[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
               U.S. ECONOMIC AND TRADE POLICY TOWARD CUBA

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 7, 1998

                               __________

                             Serial 105-73

                               __________

         Printed for the use of the Committee on Ways and Means

                               ----------

                      U.S. GOVERNMENT PRINTING OFFICE
55-762 CC                     WASHINGTON : 1999




                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa


Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.





                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 21, 1998, announcing the hearing...............     2

                               WITNESSES

 U.S. Department of State, Michael Ranneberger, Coordinator, 
  Cuban Affairs..................................................    57

                                 ______

Alexis de Tocqueville Institution, Philip Peters.................   137
Americans for Humanitarian Trade With Cuba, Craig L. Fuller......   114
Barnes, Hon. Michael, Hogan & Hartson, L.L.P. and USA Engage.....    96
 Berry, Willard M., European-American Business Council...........    80
Center for Strategic and International Studies, Ernest H. Preeg..   143
Cibrian, David J., Jenkens & Gilchrist...........................   133
 Cuban Committee for Democracy, Silvia Wilhelm...................   110
Diaz-Balart, Hon. Lincoln, a Representative in Congress from the 
  State of Florida...............................................    21
European-American Business Council, Willard M. Berry.............    80
 Fuller, Craig L., Americans for Humanitarian Trade With Cuba....   114
 Gary, W. Bradford, Medical Device Manufacturers Association.....   117
 Gerdes, Dan, U.S. Wheat Associates..............................   121
 H Enterprises International, Inc., Richard E. O'Leary...........    75
Kavulich, John S. II, U.S.-Cuba Trade and Economic Council, Inc..    90
 Medical Device Manufacturers Association, W. Bradford Gary......   117
 Menendez, Hon. Robert, a Representative in Congress from the 
  State of New Jersey............................................    24
 Moakley, Hon. John Joseph, a Representative in Congress from the 
  State of Massachusetts.........................................    10
 Muse & Associates, Robert L. Muse...............................    86
 O'Leary, Richard E., H Enterprises International, Inc.; and U.S. 
  Chamber of Commerce............................................    75
 Paparian, Hon. William M., Pasadena, CA.........................   130
Peters, Philip, Alexis de Tocqueville Institution................   137
Preeg, Ernest H., Center for Strategic and International Studies.   143
 Quigley, Thomas E., United States Catholic Conference...........   104
Ros-Lehtinen, Hon. Ileana, a Representative in Congress from the 
  State of Florida...............................................    15
Torres, Hon. Esteban E., a Representative in Congress from the 
  State of California............................................    39
 United States Catholic Conference, Thomas E. Quigley............   104
USA Engage, Hon. Michael Barnes..................................    96
 U.S. Chamber of Commerce, Richard E. O'Leary....................    75
U.S.-Cuba Trade and Economic Council, Inc., John S. Kavulich II..    90
 U.S. Wheat Associates, Dan Gerdes...............................   121
 Wilhelm, Silvia, Cuban Committee for Democracy..................   110

                       SUBMISSIONS FOR THE RECORD

American Farm Bureau Federation, statement.......................   153
Bernstein, Ellen P., Interreligious Foundation for Community 
  Organization, New York, NY, joint statement....................   180
Center for a Free Cuba, Frank Calzon, letter and attachment......   155
Cuban American Alliance Education Fund, Inc., Delvis Fernandez 
  Levy, statement................................................   158
Duke, Maria de Lourdes, Fundacion Amistad, New York, NY, 
  statement......................................................   160
ForCHILDREN, Inc., Arlington, VA, Paul F. McCleary, statement....   159
Fundacion Amistad, New York, NY, Maria de Lourdes Duke, statement   160
General Assembly of the Presbyterian Church (U.S.A.), Louisville, 
  KY, Clifton Kirkpatrick, letter and attachment.................   172
Global Links, Pittsburgh, PA, Brenda L. Smith, statement.........   177
Hamilton, Hon. Lee H., a Representative in Congress from the 
  State of Indiana, statement....................................   178
Interreligious Foundation for Community Organization, New York, 
  NY, Schuyler Rhodes, Lucius Walker, Jr., and Ellen P. 
  Bernstein, joint statement.....................................   180
Iriondo, Sylvia G., Mothers & Women Against Repression for Cuba, 
  Key Biscayne, FL, letter and attachments.......................   191
Kirkpatrick, Anthony F., University of South Florida, College of 
  Medicine, joint statement and attachments......................   183
Kirkpatrick, Clifton, General Assembly of the Presbyterian Church 
  (U.S.A.), Louisville, KY, letter and attachment................   172
Kleczka, Hon. Gerald D., a Representative in Congress from the 
  State of Wisconsin, statement..................................   189
Levy, Delvis Fernandez, Cuban American Alliance Education Fund, 
  Inc., statement................................................   158
McCleary, Paul F., ForCHILDREN, Inc., Arlington, VA, statement...   159
Mississippi Black Farmers and Agriculturists Association, Yazoo 
  City, MS, Lloyd Moore, joint statement.........................   190
Mothers & Women Against Repression for Cuba, Key Biscayne, FL, 
  Sylvia G. Iriondo, letter and attachments......................   191
Olivera, Beatriz M., Harris Kessler & Goldstein, Chicago, IL, 
  statement......................................................   197
Oxfam America, statement.........................................   198
Rhodes, Schuyler, Interreligious Foundation for Community 
  Organization, New York, NY, joint statement....................   180
Serrano, Hon. Jose E., a Representative in Congress from the 
  State of New York, statement...................................   198
Smith, Brenda L., Global Links, Pittsburgh, PA, statement........   177
Trident South Corporation, Yazoo City, MS, Lloyd Moore, joint 
  statement......................................................   190
USA Rice Federation, Arlington, VA, statement....................   199
Vanden, Harry E., University of South Florida, Department of 
  Government and International Affairs, joint statement and 
  attachments....................................................   183
Walker, Lucius, Jr., Interreligious Foundation for Community 
  Organization, New York, NY, joint statement....................   180


               U.S. ECONOMIC AND TRADE POLICY TOWARD CUBA

                              ----------                              


                         THURSDAY, MAY 7, 1998

                  House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 1:05 p.m., in 
room 1100, Longworth Office Building, Hon. Phillip Crane 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON TRADE

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE

April 21, 1998

No. TR-25

                       Crane Announces Hearing on

                        U.S. Economic and Trade

                           Policy Toward Cuba

     Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on 
Trade of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on U.S. economic and trade policy 
toward Cuba. The hearing will take place on Thursday, May 7, 1998, in 
the main Committee hearing room, 1100 Longworth House Office Building, 
beginning at 1:00 p.m.
      
    Oral testimony at this hearing will be from both invited and public 
witnesses. In addition, any individual or organization not scheduled 
for an oral appearance may submit a written statement for consideration 
by the Committee or for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Since the early 1960's, U.S. policy toward Cuba has consisted 
largely of attempting to isolate the island nation through a 
comprehensive economic and trade embargo. The authority for these 
sanctions against Cuba was included in section 620(a) of the Foreign 
Assistance Act of 1961 (P.L 87-195). In 1992, the sanctions were 
strengthened with the enactment into law of the Cuban Democracy Act 
(P.L. 102-484). In particular, the Act extended the prohibitions on 
transactions with Cuba to subsidiaries of U.S. firms in third 
countries. At the same time, the Cuban Democracy Act directs the 
President to take steps to end the trade embargo and to assist a freely 
and democratically elected Cuban government, should one come to power. 
Another component of U.S. policy under the Act consists of support 
measures for the Cuban people, including U.S. private humanitarian 
donations, U.S. Government support for democracy-building efforts, and 
U.S.-sponsored radio and television broadcasting to Cuba (Radio and TV 
Marti).
      
    In 1996, the Cuban Liberty and Democratic Solidarity Act (P.L. 104-
114), often referred to as the ``Helms-Burton'' legislation, was 
enacted to further strengthen U.S. sanctions against Cuba. Among other 
things, Helms-Burton codified all Cuban embargo executive orders and 
regulations in force on March 12, 1996. In addition, the Act allows 
U.S. nationals to sue for monetary damages in U.S. Federal court those 
persons who traffic property confiscated from such U.S. nationals. 
Finally, it denies admission into the United States to certain aliens 
involved in the confiscation or trafficking of U.S. property in Cuba.
      
    Following the enactment of Helms-Burton, many U.S. trading 
partners, including Canada, Japan, Mexico, and the European Union (EU), 
strongly criticized the legislation, arguing that it constitutes an 
extraterritorial application of U.S. law contrary to international 
principles. On November 20, 1996, the World Trade Organization (WTO) 
agreed to a request from the EU calling for the formation of a dispute 
resolution panel on Helms-Burton. On April 21, 1997, the EU notified 
the WTO that it was suspending the dispute panel, pursuant to an 
understanding reached with the United States to develop joint 
disciplines on dealings in property confiscated by Cuba and other 
governments in contravention of international law. After meetings 
between the United States and the EU in December 1997 and March 1998, 
EU officials stated that they would resume the WTO challenge to Helms-
Burton if no permanent solution to the dispute was found. The EU has 
also raised concerns about Helms-Burton and the use of extraterritorial 
sanctions in the context of the Multilateral Agreement on Investment, 
which is being negotiated under the auspices of the Organization for 
Economic Cooperation and Development.
      
