Complex Issues, Lingering Obstacles Complicate Outlook for NJ-Cuba Ties

Joe Tyrrell | September 9, 2015 | Politics
State’s large Cuban-American population provides advantage in forging economic links but old animosity toward Castro regime lingers

A street scene -- complete with vintage American automobiles -- in Cuba.
With its large Cuban-American population, experts say northern New Jersey is well-positioned to profit from the Obama administration’s decision to normalize relations with Cuba.

Cuban-Americans are expected to drive trade, due to their familiarity with the island and an ability to forsee opportunities. Small steps are already being taken to investigate ways to do business.

Yet, if the reaction to the Obama order by New Jersey’s politicians are a reflection of the opinions of its constituents, it could be a long time before New Jersey sees any real monetary growth from trade with Cuba.
The North Jersey/New York metropolitan area has the second-largest concentration of Cuban-Americans outside south Florida, according to the U.S. Census Bureau. In 2010, there were more than 83,000 Cuban-Americans in New Jersey.

And businessses in Hudson County and vicinity, which has the highest concentration of Cuban-Americans in the state, should get a head start on breaking down Cold War barriers.

“New Jersey is at the center of all these kinds of connections these days,” said Robert Guild, vice president of Marazul Charters, a Miami-based travel agency with offices in North Bergen, who says bookings are up 40 percent since January.

Even as flags are raised over embassies, though, neither country has chopped down the thicket of bureaucratic regulations and Cold War philosophies that have divided them for 55 years. And, in some parts of the Cuban-American community, longstanding enmity remains an obstacle to opportunity.

“Trade with Cuba is on a slow ferry, not a speedboat, not a cigarette boat,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council. “The velocity of the U.S. business community as it moves into Cuba has to be a sober pace, as opposed to drunk.”

Tough restrictions still in place

Companies hoping to do business on the island “have to be aware that the Treasury Department retains restrictions against Cuba” as it has for decades, Alan Christian, a senior export policy analyst at the U.S. Department of Commerce, told a recent seminar at Fairleigh Dickinson University.

The United States has maintained a welter of trade, investment and travel restrictions against Cuba since shortly after the rise of communist dictator Fidel Castro, whose brother Raúl succeeded him as president in 2008. Castro’s revolution ousted a pro-American dictator, Fulgencio Batista, who fled with a fortune on Jan. 1, 1959.

In July, the two countries announced the restoration of diplomatic relations after talks brokered by Pope Francis, followed by the reopening of their embassies last month. President Obama called the step “a demonstration that we don’t have to be imprisoned by the past.”

Yet even proponents acknowledge significant mistrust remains, particularly in Congress, where New Jersey’s representatives have been in the forefront of the opposition to dismantling the embargo.

U.S. Sen. Robert Menendez (D-NJ), whose parents emigrated from Cuba, called the Aug. 14 reopening of the U.S. embassy in Havana “the embodiment of a wrongheaded policy that rewards the Castro regime’s brutality at the expense of the Cuban people’s right to freedom of expression and independence. “

Rep. Albio Sires (D-5th Dist.), who was 11 when his family left Cuba for the United States in 1962, called the detente “dangerous and premature.”

The United States should insist on the return of fugitives living in Cuba, Sires said. He singled out Joanne Chesimard (Assata Shakur), a black activist convicted of murdering New Jersey State trooper Werner Foerster in a 1973 shootout on the New Jersey Turnpike in East Brunswick.

Former Sen. Robert Torricelli (D-NJ), currently making noises about a political comeback, authored the Cuban Democracy Act in 1992. It prohibited American citizens from traveling to Cuba or sending remittances to relatives there, and also prohibited foreign subsidiaries of U.S. corporations from doing business there.

Illustrating the fact that the gates have not flown open by any means, U.S. Treasury agents last month impounded the bank account of an 89-year-old woman in The Bronx , NY, , after she wrote “Cuba” on a check for her share of a travel reservation, according to a report by WPIX.

