Hurting Friends to Hurt a Foe

Thirty-five years after the Kennedy administration hatched the Alliance for Progress for Latin America, excluding Cuba, and Che Guevara pronounced one of the most scathing denunciations ever by a Latin American government against the United States, Cuba continues to be a bone of contention in hemispheric relations. The Kennedys tried through every conceivable means (and some inconceivable ones, like poisoning Fidel Castro’s cigars) to overthrow the young revolutionary regime in Havana. Now the U.S. government continues to pursue the same aims, probably with no greater success and with less support in Latin America than ever. The implementation of the so-called Helms-Burton law--the Cuban Liberty and Democratic Solidarity Act--has generated a wave of criticism, indignation and rhetoric in the region, as well as in Canada and Europe. It was roundly denounced at Tuesday’s ministerial meeting of the Organization of American States in Panama, despite frenetic U.S. objections.

The law threatens sanctions, ranging from action in U.S. courts to visa cancellations, for companies and individuals of other nations found owning, renting or otherwise doing business with assets formerly owned by Cuban Americans and confiscated after 1959 by the Cuban government. A list of offenders is due from the State Department shortly.

The outrageous extraterritorial, unilateral and retroactive nature of this law shows both the limits and the enduring impact of U.S. influence in the Americas and the rest of the world.

The limits appear clearly in the dysfunction of the U.S. political system. When the United States was a middle-class paradise propelled by a basic agreement on its role in the world, the constitutional arrangements dating back to the 18th century seemed efficient and reasonable. Once things began to change--when the domestic consensus was fractured in Vietnam, when gaping social inequalities began to emerge in the 1980s, when U.S. economic hegemony in the world faded in the face of Europe and Japan’s recovery--that system no longer delivered the goods. Today, its performance has reached an absurd extreme. It allows the minority of a minority, the radical faction of the Cuban American community, to impose its wishes on Congress and the executive branch in a matter that is totally unimportant in itself but very important in its implications for the United States’ trading partners.

The persistent impact of U.S. power in the world can be seen in two additional aspects of the Helms-Burton affair. First, although governments throughout the region and in Europe are condemning the law and its implementation, companies in these same countries are caving in to U.S. pressure even before it is applied. Sadly, but predictably, a Mexican firm was the first to buckle under. On hearing that the State Department would soon be notifying foreign corporations of the risks they were incurring by doing business in Cuba, Cementos Mexicanos (Cemex), Mexico’s virtual cement monopoly and the fourth largest such company in the world, promptly dispatched its owner and director Lorenzo Zambrano to Washington. The billionaire requested and obtained specific instructions on what his firm had to do in order to avoid sanctions, and action was taken immediately to comply. Before the Mexican government could even attempt to persuade Cemex to calm down and in any case not undermine efforts to contest the law, the firm withdrew its employees from the cement plant it was managing in Cuba and canceled its contract. The plant was on land previously owned by and confiscated from an American cement firm, Lonestar, which made Cemex vulnerable. For a company based in Monterrey whose executives and families travel in some cases weekly to Houston and Miami, and which sells a large share of its output in the United States, the prospect of revoked visas was simply unthinkable.

Washington hard-liners and their extremist friends in Miami hailed the Cemex cave-in as proof that the law was working as intended. Which raises the question: Why haven’t Mexico or Canada taken the issue to the North American Free Trade Agreement’s dispute settlement panels, and why haven’t the Europeans taken their case formally to the recently established World Trade Organization? One reason may be that these countries are more scared of winning than of losing. Were either the NAFTA or WTO mechanisms to rule against the United States, declaring the Helms-Burton law incompatible with the treaties governing U.S. membership, the United States’ key trading partners would find themselves in a fine mess. Many Republicans and not a few Democrats in Congress fought the two trade agreements precisely on these grounds: that they would supersede U.S. law and put U.S. policy in the hands of bureaucrats in Geneva or corrupt officials in Mexico. The last thing that Mexico, Canada and the European Union want is to have the United States renege on its acceptance of the dispute settlement mechanisms in NAFTA and WTO. Tempting such a showdown for the sake of a minor matter simply makes no sense.

Overthrowing Castro has been a mainstay of U.S. policy toward Cuba since 1959, and Latin American governments have been expected to assist or at least acquiesce in this policy. None have been terribly cooperative, but few have truly confronted the United States on this matter, either. Today, the U.S. is still bent on a punitive course unworthy of a nation its size, Latin America is discreet in its opposition, and Cuba keeps taunting Washington and Miami, producing the responses it presumably seeks to avoid. After 37 years, sadly, there’s nothing new under this particular sun.