    The visit of Pope John Paul II to Cuba on January 21-25, 1998, 
focused public attention on U.S. economic and trade sanctions against 
Cuba. U.S. sanctions do not allow commercial food exports to Cuba, and 
while commercial medical exports are allowed, there are several 
restrictions on such exports as set forth in the Cuban Democracy Act of 
1992.
      
    On March 20, 1998, President Clinton announced four changes in U.S. 
policy toward Cuba. Specifically, the President announced: (1) the 
resumption of licensing for direct humanitarian charter flights to Cuba 
(which had been curtailed after the February 1996 shootdown of two U.S. 
civilian planes), (2) the resumption of cash remittances up to $300 per 
quarter for the support of close relatives in Cuba (which had been 
curtailed in August 1994 in response to the migration crisis with 
Cuba), (3) the development of licensing procedures to streamline and 
expedite licenses for the commercial sale of medicines and medical 
supplies and equipment to Cuba, and (4) a decision to work on a 
bipartisan basis with Congress on the transfer of food to the Cuban 
people.
      
    In announcing the hearing, Chairman Crane stated: ``In the wake of 
the Pope's visit in January, I believe that it is an appropriate time 
for the Subcommittee to review U.S. economic and trade policy toward 
Cuba. I look forward to reviewing the status of our economic and trade 
policy towards Cuba, particularly with respect to the humanitarian 
assistance provided by U.S. citizens to the Cuban people.''
      

FOCUS OF THE HEARING:

      
    The focus of the hearing is to examine: (1) U.S. economic and trade 
policy toward Cuba and the impact of the U.S. embargo on the Cuban 
people, (2) the prospects for future economic relations in light of the 
Pope's recent visit, (3) the status of humanitarian assistance extended 
to the Cuban people, and (4) how U.S.-Cuba policy, particularly the 
Helms-Burton legislation, has affected relations with U.S. trading 
partners.
      

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

      
    Requests to be heard at the hearing must be made by telephone to 
Traci Altman or Bradley Schreiber at (202) 225-1721 no later than the 
close of business, Thursday, April 30, 1998. The telephone request 
should be followed by a formal written request to A.L. Singleton, Chief 
of Staff, Committee on Ways and Means, U.S. House of Representatives, 
1102 Longworth House Office Building, Washington, D.C. 20515. The staff 
of the Subcommittee on Trade will notify by telephone those scheduled 
to appear as soon as possible after the filing deadline. Any questions 
concerning a scheduled appearance should be directed to the 
Subcommittee on Trade staff at (202) 225-6649.
      
    In view of the limited time available to hear witnesses, the 
Subcommittee may not be able to accommodate all requests to be heard. 
Those persons and organizations not scheduled for an oral appearance 
are encouraged to submit written statements for the record of the 
hearing. All persons requesting to be heard, whether they are scheduled 
for oral testimony or not, will be notified as soon as possible after 
the filing deadline.
      
    Witnesses scheduled to present oral testimony are required to 
summarize briefly their written statements in no more than five 
minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED. The full 
written statement of each witness will be included in the printed 
record, in accordance with House Rules.
      
    In order to assure the most productive use of the limited amount of 
time available to question witnesses, all witnesses scheduled to appear 
before the Subcommittee are required to submit 200 copies of their 
prepared statement and an IBM compatible 3.5-inch diskette in ASCII DOS 
Text or WordPerfect 5.1 format, for review by Members prior to the 
hearing. Testimony should arrive at the Subcommittee on Trade office, 
room 1104 Longworth House Office Building, no later than Tuesday, May 
5, 1998. Failure to do so may result in the witness being denied the 
opportunity to testify in person.
      

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit at least six (6) 
single-space legal-size copies of their statement, along with an IBM 
compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 
format only, with their name, address, and hearing date noted on a 
label, by the close of business, Thursday, May 21, 1998, to A.L. 
Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of 
Representatives, 1102 Longworth House Office Building, Washington, D.C. 
20515. If those filing written statements wish to have their statements 
distributed to the press and interested public at the hearing, they may 
deliver 200 additional copies for this purpose to the Subcommittee on 
Trade office, room 1104 Longworth House Office Building, at least one 
hour before the hearing begins.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be typed in single space on legal-size paper and may not exceed a total 
of 10 pages including attachments. At the same time written statements 
are submitted to the Committee, witnesses are now requested to submit 
their statements on an IBM compatible 3.5-inch diskette in ASCII DOS 
Text or WordPerfect 5.1 format. Witnesses are advised that the 
Committee will rely on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, full address, a telephone number where the witness or the 
designated representative may be reached and a topical outline or 
summary of the comments and recommendations in the full statement. This 
supplemental sheet will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__ MEANS/'.
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

                                


    Chairman Crane [presiding]. Good afternoon. This is a 
hearing before the Subcommittee on Trade.
    Mr. Moakley. Hi, how are you doing?
    Chairman Crane. Beg your pardon?
    Mr. Moakley. Is my microphone on? I was checking to see if 
the microphone was on. Thank you, Mr. Chairman.
    Chairman Crane. OK, one, two, three, testing.
    Mr. Moakley. Before I start swearing at some people, I want 
to make sure it's on.
    Chairman Crane. All right. This is a hearing before the 
Subcommittee on Trade on the topic of U.S. trade and economic 
policy toward Cuba. It's a matter of great importance to 
Americans who hope that freedom and democracy will come to this 
island, just 90 miles from our shores. It's also a matter of 
particular importance to the thousands of Cubans who have fled 
the Castro regime, many of whom have become citizens.
    The visit of Pope John Paul II to Cuba in January of this 
year focused public attention on U.S. policy toward Cuba and 
increased general awareness of the daily plight of the Cuban 
people. During the Pope's visit, he described the U.S. embargo 
as something which strikes the people indiscriminately, making 
it even more difficult for the weakest to enjoy the bare 
essentials. The papal comments have raised questions about ways 
of providing humanitarian assistance to the people of Cuba, 
while continuing our efforts to move the Castro government in 
the direction of freedom and democracy.
    The Cuban Liberty and Democratic Solidarity Act of 1996, 
commonly known as Helms-Burton, has affected U.S. relations 
with our trading partners who view the act as an 
extraterritorial application of the U.S. embargo in 
contravention of international law. On this basis, the European 
Union, or EU, filed a case on Helms-Burton against the United 
States at the World Trade Organization. In April 1997, the EU 
suspended its case pursuant to an understanding reached with 
the United States to develop joint disciplines on dealings in 
property confiscated by Cuba and other governments contrary to 
international law.
    The EU last month allowed its WTO case to expire, pending 
continuing negotiations with the United States. But it made 
clear that it would file another WTO case if the United States 
took action against companies in EU member states, under either 
Helms-Burton or the Iran and Libya Sanctions Act.
    I believe it's appropriate for the Subcommittee to examine 
U.S. policy toward Cuba in light of the Pope's recent visit and 
the lingering problems that Helms-Burton has caused the United 
States in our relations with our major trading partners. I 
would like to recognize the contributions made by Mr. Rangel 
and Mr. Neal in raising the issue of our Cuba policy on the 
Subcommittee's agenda and look forward to hearing the testimony 
of our witnesses today.
    And now I'd like to yield to Mr. Rangel for an opening 
statement.
    Mr. Rangel. Thank you, Mr. Chairman. And let me thank you, 
for always being there on issues of trade, to expose our 
witnesses to the best information available in order for us to 
legislate. And I want to thank Mr. Neal for his leadership in 
making certain that our Committee fulfills that responsibility.
    Last January, I was invited by Cardinal O'Connor, with many 
of my colleagues, to travel to Cuba during the visit to the 
island by Pope John Paul. After extensive discussions with a 
variety of high-level Cuban officials, including President 
Castro, it was made abundantly clear to me that the Cuban 
Government was eager not only to have the embargo removed, but 
to normalize relations with the United States.
    The most frequently asked question I heard was, ``What does 
the United States want?'' I made it clear over the years that, 
in my view, it's time to end the U.S. trade embargo. Continued 
sanctions against Cuba hurt us more than they do the Government 
of Cuba, which we designed to bring down, making us the odd man 
out among nations. The embargo remains a convenient tool for 
scapegoating used by those in Cuba who wish to maintain the 
status quo.
    The embargo, especially the Helms-Burton law, has harmed 
our relations with friends and allies around the world by 
imposing extraterritorial restrictions on global trading 
infrastructure, while limiting the ability of American 
businesses to compete freely. The embargo has failed in its 
goal clearly of destabilizing the Cuban Government.
    Today, more and more Americans are wondering why, after 38 
years, our government persists in this unilateral policy of 
isolating Cuba. During these hearings we will hear from 
representatives from the business sector, humanitarian groups, 
the Catholic Church, the Cuban-American community, and they 
will explain their reasons for supporting a change in policy. 
Those of us who have opposed existing policy should certainly 
be encouraged by this impressive turnout.
    The Pope's visit has drawn attention to the issue and 
encouraged more people to speak out. The Pope again chided the 
United States for a policy that he views as inhumane, 
admonished the Cubans to open their society, and improve their 
record on human rights.
    I commend President Clinton for the steps he has taken in 
the wake of the Pope's visit to lessen the humanitarian impact 
of the embargo. The health impact on Cuban children due to 
shortages of food and medicine is beyond dispute. Some would 
argue that the fault is with Cuba's failed Socialist system and 
Castro's position, and not the U.S. embargo. Whatever the case 
may be, except in times of war, it is not the American way of 
doing things--to sit by and witness the suffering of innocents 
while we're in a position to do something about it.
    At this time, I would like to yield time to Mr. Neal in 
support of having this hearing and trying to change this policy 
that we have.
    Mr. Neal. Thank you, Mr. Rangel.
    First, let me thank Chairman Crane and Congressman Joe 
Moakley for the effort that they've made today in ensuring that 
this timely issue be brought once again before the Subcommittee 
on Trade.
    In January, I had the privilege to travel to Cuba with 
Cardinal Law of Boston for the papal visit. It's a trip that I 
never will forget. From my visit, I have reaffirmed my position 
that we need to provide humanitarian assistance to Cuba. I'm a 
cosponsor of the Cuban Humanitarian Trade Act of 1997, which 
would change the terms for exporting food and medicine from the 
United States to Cuba. It's my understanding that even Senator 
Helms is in the process of considering legislation that would 
expand humanitarian aid to Cuba.
    The Cuban-American National Foundation has proposed an 
initiative which would target humanitarian donations to those 
most in need, especially political prisoners and their 
families. This initiative requires assistance to be delivered 
and distributed through internationally recognized 
nongovernmental organizations. The plan would prohibit 
assistance to Communist Party members and require public 
assurance from the Cuban Government that they would not 
interfere with the distribution of that assistance.
    Since the visit of John Paul II to Cuba, attention has been 
focused on humanitarian aid. A March 1997 report by the 
American Association for World Health, severely criticized our 
government for maintaining the embargo restrictions that have 
resulted in shortages of medicines, medical equipment, and 
medical information. These shortages have led to serious 
nutritional deficits. The current licensing requirements are 
burdensome and complex and result in delays and increased cost.
    In the past Cuba largely depended upon Soviet bloc 
countries for trading assistance. In 1990, the Soviets provided 
$3.5 billion in economic assistance and trade subsidies to Cuba 
and about $1 billion in military assistance. Since 1992 the 
Russian Government no longer provides military assistance to 
Cuba and since 1993 Cubans have been allowed to own U.S. 
dollars and self-employment was authorized. Other market-
fronted reforms have also been obtained.
    Certainly life is not easy for the Cubans. On March 20, 
1998, the Clinton administration announced four changes which 
should help Cuba. But these changes are not a shift in U.S. 
policy. These four changes have not yet gone into effect.
    Hopefully, we can learn from this hearing and build upon 
the changes already announced. I think most of us can agree 
that we need to improve humanitarian aid to Cuba and I hope 
that this Subcommittee will once again take the lead on this 
issue.
    I would like to call attention if I can for 1 second, Mr. 
Chairman, to an article that appeared in today's New York Times 
and there's also one in the Washington Post. And while we're 
also sensitive here to headlines and how they relate to the 
stories that follow, the headline here is, ``Star, a Pentagon 
report now belittled the menace posed by Cuba.'' The one thing 
that you're struck by in a visit to Cuba is that they're not 
going to be able to mount any missiles on the back of 1956 
Chevrolets, because that's all they have.
    And the truth is that the Pope has given us an 
extraordinary opening here and I think that whether we can 
argue over humanitarian assistance or lifting the embargo in 
its entirety, we should take advantage of the opening the Pope 
has given us, as well as Cardinals O'Connor and Law and fully 
move in to fill the void that has been created. Thank you 
again, Mr. Chairman, for the prompt manner in which you 
scheduled this hearing.
    My time.
    Mr. Rangel. Mr. Chairman, I ask unanimous consent to enter 
the statement of Congressman Jerry Kleczka into the record.
    Chairman Crane. Yes, and without objection, all Members' 
written testimony will become a part of the permanent record 
too.
    [The opening statements follow:]

