. Its neighbor to the east, Haiti, has recently emerged as a major port for cocaine transit from South America to the United States. Despite the outstanding indictments against some Cuban officials for alleged drug trafficking, the Cuban state has both the geographical and institutional resources to help America fight the war on drugs if the Cuban regime chooses to do so. In recent years the United States and Cuba have cooperated on a limited case-by-case basis in counternarcotics efforts in the Caribbean Basin. We recommend that the appropriate U.S. government agencies test Cuba's willingness to take serious steps to demonstrate its good faith in furthering cooperation in the counternarcotics arena, while protecting the confidentiality of U.S. intelligence sources and methods. We note that Cuba still harbors individuals indicted in the United States on serious drug trafficking charges. Clearly, limited cooperation in this area will depend on a demonstrated willingness by the Cuban government to seriously address this issue. 3. Institute Routine Executive Branch Consultations with Congress and Others on Cuba Policy. We recommend continued and enhanced bipartisan consultations by the executive branch with Congress and with a broad range of leaders representing political, social and economic groups in the Cuban-American, humanitarian, religious, academic and cultural communities. As we have seen in U.S. policy toward Central America, and throughout most of the post-Cold War era, a bipartisan consensus between Congress and the executive is a precondition for sustaining a long-term, successful U.S. foreign policy initiative. 4. Form a Working Group on the 21st Century. When people in both the United States and Cuba talk about the future relationship between the two countries, they often speak of the "normalization of relations." In fact, the United States and Cuba have not had 'normal' relations since the United States intervened to end Spanish rule in 1898. Since the current Cuban regime came to power in 1959, it has employed a formidable propaganda machine to cloak Cuban nationalism in a banner of anti-American rhetoric. Cuban schoolchildren are taught to view the Cuban revolution as the only legitimate guarantor of national sovereignty and to regard the United States as a constant threat to Cuba's independence. However opposed the United States has been and remains to the present Cuban government, the American people have no interest in intruding upon Cuba's sovereignty, independence, or national identity. As Cuba inaugurates its second century of independence, we recommend that the Council on Foreign Relations or other similar private institution convene a binational working group of scholars, policy analysts, and others to begin working out an agenda for a new relationship between the United States and Cuba in the 21st century, analyzing a range of complex bilateral and regional issues, including: the resolution of outstanding property claims; the status of the U.S. military base at Guantanamo Bay; the implications for the Western Hemisphere of the restoration of a Cuban sugar quota; the impact on the Caribbean economy of resuming normal bilateral trade relations; Cuban participation in the Caribbean Basin Initiative and the Free Trade Area of the Americas; prospects for Cuba's reentry into the Organization of American States (OAS); and the integration of Cuba into the international financial system. Follow-On Steps: These proposals represent a beginning of what we hope will become a growing bipartisan policy toward Cuba. We believe that responsible officials and interested individuals and groups should monitor the effect of these recommendations, should they be implemented, and after a reasonable period of time assess whether changes, modifications, and additional steps are warranted. 1) The impact of Title II on U.S. policy is disputed. When the president signed Helms-Burton into law, he stated that, "consistent with the Constitution, I interpret the act as not derogating the president's authority to conduct foreign policy." Noting that Title II "could be read to state the foreign policy of the United States," he announced that he viewed the Title II provisions as "precatory," or as a petition by the Congress. Many congressional leaders do not support this view. 2) Current regulations require all individuals wishing to travel to Cuba (with the exception of journalists who may travel without government preclearance under a "general license") to apply for a "specific license," for which applicants must demonstrate a preestablished legitimate professional or research interest in Cuba. Persons traveling under a "general license" to Cuba are not required to clear their plans with the United States government in advance. They are, however, required to certify at reentry to the United States that their travel and activities in Cuba conformed to the purposes for which the licenses are granted; making false statements is a violation of federal law. 3) For instance, identifying the Ministry of Interior as an excluded institution would have the effect of excluding fire departments throughout the island, which in our view are legitimate potential recipients of aid or purchasers of food and medicine. On the other hand, the Ministry of Interior is also responsible for running the Bureau of Prisons, an agency that international human rights groups regularly charge with engaging in repressive activities. Thus, in carrying out this recommendation, the State Department should focus sanctions as specifically as possible on those agencies that are actually responsible for repressive activities. DISCLAIMER AND BACKGROUND ON CFR: The Council on Foreign Relations, Inc., a nonprofit, nonpartisan national membership organization founded in 1921, is dedicated to promoting understanding of international affairs through the free and civil exchange of ideas. The Council's members are dedicated to the belief that America's peace and prosperity are firmly linked to that of the world. From this flows the mission of the Council: to foster America's understanding of its fellow members of the international community, near and far, their peoples, cultures, histories, hopes, quarrels and ambitions; and thus to serve, protect, and advance America's own global interests through study and debate, private and public. THE COUNCIL TAKES NO INSTITUTIONAL POSITION ON POLICY ISSUES AND HAS NO AFFILIATION WITH THE U.S. GOVERNMENT. ALL STATEMENTS OF FACT AND EXPRESSIONS OF OPINION CONTAINED IN ALL ITS PUBLICATIONS ARE THE SOLE RESPONSIBILITY OF THE AUTHOR OR AUTHORS. The Council on Foreign Relations will sponsor an independent Task Force when 1) an issue of current and critical importance to U.S. foreign policy arises, and 2) it seems that a group diverse in backgrounds and perspectives may, nonetheless, be able to reach a meaningful consensus on a policy through private and nonpartisan deliberations. Typically, a Task Force meets between two and five times over a brief period to ensure the relevance of its work. Upon reaching a conclusion, a Task Force issues a Report, and the Council publishes its text and posts it on the Council web site. Task Force Reports can take three forms: 1) a strong and meaningful policy consensus, with Task Force members endorsing the general policy thrust and judgments reached by the group, though not necessarily every finding and recommendation; 2) a Report stating the various policy positions, each as sharply and fairly as possible; or 3) a "Chairman's Report," where task force members who agree with the Chairman's Report may associate themselves with it, while those who disagree may submit dissenting statements. Upon reaching a conclusion, Task Forces may also ask individuals who were not members of the task force to associate themselves with the task force report to enhance its impact. All Task Force reports "benchmark" their findings against current administration policy in order to make explicit areas of agreement and disagreement. The Task Force is solely responsible for its report. The Council takes no institutional position. (end text)