Trade with Cuba: Unlearning an Old Lesson

AMERICANS prefer to focus on the present and the future; rarely do they look back. This can sometimes be an advantage and certainly it contributes to the national spirit of optimism. But it also tends to obscure the lessons of history. As a frustrated US diplomat once put it: ``The reason we make the same mistake over and over again is because no one remembers we made it the first time.''

The amendment to the State Department authorization bill introduced by Sen. Connie Mack (R) of Florida is a perfect illustration of our national penchant for ignoring historical antecedents. If the amendment is passed, foreign subsidiaries of American companies will again be prohibited from trading with Cuba. As Senator Mack himself noted in presenting his amendment, it would return the United States to pre-1975 law. Some 82 senators voted to accept the amendment, apparently without asking themselves why the prohibition had been lifted 14 year ago.

Between 1963 and 1975, foreign subsidiaries of US companies, like the parent companies themselves, were strictly forbidden from trading with Cuba. A number of friendly governments complained of this prohibition from its inception, charging that it represented a form of extra-territoriality. After all, the subsidiaries were, these governments pointed out, incorporated in their countries and were expected to obey their laws and trading practices.

By 1975, the situation had become untenable. Canada and Spain were demanding a change. Argentina had signed a trade agreement with Cuba in 1973 and ordered Ford and General Motors of Argentina to sell cars to Cuba as part of that agreement. The unfortunate officials of those companies were caught in a bind. They feared legal action in the US if they provided cars, but possible arrest in Argentina if they did not. Nationalization of the companies, or at least severe sanctions against them, became a live possibility.

Thus, when in the summer of 1975 the Organization of American States voted to lift the so-called multilateral sanctions against Cuba and to leave it to each member state to decide for itself whether it wished to have diplomatic and trade relations with Cuba, President Ford's administration seized the opportunity to lift its own prohibition against any direct commercial relations.

The lifting of the prohibition had nothing to do with any wish to be kind to Cuba; rather, the calculation was that the problems with our allies and trading partners caused by the prohibition far outweighed the marginal gains it produced. A secondary aim was to ease the dilemma in which many of the subsidiary companies found themselves.

Fourteen years later, nothing has changed. All the factors that led to the lifting of the prohibition are still in play. Yet it is proposed that we now undo what the Ford administration wisely decided to do in 1975.

Is this not likely to cause new problems with Canada, Mexico, and other governments? Of course it will. A number of them are expressing deep concern over the implications of the amendment. In its own (unclassified) position papers, the Department of State emphasizes that the legislation would ``likely result in serious trade disputes with some of our allies and major trading partners.''

Hence, the position papers go on to affirm, ``we [the US government] are opposed to the specific provision sponsored by Senator Mack.''

Should that not be the end of the matter? Would Congress really approve a measure that will so obviously cause problems with important allies such as Canada and that is opposed by the administration itself? It might. The State Department had indicated its opposition before the July 20 vote in the Senate. Yet, as noted, 82 senators voted in favor. Several subsequently acknowledged that they had been unaware of the executive branch's opposition, or of all the measure's ramifications. But the result was the same: It passed.

The amendment is now before the House of Representatives. It is to be hoped that the House will give it more careful scrutiny than it received on the Senate side. If not, we will raise anew problems that with good reason were laid to rest in 1975.

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