Statement of Hon. E. Clay Shaw, Jr., a Representative in Congress from 
the State of Florida

    Mr. Chairman, thank you for agreeing to hold a hearing on 
U.S. economic and trade policy toward Cuba. Because of Cuba's 
proximity to my home state of Florida, this hearing is of 
special importance to my constituents.
    Mr. Chairman, since the visit of His Holiness John Paul II 
to Cuba, the media has been rife with stories about how unfair 
and cruel our economic policy is toward Cuba. Many people 
swayed by these stories have adopted Castro's self-serving 
viewpoint that Cuba's miserable economic performance is due to 
the U.S. trade embargo.
    Unfortunately, what is being glossed over in the embargo 
debate is that the root cause of the misery of the proud Cuban 
people is the dictator Fidel Castro. Anti-embargo groups 
consistently leave out of their arguments any mention of Castro 
subjugating his own people or his disastrous economic policies. 
This overlooking of the realities of Castro's regime by anti-
embargo groups unwittingly (or in some cases, purposely) gives 
credibility to Castro's brutal regime. This credibility in turn 
perpetuates Castro's dictatorship, which of course ensures the 
continued suffering of the Cuban people.
    Perhaps because Castro has been oppressing his people for 
so long, many Americans seem to have forgotten that the rights 
we enjoy are utterly non-existent in Cuba. For example, until 
1976, Castro ruled by decree, which meant in practical 
application that Castro's whims were the supreme law of the 
land. In 1961, representative democracy was abolished (although 
a puppet legislature was later established, falsely named the 
National Assembly of Peoples Power). Political prisoners number 
in the thousands.
    Castro's human rights record is similarly appalling. Under 
his rule, the Cuban people are denied freedom of speech, 
association, assembly and movement. Religious freedom is 
severely restricted, although to Castro's credit, he did allow 
the celebration of Christmas for the first time in years in 
anticipation of the Pope's visit.
    Castro's economic record is as pathetic as his human rights 
record. After the termination of aid from the Soviet Union, 
Cuba's economy actually shrunk between thirty-five and fifty 
percent. Shortages of basic commodities, such as food and fuel, 
are commonplace in this workers' paradise. Again, the root 
cause of the dismal performance of the Cuban economy is not the 
embargo, but Castro's fanatical adherence to now discredited 
Marxist-Leninist theories.
    Castro is a walking anachronism, as outdated as the Chevys 
with fins that still rumble through the streets of Havana. I 
find it rich in irony that Castro, who could have gone down in 
history as the liberator of Cuba, will instead be remembered as 
its enslaver.
    Now in the twilight of his life, Castro will soon join his 
ideological soulmates Stalin, Pol Pot, Kim Il-Jung and 
Ceausescu on the ash heap of history. I predict that in the 
years after his demise, it will be Castro the man--not our 
trade policy--that will be reviled by the Cuban people.
      

                                


Statement of Hon. Jim Ramstad, a Representative in Congress from the 
State of Minnesota

    Mr. Chairman, thank you for calling today's hearing to 
discuss U.S. economic and trade policy toward Cuba.
    The recent visit of His Holiness Pope John Paul II to Cuba 
certainly indicates some level of progress, but how much 
improvement there has actually been for the daily life of the 
Cuban people is hard to determine.
    Equally difficult to determine is how best to craft U.S. 
policies to help the people of Cuba while challenging the Cuban 
government to respect human rights and freedoms and allow Cuban 
citizens to participate in democratic elections.
    I am well aware that our current policies toward Cuba have 
not achieved the goals for which we strive, as quickly as we 
desire. Some believe that current policies can still achieve 
these goals, especially now that the Soviet Union has fallen 
and no longer provides subsidies to the Cuban government. 
Others believe that since the policies have not been 
successful, we should replace them with a new approach.
    Mr. Chairman, for those of us who are frankly undecided as 
to how best to achieve our goals, this hearing will be a great 
opportunity to hear the debate. We all want to do the right 
thing, but it is so hard to tell how Castro will react to any 
changes we make and how the Cuban people will be affected.
    If we lift barriers to selling food and medical supplies to 
Cuba, will the citizens get the food and supplies--or will it 
further exacerbate the two-tiered economy in which the tourists 
and government leadership get everything, but the people get 
little? Will relaxing policies impress upon the Cubans that the 
US wants to help them and is not the scapegoat for their 
society's problems that Castro paints us to be--or will it 
strengthen Castro's stronghold over the Cuban people since he 
will claim to be their victor who stood up to the U.S.?
    I don't know the answers to these difficult questions, but 
I am hoping today's discussions will provide some insight into 
this complicated and serious issue.
    Thank you again, Mr. Chairman, for calling this hearing. I 
look forward to hearing from today's witnesses on what US 
policies will best achieve our goal to help the Cuban people.
      

