July 1, 2015 / 11:11 PM / 4 years ago

U.S.-Cuba embassy deal could boost bid to undercut trade embargo

WASHINGTON/HAVANA (Reuters) - An historic agreement to restore diplomatic ties between Washington and Havana could provide fresh momentum for lawmakers and activists seeking to chip away at - and eventually upend - the 53-year-old U.S. trade embargo.

Despite Democratic President Barack Obama’s renewed call to Congress on Wednesday to lift the embargo, he would face resistance from majority Republicans. The White House has offered no sign that he is considering taking further actions on his own.

Even so, the reopening of the U.S. embassy in Havana later this month could encourage investment by American companies that have mostly moved cautiously, despite initial enthusiasm.

Obama has used his executive powers to modestly relax some travel, business and telecommunications restrictions since sealing a diplomatic breakthrough with Cuba in December.

“This is more than symbolism,” said Geoff Thale, program director at the Washington Office on Latin America, a group that advocates U.S.-Cuba détente. “The embassy openings will increase the comfort level for U.S. businesses.”

A full-service U.S. embassy could also help ease the way for more Americans to travel to the Communist-ruled island.

Though U.S. law limits authorized travel to Cuba and bars tourism, thousands more Americans are making their way there anyway by going through third countries like Mexico and Canada.

One Washington attorney involved in Cuba issues called it part of a “non-enforcement protocol” by the U.S. government, though the Obama administration has given no official indication that it is turning a blind eye to such violations.

Some U.S. advocates of full normalization with Cuba hope that the gradual crumbling of such restrictions will lead to the “hollowing-out” of the embargo, which blocks most trade and commercial contact between the two countries.

Several Cuba-related bills have surfaced in Congress in recent months, with a growing number of supporters from both sides of the aisle. A measure pushed by Arizona Republican Senator Jeff Flake calling for an end to the travel ban has attracted more than 40 sponsors.

Minnesota Democratic Senator Amy Klobuchar, who has authored legislation to rescind the embargo altogether, sees the establishment of embassies and restoration of relations as an important step toward further lowering barriers with Cuba.

“I do think that it is gaining more momentum than I thought possible at the beginning,” she said.

Republicans controlling both the Senate and House of Representatives have made clear that, even with divisions forming within their own ranks over the issue, they are unlikely to allow anti-embargo legislation to come to a vote.

Obama could sidestep lawmakers and use his powers to appoint a new envoy to Havana during a congressional recess, but the State Department has suggested the administration is in no rush.

In an open letter to Obama, experts at the Atlantic Council think tank in Washington urged him to take go-it-alone action such as ending a cap on remittances to Cuba and helping to integrate Cuba into international financial institutions like the World Bank, IMF and Inter-American Development Bank.

But remaining differences could give the Obama administration pause before any further significant steps.

Obama, in his Rose Garden appearance, made clear that he would keep up pressure on Cuba over its human rights record, an area of U.S. criticism that has irked the Havana government.

U.S. officials also want to see whether Cuban President Raul Castro will inch forward on reforms despite resistance to loosening the reins on Cuban society and the state-run economy.

At the same time, Cuba insisted on Wednesday that to have normal relations the United States must not only lift the embargo but give up the U.S. naval base at Cuba’s Guantanamo Bay and also stop beaming what it called “subversive” radio and television programming into the island.

U.S. officials made clear that they were not considering acceding to either of those demands.

Additional reporting by Susan Cornwell, Lesley Wroughton and Anna Yukhananov in Washington, David Adams in Miami, Dan Trotta in Cuba; Editing by Stuart Grudgings and Lisa Shumaker

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