An Embargo Ignored by the World : Cuba: Americans lose out as investors around the world get a jump on our neighbor nation’s changing economy.

The eight-story U.S. Embassy building in Havana is surrounded by scaffolding, I found on a visit this month. Cuban workers are busily renovating the building that our government allowed to run down since the United States began its quarantine and embargo of Cuba more than 30 years ago.

Is President Clinton planning a master stroke of foreign policy, as Richard Nixon did with Communist China and Ronald Reagan with the Evil Empire? In each of these cases, trade and friendship replaced official hostility and thus promoted changes we sought in those regimes without firing a shot.

My second visit to Cuba within a year confirms my view on this page nine months ago: The best way to weaken Castro’s hold on Cuba is to be friendly and trade normally, as we have done with the Soviets, the Chinese and now the Vietnamese as well.

Now, new factors must be taken into account. The Castro regime has weathered the storm caused by the breakdown of the Soviet empire and the loss of its subsidies to Cuba. Investors from Europe, Latin America and Asia are steadily moving in, taking choice positions that Americans are losing because of our embargo. Dollars circulate freely as Cuba opens its markets, offering special favors to foreign investors. New hotels are sprouting across Havana, immediately filling with Europeans enjoying attractive package tours. Nations of the European Union are lending Cuba a hand, and even our trading partners in the North American Free Trade Agreement, Canada and Mexico, are openly circumventing our Cuban policy. More important, Clinton may have parted company with the hard-line anti-Castro Cubans in Miami.

Life is harder on average Cubans but, with new tourist dollars pouring in, bad conditions may have bottomed out. Two economies have emerged: one keyed to the dollar and one to the peso (exchanged at about 35 to the dollar). If you pay in dollars, you can get milk, meat and other scarce foodstuffs. Otherwise, Cuban rations are meager indeed. Only children up to the age of 7 can get milk regularly. One man I spoke with at a government-run store was elated because Cubans were getting a cupful of cooking oil for the first time in three months. After a freewheeling talk about life and times, he invited me home for a cup of coffee--sharing his last ounce of coffee beans. A day later, I stopped by with a two-pound can of imported coffee that I purchased at a dollar outlet. The couple was ecstatic--the wife, an accomplished singer, entertained us for an hour as we celebrated.

There is plenty of grumbling about Fidel Castro, but he seems as secure in power as ever. Indeed, the more that American politicians like Sen. Jesse Helms (R-N.C.) threaten Cuba, the more Cubans rally around the Commandante. With a mischievous smile, one Cuban official said they call Helms “Cuba’s secretary of state.”

Completion of construction on a nuclear energy plant, suspended in 1992 because of a lack of financing, will help liberate the island’s economy from dependence on oil, in limited supply because of the U.S. embargo. This new source of energy will blunt a major U.S. weapon against Cuba’s economy, but a nuclear plant using Russian reactors causes us to worry about a Chernobyl-like accident just 180 miles from Key West.

Italian, French and English firms are hotly competing to finish the nuclear plant. With a change in our policy, we would not have had to cede this project to the Europeans. A high official of the Cuban Nuclear Energy Center told me, “Of course we would like American technology--after all, you guys are next door.”

Now that former Secretary of Defense Robert McNamara has confessed to the utter folly of our involvement in the Vietnam War, the same questions arise about our policy these past 30 years of strangling little Cuba, on our doorstep. For good reason, no country in the world supports our Cuban policy except Israel.

Fidel Castro has learned from experience; one hopes that we have, too.