                                


Statement of Hon. Jennifer Dunn, a Representative in Congress from the 
State of Washington

    Mr. Chairman,
    Thank you for your willingness to continue this 
Subcommittee's efforts to review United States trade policy 
around the world. As a strong supporter of free and open 
international trade, I believe that one of the most effective 
ways to influence other countries' domestic policy is by 
engaging their people in commerce. There is no question, 
however, that some countries present very difficult challenges 
when it comes to the oppression of their people, and their 
stubborn allegiance to failed economic theory. Cuba is such a 
place.
    For over three decades, the United States has been pursuing 
an economic and trade policy towards Cuba that relies on 
isolation as a means of creating internal instability that 
could lead to the overthrow of Fidel Castro. Over time, 
incremental steps have been taken to close loopholes in our 
sanction policy and tighten the noose around the leadership in 
Cuba. The most recent effort, the so-called ``Helms-Burton'' 
legislation passed in 1996, is one that I supported as it 
helped ratchet up the pressure on foreign companies that are 
benefiting from assets once owned by U.S. companies, but were 
stolen by Castro's regime. The objectives of free and open 
elections in Cuba, the release of political prisoners, and the 
legalization of political activity are as vital today as they 
were thirty years ago. Every Member of Congress, as a product 
of an open political process, should embrace them.
    At the same time, however, we must not hesitate to step 
back for a moment to review the results of our efforts. That is 
why hearings such as this one are important. The people of Cuba 
will either be compelled to act against their government 
through frustration with a failed domestic economic policy, or 
their government will be marginalized through foreign 
influences brought about by open trade. What is the pace of 
political change in Cuba, and how much of that can be 
attributed to sanctions? Are those most capable of bringing 
about change on the island fleeing to the United States? What 
is the likelihood that opening up this market for U.S. goods 
and investment will accelerate the pace of change? All of these 
issues should continue to be evaluated and discussed.
    Mr. Chairman, thank you again for your willingness to hold 
a hearing on this important subject. I understand that there 
will be another hearing later this month that will ensure a 
thorough and open debate occurs on this issue. I look forward 
to hearing the many views on our nation's Cuba policy so that 
we will be able to more accurately assess its successes and 
failures.
    Thank you.
      

                                


    Chairman Crane. Mr. Thomas.
    Mr. Thomas. Mr. Chairman, thank you. I just would like to 
refer to the portion of Mr. Neal's testimony indicated, 
alluding to the hearing. I'd like to start the hearing, so I 
have no prepared or opening statement.
    Chairman Crane. All right. We will begin the hearing and I 
would like to first though remind everyone that the hearing 
record will be kept open until May 21 of this year, and invite 
all interested parties who are not testifying to submit written 
testimony for the record. And we have a very full schedule 
today, so I must ask everyone please to monitor the light on 
the dais there, and each person hold his oral comments--
testimony--to 5 minutes. All of your written testimony will 
become a part of the record too.
    And now our distinguished colleague, Mr. Moakley.

  STATEMENT OF HON. JOHN JOSEPH MOAKLEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Moakley. Mr. Chairman, thank you very much--you, Mr. 
Rangel, Mr. Neal, Mr. Thomas, and all the other Members of the 
panel, for holding this hearing today and allowing us to 
testify before your Subcommittee. I commend you for holding 
this hearing, to looking toward our Cuban policy, which 
frankly, I believe, needs to change.
    Mr. Chairman, as you probably know, I visited Cuba this 
January, along with Congressman Rangel, Congressman Neal, and 
many others, during the historic visit of Pope John Paul II. 
Despite the media's decision to turn their coverage to other 
matters, the Pope's visit has done a great deal to teach the 
world about Cuba, highlight its problems, and introduce us to 
its many assets and put a human face on this most mysterious 
and troubling nation.
    Today, many concrete changes have already occurred due to 
the Pope's courageous efforts. Most visibly, Cubans are 
practicing religion more freely in their homeland now, without 
fear or oppression or crackdown.
    During my visit, Mr. Chairman, it was tremendously moving 
to stand in Revolution Square at the papal Mass and see 
Catholics openly expressing their faith for the Pope and their 
God. Many of them just couldn't believe that they were being 
allowed to act so openly. This event was a major step forward 
for Cuba.
    I think it's very important to note the openness that has 
been allowed to continue. We recently saw Catholics freely 
celebrating Easter Sunday on the main streets of Havana and 
small churches of the countryside. Beautiful religious 
processions winding through the Cuban streets, without question 
or comment from the government. It appears, at least for now, 
that Castro's strong hand against religion has softened.
    And I'm very glad that President Clinton has responded to 
the openness in Cuba with several positive steps regarding the 
U.S. policy. I applaud the President for his moves to allow 
direct flights for humanitarian aid, to allow family 
remittances, and to work to ease the licensing process for 
medicines. As I've said many, many times, we aren't responsible 
for the suffering of the Cuban people--Cuba is. But we also 
should make it our policy to do what we can to help those in 
need right now, and our policy just isn't doing that, Mr. 
Chairman.
    The American Association for World Health 5-year study on 
Cuban health care highlighted the desperate plight of the Cuban 
people. According to their expert medical opinion, ``the 
embargo has dramatically harmed the health and nutrition of 
large numbers of ordinary Cuban citizens.'' That's a quote from 
the American Association for World Health. The report went on 
to identify malnutrition, poor water quality, lack of medicines 
and equipment, and the lack of medical information as the major 
causes of the Cuban health care crisis.
    The needs in Cuba are tremendous. New breakthrough 
medicines that combat cancer and AIDS are just not available. 
Doctors reuse disposable gloves until they break. Pacemakers 
for heart patients are virtually impossible to find. Extreme 
shortages in kidney dialysis machines keep patients from 
receiving treatments. And in the children's cancer wards, they 
go without suppressants for children receiving chemotherapy. 
The suffering just goes on and on.
    I believe the steps that President Clinton has taken will 
begin to lessen some of that suffering. Now we need to do more. 
Because while the administration's moves are positive, 
donations will never be able to affect as many people as direct 
sales of foods and medicines. Donations, while very important, 
just don't include those items that are most needed. Only 
through the direct sales of medicines can doctors obtain the 
exact items they need for proper care.
    That's why I'm proud to be a cosponsor of H.R. 1951, the 
Cuban Humanitarian Trade Act. This legislation will remove U.S. 
trade restrictions on the sale of food and medicine to Cuba.
    I'd like to say a word about the suffering I just 
mentioned. While I was in Cuba, I visited a pediatric hospital 
just outside of downtown Havana. I walked along the wards and I 
stopped in to visit with the sick children and their parents 
who were acting as nurses. This was real life. There were no 
politics there, no state symbols, no speeches. And I listened 
carefully to the young mothers describing their children's 
unwarranted suffering and pain. Many of the children that I 
visited that day had fairly common diseases and disorders that 
are easily curable using modern techniques and medicines.
    In the United States we have the best medicines, the best 
medical training, and the most innovative medical devices in 
the world. But the sad truth is that most of those items are 
just not available to these tiny Cuban children, due to the 
embargo.
    I vividly recall, Mr. Chairman, one child that I will 
never, never forget. This particular boy had a tracheotomy, he 
had a heart disorder that is widely treated by the insertion of 
some plastic shunt. But that simple device, so plentiful 90 
miles away in America, was not available in Cuba. So this 
helpless boy spent 86 days in intensive care, nearly died, and 
during the terrible ordeal, the boy lost a lung and will have 
continued health problems for years to come. That young mother 
told me she didn't understand why they couldn't get that piece 
of plastic. She looked to me for answers, Mr. Chairman--I had 
none.
    I know opponents would say there's no embargo on medicine. 
They will say, anything can be obtained with a license, but the 
fact is that's just not happening. The process is extremely 
slow and difficult, and most U.S. companies don't even try. Now 
those facts are often disputed, but here, even the most 
generous estimates say that we have only issued 27 licenses for 
the commercial sale of medicines over the past 6 years. For a 
country with the medical needs of Cuba, that's not a hell of a 
lot of medicine.
    There are many reasons why the licensing process doesn't 
work. For one, U.S. companies don't want to go through the 
difficult steps and the paperwork. And many U.S. corporations 
don't even know they can sale to Cuba through a license. 
Opponents will say the Cubans can go to any country in the 
world and get these medicines. That's true. But the problem is 
the United States is the leader in medicines, medical supplies, 
medical techniques, and everything else that has the prefix med 
before it. And the fact is that Cuba needs our innovative 
products and ideas, because quite simply, we're the best and 
we've got the corner on the market, and those other countries 
know that they can't get it from America and therefore they can 
charge higher and higher prices.
    Furthermore, Mr. Chairman, we passed a law in 1992 that 
prevents subsidiaries abroad from doing business in Cuba. And 
as the economy has gotten more and more global, U.S. 
pharmaceutical and medical supplies companies have increased 
their share of ownership around the world. Today, U.S.-owned 
subsidiaries dominate the market abroad. So when Cuba looks 
abroad for medicines, they run into more roadblocks.
    Mr. Chairman, the Pope's visit has created an atmosphere of 
change in Cuba that hasn't been there since the revolution. And 
I don't think things will go back to the way of the past. It's 
very hard to put that genie back in the bottle, they say.
    So we need to move forward. And I think the time has come 
to lift the embargo on food, lift the embargo on medicine, and 
allow the Cuban people access to the best medical and the best 
food supplies that we in the United States have to offer.
    We need to engage Cuba so that we can affect change now and 
in the future when the political status quo is gone. Our 
isolationism for the last 38 years has done nothing to change 
Cuba. In fact, I believe, that's the only reason that Castro 
has been able to stay in power for so long. Quite simply, our 
embargo policy has given him an enemy to point to and a 
superpower to blame for his poor economy.
    Now a historic opportunity is upon us. We need to be part 
of Cuba's changing political and social situation by engaging 
in a dialog of thoughts and a dialog of ideas. We need to be 
ready for the day when Castro is gone. And after Castro, 
there's a giant vacuum of leadership in Cuba and nobody really 
knows for sure who will fill that vacuum. Continuing our 
current policy leaves us without any influence and we'll have 
no say in the future political leadership of our neighboring 
island.
    But, Mr. Chairman, by engaging Cuba now, the United States 
could have a hand in the future and could work to bring 
democratic ideals to the Cuban people. Lifting restrictions on 
food, lifting restrictions on medicine, is a good way to begin 
that engagement.
    So, Mr. Chairman, again I commend the Subcommittee for 
holding the hearing and allowing me to testify. We must 
remember, Mr. Chairman, that children do not understand 
politics or embargoes. But children do feel suffering and 
children do feel pain. And I'll say again, the Cuban people's 
suffering is not our fault, but I think the United States has a 
responsibility not to make things worse. We have that 
responsibility all over the globe, Mr. Chairman. I've met the 
Cuban people, I've sat in their homes, I've eaten with them, 
I've listened to them, and I've listened to their concerns, and 
I know they deserve at least that much.
    So, Mr. Chairman, our Cuban policy is 38 years old and it 
hasn't worked. In fact, it's a total disaster. If our policy 
was a Fortune 500 company, it would have been bankrupt years 
ago. No one in this room can honestly say that we're hurting 
Castro--he's not starving. And I believe it's time for change. 
I look forward to working with you and our colleagues in the 
Congress to bring about change in Cuba and create a policy that 
finally makes a difference in Cuba where it matters with the 
people. Thank you very much, Mr. Chairman.
    [The prepared statement follows:]