The United States still severely restricts tourism to Cuba. Travelers must get licensed by the Treasury Department as part of one of a dozen permitted classes, such as family members, government officials, journalists, religious or educational organizations. The list is on the department’s website.

These remaining obstacles and restrictions may be why some business organizations are playing it close to the vest when it comes to involvement in Cuba.

“We have had some discussion with some of our members who want to learn more,” said Maria Nieves, president and chief executive officer of the Hudson County Chamber of Commerce. But she added that Cuban-Americans are only one of many ethnic groups in the majority Hispanic county.

Still, the chamber is arranging an authorized trip for members next May, because “really, cultural exchange is where business opportunities start,” she said.

Prospects look clearer, but still fraught, from outside perspectives. A Canadian police official, recently returned from a Cuban vacation with colleagues, said it is a favorite destination because it is “warm, friendly and cheap.”

“The Cuban economy is not closed,” said Emily Morris, a research fellow at University College London’s Institute of the Americas. “It’s open to the rest of the world, but inhibited by U.S. sanctions.”

Sanctions still have economic impact

The reach of the sanctions to subsidiaries of American firms and foreign firms with interests here has inhibited the growth of normal economic infrastructure in Cuba, she said. For example, “it’s difficult for even non-U.S. citizens to use credit cards in Cuba” because of American pressure on banks, Morris said.

Cuba has liberalized its economy under Raúl Castro, particularly restaurants, transport and other small businesses formerly run by the state. Meanwhile, its strong healthcare sector provides doctors and other professional services abroad.

But something as basic as setting an exchange rate between the peso and the dollar — now up to 24 times more valuable than its official Cuban price — could prove a major obstacle for officials on both sides who hope to continue the normalization, according to Morris.

On the Cuban side, reservations remain about how to preserve the nation’s revolutionary heritage, which presents a legal minefield for the growing market sector, Morris said. On the American side, some are mired in the views that produced the sanctions, she said.

“The belief that (Cuban) collapse is around the corner is still held by some people, and if you look at the history, you know it’s baseless,” Morris said.

“The Cuban people have a real sense of community and culture,” said Byanjana Thapa, a Fairleigh Dickinson student who participated in an educational program in Cuba organized by the university’s global scholar program. “I don’t often see it around here, but you do see it in Cuba.”

The U.S. Department of Agriculture is also bullish on Cuba. It provided not only a historical perspective on trade between the countries, but an encouraging assessment of current opportunities in a June report.

The USDA notes that America “is already one of Cuba’s leading suppliers of agricultural imports” after the loosening of sanctions on some goods in 2000. From 2003 to 2012, the United States was Cuba’s leading foreign source of agricultural products.

But the USDA is calling for a more balanced policy, since current American laws and regulations provide “few if any opportunities” for Cuban exports.

Major corporations may have big dreams for the Cuban market, but for now, the traffic is smaller in scale, Kavulich said.

Referring to the increasing number of approved charter flights to Havana, “We’re seeing people carrying arc welders, auto equipment, salon supplies,” he said.

Marazul has been operating such flights since 1979, when President Jimmy Carter offered the first relaxation in American attitudes toward the Castro government. The company’s founder, Francisco Aruca, had fled Cuba 20 years earlier. But after years as a prominent anti-Castro voice in Havana, his views softened – earning him death threats and broken windows in Miami.

In New Jersey, the director of a refugee center, Eulalio José Negrín, paid a higher price. He was part of a group that negotiated with Fidel Castro for the release of political prisoners and return visits by Cuban-Americans to the island.

Negrín was shot down in front of his 12-year-old son while getting into this car in Union City. One of his colleagues, a travel agent, met the same fate in Puerto Rico.

So when Guild made a passing reference to Cuba and terrorism, he meant violence originating in the U.S. But now, he said, many Cuban-Americans see restored relations as a way to reunite their families. For the younger generation especially, “It’s about going back to the land of their parents and grandparents,” he said.