Statement of Hon. John Joseph Moakley, a Representative in Congress 
from the State of Massachusetts

    Chairman Crane, Congressman Rangel, Congressman Neal, 
members of the committee, thank you for allowing me to testify 
before your subcommittee today regarding the United States' 
policy toward Cuba. I commend you for holding this hearing to 
look into our Cuba policy, which, frankly, needs a change.
    Mr. Chairman, as you know, I visited Cuba this January 
during the historic visit of Pope John Paul II. Despite the 
media's decision to turn their coverage to other matters, the 
Pope's visit has done a great deal to teach the world about 
Cuba, highlight its problems, introduce us to its many assets, 
and put a human face on this most mysterious and troubling 
nation.
    Today, many concrete changes have already occurred due to 
the Pope's courageous efforts. Most visibly, Cuban's are 
practicing religion more freely in their homeland now, without 
fear of oppression or crackdown.
    During my visit, it was tremendously moving to stand in 
Revolutionary Square, at the Papal Mass, and to see Catholics 
openly expressing their faith for the Pope and their God. Many 
of them couldn't believe they were being allowed to act so 
openly. This event was a major step forward for Cuba.
    I think that it is very important to note that the openness 
has been allowed to continue. We recently saw Catholics freely 
celebrating Easter Sunday in the main streets of Havana, and in 
the small churches of the countryside. Beautiful religious 
processions wound through the Cuban streets without question or 
comment from the government. It appears, at least for now, that 
Castro's strong hand against religion has weakened.
    And I am very glad that President Clinton has responded to 
the openness in Cuba with several positive steps regarding the 
United States' policy. I applaud the Clinton administration for 
its moves to allow direct flights for humanitarian aid, to 
allow family remittances and to work to ease the licencing 
process for medicines. As I've said many times, we aren't 
responsible for the suffering of the Cuban people--Cuba is. 
But, we also should make it a policy to do what we can to help 
those in need. Right now, our policy isn't doing that.
    The American Association for World Health's five-year study 
on the Cuban health care system highlighted the desperate 
plight of the Cuban people. According to their expert medical 
opinion, the embargo has ``dramatically harmed the health and 
nutrition of large numbers of ordinary Cuban citizens.'' The 
report went on to identify malnutrition, poor water quality, 
lack of medicines and equipment, and the lack of medical 
information as the major causes of the Cuban health care 
crisis.
    The needs in Cuba are tremendous. New, breakthrough 
medicines that combat cancer and AIDS are not available, 
doctors re-use disposable gloves until they break, pacemakers 
for heart patients are virtually impossible to find, extreme 
shortages in kidney dialysis machines keep patients from 
receiving treatments, and children's cancer wards go without 
nausea suppressants for children receiving chemotherapy. The 
suffering goes on and on.
    I believe the steps that President Clinton has taken will 
begin to lessen some of that suffering. Now, we need to do 
more, because while the Administration's moves are positive, 
donations will never be able to affect as many people as direct 
sales of food and medicines. Donations, while very important, 
do not always include those items that are most needed. Only 
through the direct sale of medicines can doctors obtain the 
exact items they need for proper care. That is why I am a proud 
co-sponsor of H.R. 1951, the Cuban Humanitarian Trade Act, 
legislation that will remove U.S. trade restrictions on the 
sale of food and medicine to Cuba.
    I want to say a word about the suffering I just mentioned. 
While I was in Cuba recently, we visited a pediatric hospital, 
just outside of downtown Havana. We walked along the wards, and 
stopped in to visit with the sick children and their parents. 
This was real life--there were no politics here, no state 
symbols, no speeches. I listened carefully to the young 
mothers, describing their children's unwarranted suffering and 
pain.
    Many of the children that I visited that day had fairly 
common diseases and disorders that are easily curable using 
modern techniques and medicines. In the United States we have 
the best medicines, the best medical training, and the most 
innovative medical devices in the world. But, the sad truth is 
that most of these items are not available to these tiny Cuban 
children, due to the embargo.
    I vividly recall one child that I will never forget. This 
particular little boy had a heart disorder that is widely 
treated using the insertion of a plastic shunt. But, that 
simple device is made in America, and therefore not available 
in Cuba. So this helpless child spent 86 days in intensive 
care--and nearly died. During that terrible ordeal, the little 
boy lost a lung, and will have continued health problems for 
years to come. His young mother told me she didn't understand 
why they couldn't get that piece of plastic. She looked to me 
for answers, Mr. Chairman--I had none.
    I know opponents will say there is no embargo on medicine. 
They will say anything can be obtained with a licence. But the 
fact is, that's just not happening. The process is extremely 
slow and difficult, and most U.S. companies don't even try. 
Now, the facts are often disputed here, but even the most 
generous estimates say that we have only issued 27 licenses for 
the commercial sale of medicines over the last six years. For a 
country with the medical needs of Cuba, that's not a lot of 
medicine.
    There are many reasons why the licencing process doesn't 
work. For one, U.S. companies don't want to go through the 
difficult steps and the paperwork. And many U.S. corporations 
don't even know they can sell to Cuba through a licence.
    Opponents will also say that Cuba can go to any other 
country in the world to buy medicines. That is true, but the 
problem is that the United States is the leader in medicines, 
medical supplies, medical techniques, and everything else that 
has the prefix med- before it. The fact is that Cuba needs our 
innovative products and ideas, because, quite simply we're the 
best and we've got the corner on the market.
    Furthermore, we passed a law in 1992 that prevents 
subsidiaries abroad from doing business in Cuba. As the economy 
has gotten more and more global, U.S. pharmaceutical and 
medical supply companies have increased their share of 
ownership around the world. Today, U.S. owned subsidiaries 
dominate the market abroad. So, when Cuba looks to other 
countries for medicines they often run into more roadblocks.
    Mr. Chairman, the Pope's visit has created an atmosphere of 
change in Cuba that hasn't been seen since the revolution. And, 
I don't think things will go back to the ways of the past. It's 
too hard to ``put the genie back in the bottle'', as they say. 
So we need to move forward. I think it is time we lift the 
embargo on food and medicines and allow the Cuban people access 
to the best medical and food supplies we have to offer.
    We need to engage Cuba so we can effect change now, and in 
the future when the political status quo is gone. Our 
isolationism of the last 38 years has done nothing to change 
Cuba--in fact I believe it is one reason Castro has been able 
to stay in power for so long. Quite simply, our embargo policy 
has given him an enemy to point to.
    Now, we have a historic opportunity before us. We need to 
be part of Cuba's changing political and social situation by 
engaging in a dialogue of thoughts and ideas. We need to be 
ready for the day when Castro is gone. After Castro, there is a 
giant vacuum of leadership in Cuba. No one really knows for 
sure who will fill that vacuum. Continuing our current policy 
leaves us without any influence. We will have no say in the 
future political leadership of our neighboring island. But, by 
engaging Cuba now, the United States will have a hand in the 
future, and can work to bring democratic ideals to the Cuban 
people. Lifting restrictions on food and medicine is a good way 
to begin that engagement.
    So, again Mr. Chairman, I commend you and the Subcommittee 
for holding this hearing, and allowing me to testify today. We 
must remember, Mr. Chairman, that children do not understand 
politics or embargoes. But children do feel suffering--they do 
feel pain. I'll say again that the Cuban people's suffering is 
not our fault, but I think the United States has a 
responsibility not to make things worse. We have that 
responsibility all over the globe. I've met the Cuban people, 
sat down in their homes with them, and listened to their 
concerns--I know they deserve at least that much from us.
    Mr. Chairman, our Cuba policy is 38 years old and it just 
hasn't worked. In fact, it's a complete failure. If our policy 
was a fortune 500 company, it would have been bankrupt years 
ago. No one in this room can honestly say we're hurting 
Castro--he's certainly not starving. I believe it's time for a 
change. I look forward to working with you and our colleagues 
in the Congress to bring about change in Cuba, and to create a 
policy that finally makes a difference in Cuba where it 
matters--with the people.
    Thank you.
      

                                


    Chairman Crane. Thank you, Mr. Moakley.
    Ms. Ros-Lehtinen.

  STATEMENT OF HON. ILEANA ROS-LEHTINEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Ms. Ros-Lehtinen. Thank you so much, Chairman Crane.
    Before I begin my statement, I would like to express my 
regret that this hearing does not provide a balanced 
presentation. It has three private panels full of individuals 
who appear to advocate sanctions being lifted on Castro and 
removal of U.S. pressure on Castro. There are 14 private 
witnesses who appear to be against U.S. policy and 0 private 
witnesses who support it.
    At the last minute, two to three pro Helms-Burton witnesses 
were invited to essentially serve as tokens in a titled biased 
panel. They preferred not to be used as props in order to give 
a semblance of fairness that is totally lacking in this 
hearing. They did not want to be used and manipulated in this 
way.
    This hearing does not accurately reflect the views of the 
majority of the U.S. Congress, nor the overwhelming majority of 
the Cuban-American community. And although we are grossly 
outnumbered here today, the three Members of Congress, Mr. 
Diaz-Balart, Mr. Menendez, and myself, who represent a huge 
Cuban-American constituency, are here to speak on behalf of 
many in our districts who have a strong desire for freedom, for 
human rights, for democracy in Cuba, and who support current 
U.S. policy.
    Mr. Chairman, there is no openness of any kind in Cuba. The 
Castro regime has repeatedly stated that the revolution and his 
regime will not change. Those who want to trade and engage with 
Castro remind me of overeager Boy Scouts who want to help a 
little old lady cross the street, where she does not want to 
go.
    Castro has repeatedly said that he does not want to cross 
the street. He will not change. Two weeks ago, the dictator 
again emphasized that, ``we are not going to change. We are 
going to continue defending our cause and our socialism.'' 
President Clinton said yesterday in a press conference, that he 
is hearing contradictory signals from Cuba. The President must 
need to recharge the batteries in his hearing aid, because 
Castro's signals are very loud and very clear--we will not 
change.
    Despite the claims of those who wish to engage with Castro, 
U.S. policy is working. For example, yesterday the Pentagon 
released a report that classified Cuba as a negligible military 
threat to the United States. The Castro regime, however, is 
still involved in the illegal narcotics trafficking, has strong 
ties to guerrilla groups in Latin America, continues the 
Lourdes spy station, and wants to complete a dangerous nuclear 
power plant. He gives safe harbor to 90 U.S. felons.
    However, if it does not pose a military threat, it is 
because U.S. sanctions have crippled the Castro regime from 
building its forces and arsenal. Without U.S. sanctions, Castro 
would have had more cash available to maintain and strengthen 
its military capabilities.
    If critics of U.S. policy are not going to use this 
Pentagon report to advocate a change in U.S. policy, they 
should first remember that Haiti, South Africa, and Bosnia, all 
countries the United States has imposed sanctions on, did not 
pose a military threat to the United States. U.S. policy was 
driven by a moral commitment to democracy and human rights.
    U.S. policy toward Cuba is not and should not be about 
money. U.S.-Cuba policy emerged from a condemnation of the 
oppression, subjugation, and enslavement of the Cuban people. 
The United States should not be an accomplice to the torturing, 
mutilation, and execution of political prisoners.
    The United States must not be a part of a system of 
apartheid that the Castro regime has imposed on its people. 
Yes, apartheid lives in Castro's Cuba, yet those who condemn 
apartheid in South Africa, do not seem affected by its 
existence in Cuba.
    The Castro regime discriminates against its own people in 
favor of the tourist, discriminates against the general 
population in favor of high-ranking Communist Party officials. 
The Castro regime does not allow Cubans to use the hotels they 
build or eat in the tourist restaurants, or even use those 
beaches where the hotels are located. Tourist pharmacies and 
hospitals in Cuba are filled with modern medicine, but Castro 
denies the Cuban people access to all of these. Medicine is 
used as a form of torture by the Castro regime to force the 
people into submission. Dissident doctors are arrested for 
helping those left to suffer by the regime.
    Those who argue that U.S. policy denies food and medicine 
to the Cuban people, I say, the time has come to stop the lies. 
No more distortion, no more misinformation. The Libertad Act 
and previous U.S. policy, as is shown there in one of the 
charts, authorizes the donation of food and medicine to Cuba. 
The fact is that criticism against U.S.-Cuba policy has nothing 
to do with humanitarian concerns. Some pharmaceutical companies 
have told Commerce officials that they are not interested in 
Cuba, because there is no demand, no market, no money to be 
made.
    The fact is that many of the same individuals who are 
against U.S.-Cuba policy were in favor of sanctions against the 
apartheid government in South Africa, or in Haiti, or in 
Bosnia. Are the Cuban people any less worthy? Does their 
suffering not merit punitive action against their oppressor?
    How many more Cubans will have to die in Castro's jails 
before the international investor sees that every dollar that 
he gives to Castro is used against the Cuban people? How many 
more children, like the ones who are pictured right there in 
those charts, will have to die in the waters trying to flee the 
dictatorship? How many more men, women, and children will have 
to be killed by the Cuban Coast Guard, as was the case of the 
March 13 tugboat, the youngest victim who you see pictured 
there? What was their crime? They dared to leave Cuba and for 
that, they were murdered. How many more American citizens will 
have to be shot down by the Castro military as occurred on 
February 24, 1996?
    Nothing has changed in Cuba since the Pope's visit in 
January. The repression has indeed intensified. Even during the 
Pope's Mass in Havana, Cuban security forces arrested several 
of the faithful for yelling, ``down with Fidel, and we want 
justice and freedom.''
    When the Canadian Prime Minister went to Cuba last week, 
the New York Times reported that he obtained commitments from 
Cuba to negotiate a foreign investment protection with Canada. 
But, the newspaper continued, on human rights, he failed to win 
any concession. Now it is being reported that the handful of 
political prisoners are to be released and sent to Toronto next 
week.
    But let us not be fooled by cosmetics and temporary staged 
shows of so-called cooperation. While the Castro regime may 
release 70 prisoners today, and not all of them prisoners of 
conscience, state security forces will tomorrow jail 50, 60, 70 
others who've had the courage to stand up to the oppression and 
exert their right as human beings.
    If one looks carefully at the pattern established by Fidel 
Castro, it becomes abundantly clear that Castro treats 
political prisoners as trinkets, tokens to be bestowed upon 
visiting dignitaries. In fact, when I hear of a VIP going to 
Cuba to meet with Castro, I think, well at least a few brave 
souls will leave their squalid jail cells to rejoin the 11 
million who remain enslaved in the island. But before the 
planes of these dignitaries reach their ground back home, a few 
more innocent victims will quickly replace them in those jail 
cells.
    Engagement with Castro will only guarantee the continuation 
of the current totalitarian regime. It will delay, rather than 
accelerate, a transition to democracy and will strengthen the 
security apparatus and increase the intimidation and oppression 
to keep the Cuban people in line.
    In conclusion, Mr. Chairman, we must decide whether we want 
to be on the side of righteousness and justice, on the side of 
the Cuban people, or if we want to allow Castro's crimes 
against inhumanity to go unpunished. For if by trading with 
Castro, we want to provide him with the means to continue his 
reign of terror, we know what the answer must be. I ask you to 
please side with the Cuban people and not allow any weakening 
of our sanctions against the Castro regime.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Hon. Ileana Ros-Lehtinen, a Representative in Congress 
from the State of Florida

    Mr. Chairman, there is no openness of any kind in Cuba. The 
Castro regime has repeatedly stated that the Revolution and his 
regime will not change.
    Those who want to trade and ``engage'' with Castro remind 
me of overeager Boy Scouts who want to help a little old lady 
cross the street. But Fidel Castro has repeatedly stated he 
does not want to cross the street; he does not want to change. 
Two weeks ago, Castro emphasized that: ``We are not going to 
change. We are going to continue defending our cause and our 
socialism.''
    Despite the claims of those who wish to ``engage'' with 
Castro, U.S. policy is working. For example, yesterday, the 
Pentagon released a report that classified Cuba as a 
``negligible military threat'' to the U.S. The Castro regime is 
still involved in illegal narcotics trafficking, in supporting 
terrorism, in supporting the Lourdes spy station, and in the 
condition of a dangerous nuclear power plant. However, if it 
does not pose a military threat, it is because U.S. sanctions 
crippled the Castro regime from building its forces and 
arsenal. Without U.S. sanctions, Castro would have had more 
cash available to maintain and strengthen its military 
capabilities.
    If critics of U.S. policy are now going to use this 
Pentagon report to advocate a change in U.S. policy, they 
should first remember that Haiti, South Africa, and Bosnia--all 
countries the U.S. imposed sanctions on--did not pose a 
``military'' threat. U.S. policy was driven by a moral 
commitment to democracy and human rights.
    U.S. policy toward Cuba is not and should not be about 
money. U.S.-Cuba policy emerged from a condemnation of the 
oppression, subjugation, and enslavement of the Cuban people. 
The U.S. should not be an accomplice to the torturing, 
mutilation, and execution of political prisoners. The U.S. must 
not be a part of the system of apartheid that the Castro regime 
has imposed on its people.
    Yes, apartheid lives in Castro's Cuba. Yet, those who 
condemned apartheid in South Africa, do not seem affected by 
its existence in Cuba. The Castro regime discriminates against 
its own people in favor of tourists; discriminates against the 
general population, in favor of high ranking Communist party 
officials.
    The Castro regime does not allow Cubans to enter the hotels 
they build, or eat in tourist restaurants, or even use those 
beaches where the hotels are located. Tourist pharmacies and 
hospitals in Cuba are filled with modern medicine, but Castro 
denies the Cuban people access to all of these. Medicine is 
used as a tool of torture by the Castro regime to force the 
people into submission. Dissident doctors are arrested for 
helping those left to suffer by the regime.
    To those who argue that U.S. policy denies food and 
medicine to the Cuban people, I say: the time has come to stop 
the lies. No more distortion. No more misinformation.
    The Libertad Act and previous U.S. policy specifically 
authorizes the donation of food and medicine to Cuba. In fact, 
the U.S. has authorized over $2 billion dollars in humanitarian 
aid to the island. To date, the Commerce Department has 
approved 463 licenses, 373 of which were donations and the 
remainder were licensed medical exports. U.S. law provides for 
a system of licensing and on-sight verification which ensures 
that the aid is reaching the intended recipients and not being 
stolen by the regime and resold in foreign markets or in 
tourist pharmacies.
    The fact is that criticism against U.S.-Cuba policy has 
nothing to do with humanitarian concerns. Some pharmaceutical 
companies have told Commerce officials that they are not 
interested in Cuba because ``there is no demand; no market; no 
money to be made.''
    The fact is that many of the same individuals who are 
against U.S.-Cuba policy were in favor of sanctions against the 
apartheid government in South Africa, or in Haiti, or Bosnia.
    Are the Cuban people any less worthy? Does their suffering 
not merit punitive action against their oppressor? How many 
more Cubans will have to die in Castro's jails before 
international investors see that every dollar they give to 
Castro is used against the Cuban people? How many more children 
like the ones pictured here will have to die in the waters of 
the Atlantic and Gulf of Mexico trying to flee the 
dictatorship? How many more men, women and children will have 
to be killed by the Cuban Coast Guard as was the case with the 
March 13th tugboat--the youngest victims pictured here? How 
many more American citizens will have to be shot down by the 
Castro military as occurred on February 24th, 1996?
    Nothing has changed in Cuba since the Pope visited in 
January. The repression has intensified. Even during the Pope's 
mass in Havana, Cuban security forces arrested several of the 
faithful for yelling: ``Down with Fidel'' and ``We want justice 
and freedom.''
    When Canadian Prime Minister Chretien went to Cuba last 
week, the New York Times reported that he obtained 
``Commitments from Cuba to negotiate a foreign investment 
protection agreement with Canada... but on human rights, Mr. 
Chretien failed to win any concession.'' Now, it is being 
reported that a handful of political prisoners are to be 
released and sent to Toronto on Monday of next week.
    Let us not be fooled by cosmetics and temporary, staged 
shows of so-called ``cooperation.'' While the Castro regime may 
release 70 prisoners today (not all prisoners of conscience), 
state security forces will tomorrow jail 50, 60, 70 others who 
have the courage to stand up to the oppression and exert their 
rights as human beings.
    If one looks carefully at the pattern established by Fidel 
Castro, it becomes abundantly clear that Fidel Castro treats 
political prisoners as trinkets--tokens to be bestowed upon 
visiting dignitaries. In fact, whenever I hear of a VIP going 
to Cuba to meet with Castro, I think ``well, at least a few 
brave souls will leave their squalid jail cells to rejoin the 
11 million who remain enslaved in the island.'' But before the 
planes of these dignitaries reach ground back home, a few other 
innocent victims will quickly replace them in those jail cells.
    Engagement with Castro will only guarantee the continuation 
of the current totalitarian regime; will delay, rather than 
accelerate, a transition to democracy; and will strengthen the 
security apparatus and increase the intimidation and oppression 
to keep the Cuban people ``in line.''
    We must decide whether we want to be on the side of 
righteousness and justice; on the side of the Cuban people; or 
if we want to allow Castro's crimes against humanity to go 
unpunished; if, by trading with Castro, we want to provide him 
with the means to continue his reign of terror.
    We know what the answer must be. I ask you to please side 
with the Cuban people and not allow any weakening of our 
sanctions against the Castro regime.
      

                                


    Chairman Crane. Thank you, Ileana.
    Mr. Diaz-Balart.
    Mr. Moakley. Mr. Chairman, we're meeting in Rules 
Committee. Is it all right if I excuse----
    Chairman Crane. Certainly.
    Mr. Moakley. Thank you very much.
    Mr. Thomas. May I ask the gentleman a question or two, if 
he's going to be leaving?
    Chairman Crane. If you could wait just 1 second.
    Mr. Moakley. Sure.
    Chairman Crane. Go ahead, fire away.
    Mr. Thomas. I was very moved by your testimony Joe, and 
obviously, knowing you as a person--the compassionate person 
that you are--and it was reflected in your testimony. I guess 
what I would ask you then, based upon the plea that was your 
testimony, what should someone say to the family of an American 
who is shot down in cold blood by Castro?
    Mr. Moakley. I don't have an answer for that either.
    Mr. Thomas. What do you say to someone who believes that, 
if they practice their religion as a priest and that they 
happen to be an American in Cuba and they deal in 
antigovernment action by passing out information stressing 
freedom, their visa is denied?
    Mr. Moakley. I abhor that. I think that's terrible. But we 
shouldn't allow the Cuban people to be sacrificial pigs because 
of these things.
    Mr. Thomas. I understand that.
    Mr. Moakley. We should treat them like any other human 
being.
    Mr. Thomas. And in that regard, having visited a hospital, 
did you also visit a prison while you were there?
    Mr. Moakley. No, I didn't.
    Mr. Thomas. You didn't visit a prison.
    Mr. Moakley. No, I met with dissidents who thought the 
embargo was a bad idea and I met people who served many years 
in jail that felt the embargo was a bad idea. No, I didn't meet 
prisoners. I was down there for 4 days and I was very busy, but 
never got to a prison.
    Mr. Thomas. My concern is that compassion is critical, but 
compassion has to be all encompassing.
    Mr. Moakley. I agree.
    Mr. Thomas. I do think your testimony was compassionate, 
but I thought it was pretty much one-way compassionate. And 
until we understand that this problem is far more complex than 
the kind of strong emotional, compassionate position that you 
presented, it's going to be even more difficult in resolving 
the problem. But I do share with you a concern about what's 
going on down there for all Cubans.
    Mr. Moakley. Well, I'll tell you, Mr. Thomas, when I walked 
through that ward and saw that kid with the tracheotomy, and 
his mother acting as a nurse, and the doctor telling me for the 
lack of a 6-inch plastic shunt this boy was in intensive care 
for 83 days, and lost his lung, there's something wrong with 
the system.
    Mr. Thomas. And had you gone to a prison, perhaps having 
seen someone beaten for what they believed in--all they 
believed----
    Mr. Moakley. Absolutely. No, I agree with you.
    Mr. Thomas [continuing]. Was a desire to be free. But 
someone whose throat was slit because their crime or sin was 
wanting to be free----
    Mr. Moakley. I think that's terrible too. But I don't think 
we should not----
    Mr. Thomas. I'm only saying that testimony was very 
compassionate, but I basically felt it was compassionate in one 
direction and thought if I asked you these questions, I would 
get the answers that you gave me. And I appreciate your 
answers.
    Mr. Moakley. Well, the only reason I geared on that 
situation is because we're here talking about lifting the 
embargo and food and medicine. Thank you.
    Mr. Thomas. Thank you, Mr. Chairman.
    Mr. Rangel. Mr. Chairman, before you leave----
    Mr. Thomas. Prisoners don't need medicine?
    Mr. Moakley. I didn't hear the question. I didn't hear the 
question.
    Mr. Thomas. I only said, prisoners don't eat, prisoners 
don't need medicine?
    Mr. Moakley. Sure they do. I think they should have 
medicine too.
    Mr. Thomas. OK.
    Mr. Moakley. I'm not just saying give medicine to the 
pediatric ward, but it's a good place to start.
    Mr. Rangel. Mr. Moakley, as the Ranking Democrat on the 
Rules Committee, you recognize that we have open trade policies 
with Communist China, Communist North Vietnam, Communist North 
Korea. To your knowledge, do you know whether any Members of 
this panel or in the House have visited those jails and visited 
with the prisoners before they supported free trade with those 
Communist countries?
    Mr. Moakley. Nobody's ever talked to me about it.
    Mr. Rangel. Thank you.
    Mr. Neal. Mr. Crane.
    Chairman Crane. Yes.
    Mr. Neal. Mr. Moakley, could you recount for all of us a 
conversation that we had with Mr. Castro about the issue of 
religious liberty?
    Mr. Moakley. Well, he said to us--he said the Pope has made 
a big difference for all religions. He says there's going to be 
more practicing of all religions as a result of the Pope's 
visit and things will never be the same.
    Mr. Neal. All right. Would it also be fair to say, based 
upon the conversation that we had, that none of us were 
shrinking violets in our pursuit of Mr. Castro's logic on that 
issue?
    Mr. Moakley. Well, none of us are pro-Castro.
    Mr. Neal. Right.
    Mr. Moakley. We're all pro-Cuban citizens.
    Mr. Neal. Thank you very much.
    Chairman Crane. Are there any other questions before Mr. 
Moakley departs? If not, we thank you very much for your 
testimony.
    And now, Mr. Diaz-Balart.

  STATEMENT OF HON. LINCOLN DIAZ-BALART, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Diaz-Balart. Thank you, Mr. Chairman. I appreciate very 
much the opportunity to testify today. I join my colleague Ms. 
Ros-Lehtinen in stating my belief that the obvious lack of 
fairness and balance of this hearing is very unfortunate. I 
would call it an abomination. I think this is an embarrassing 
and sad moment for this Subcommittee. And yet I appreciate the 
opportunity to personally testify.
    I would seek consent to have my written remarks included in 
the record, Mr. Chairman. Thank you. That way, I'll try to keep 
my verbal remarks brief.
    When the Pope went to Cuba, much has been said about the 
Pope. He talked about an urge that the world open up to Cuba. 
Some have used that as a pretext not to open up to Cuba, but to 
attempt to open up the dictatorship, to Castro's tyranny. That 
is not what the Pope said. The Pope stated also Let Cuba open 
up to the world. Many seem to have forgotten that the Cuban 
people are part of the world. There has been no opening up of 
Cuba to the Cuban people since the Pope's visit.
    I would--and I'm glad, Mr. Chairman, that you are keeping 
the record open, because I will submit for the record, the list 
of political prisoners who have been charged since the papal 
visit, as well as brochures I see my dear friend, Mr. Menendez, 
has one here today, explaining in detail the luxury medical 
services that are available in Cuba, as long as you have 
dollars.
    [The list of political prisoners had not been received at 
the time of printing. The brochures are being retained in the 
Committee files.]
    There is no lack of medicine in Cuba if you have dollars. 
But if you want to buy medicines in Cuba, you better have 
dollars. If you want to buy the most essential goods, even 
clothing and food, you better have dollars. There is no other 
government in the world that requires its nationals to possess 
a foreign currency in order to survive. And that is at the crux 
of what is being faced by the Cuban people today.
    The tyrant, after the collapse of the Soviet Union, has 
instituted a policy, a basically dollar-only policy, where the 
Cuban people are required to possess a foreign currency. And 
yet, if they work even for a foreign company, it is the regime 
that is paid by the foreign company, in dollars, and the 
foreign worker is paid in worthless Castro pesos. Castro keeps 
every single dollar. And every single dollar that is sent to 
Cuba has to be spent in the dollar-only stores, where food, 
medicine, and clothing can be purchased. That is the reality of 
Cuba today.
    So we will see, as you see from the list and my colleague 
Ms. Ros-Lehtinen has mentioned, today a very long list of 
witnesses to come to testify, who will come to testify about 
their wish that it be legal to do business in that apartheid 
economy that I've described in Cuba. I would ask, and I think 
they should be put under oath, like the tobacco folks that we 
see here very often when they come--the tobacco people--we see 
that film, they're put under oath, and later some perjured 
themselves, apparently.
    I would ask these people who are here to defend the ability 
to do dirty deals with Castro--many of them have apparently met 
with Castro already--have you ever or do you now ask of the 
Cuban dictatorship that it hold free elections in Cuba. I think 
that would be an appropriate question. I do not believe that 
anyone who, for example, sought to do a business deal with a 
slaveowner before slavery was eliminated in the United States, 
would have asked the slaveowner to free his slaves if they 
wanted to ingratiate themselves with the slaveowner, do a 
business deal. So I don't think that these people will ask 
Castro for free elections, but I think it would be a fair 
question.
    As I think that another fair question would be, is it more 
likely or less likely that we are contributing to a democratic 
transition in Cuba by conditioning access to the U.S. market to 
a democratic transition in Cuba. Is it more likely or less 
likely that by conditioning our market to a democratic 
transition, we are helping the democratic transition? I think 
the obvious answer is yes. There has been no democratic 
transition in the last 50 years without some form of external 
pressure, whether it be in Spain, in the Dominican Republic, in 
Chile, in South Africa, in Haiti. Every single instance of a 
democratic transition has been with some sort of external 
pressure.
    Our sanction is a unilateral sanction. But we are 
convinced--and I want to thank our friends certainly on our 
side of the aisle who have stood very firmly with us on behalf 
of the Cuban people, and the majority of this Congress that has 
consistently stood on behalf of the Cuban people's right to 
free elections.
    The issue that we have to keep in mind is that our 
sanction, while it is unilateral, at the time of the 
transition, will be indispensable, will be a critical factor, 
critical leverage, for the Cuban people to be able to recover 
their sovereignty through a free election. Free elections are, 
and should be, the essence of our policy. It is our goal. We 
have repeated 1,000 times, Mr. Chairman, that what we seek to 
do with the embargo, is to encourage, to facilitate, to grant 
leverage to the Cuban people, so that they will be able to have 
an election. Nothing more, but nothing less. That is why we're 
so grateful to the overwhelming majority, not only of the 
American people, but of their representatives here in Congress, 
on a bipartisan basis, who have stood firm in demanding that in 
this hemisphere there must be freedom and democracy and that 
will be accomplished.
    We are one dictatorship away from achieving a totally 
democratic hemisphere. That's something to keep in mind. This 
hemisphere is different and it will be democratic if the United 
States of America remains firm and at this moment, doesn't 
change its policy and provide the credits that Castro is 
seeking, so that the regime may even outlive the dictator.
    That is the essence of what we're talking about and I thank 
you, Mr. Chairman, for the opportunity to testify.
    [The prepared statement follows:]
    [GRAPHIC] [TIFF OMITTED] T5762.001
    
    [GRAPHIC] [TIFF OMITTED] T5762.002
    
      

                                


    Chairman Crane. Thank you, Lincoln.
    Mr. Menendez.

STATEMENT OF HON. ROBERT MENENDEZ, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW JERSEY

    Mr. Menendez. Thank you, Mr. Chairman, and the 
distinguished Members of the Subcommittee. I ask that my full 
testimony be entered into the record, as well.
    I'm here to debunk the myths about U.S. economic and trade 
policy toward Cuba and to oppose the chorus of the blame-
America-first crowd at what I consider to be a one-sided 
hearing.
    Our economic embargo is not 39 years old; it's 6 years old. 
Why do I say that? Because prior to that, U.S. subsidiaries 
traded with Cuba. The Cuban Democracy Act of 1992 closed those 
loopholes; the former Soviet Union ceased to subsidize the 
regime at the rate of $6 billion a year; and Helms-Burton 
further tightened the noose.
    What are the results of those 6 years of a real embargo? 
Cuba has legalized the American dollar, the most hated symbol 
of the revolution, which was previously illegal to own; Castro 
has cut back significantly on the size and capability of the 
Cuban military, the third largest in the Western hemisphere; 
and he legalized and now pursues foreign investment. These 
accomplishments are not as a result of a desire for change by 
Castro, but out of a necessity to change. A necessity we have 
created by the loss of the $6 billion. These are changes which 
occurred as a necessity which we have created since 1992 
through our policy.
    After years of the Pope desiring to go to Cuba, Castro 
finally agreed, only because of the Pope's opposition to 
embargoes, in general. If there was no U.S. embargo, Pope John 
Paul would never have been invited by Castro to visit Cuba.
    ``Let's engage,'' say some. Engagement will bring the walls 
of tyranny tumbling down. If so, then why have the hundreds of 
millions of dollars in foreign investment and the hundreds of 
thousands of visits by Canadians, Spaniards, Mexicans, and 
others, have not moved Castro 1 inch closer for respect for 
human rights and democracy?
    Canadian Prime Minister Chretien's recent visit to Cuba 
underscored the inability of engagement to move Castro. To 
Chretien's credit he sought the release of the four best known 
political dissidents in Castro's prison, who were imprisoned 
because they simply published a document entitled, ``The Nation 
Belongs to Everyone: A Blueprint for Peaceful Change and 
Reconciliation in Cuba.''
    Castro's refusal to discuss human rights, despite Canada's 
claim that it can more successfully press for change in Cuba by 
engaging Castro, left Chretien dumfounded. Canada has proven 
what many of us have long known--so long as Castro dictates the 
terms of engagement as he does, engagement itself will not 
bring change in Cuba.
    The Pope's visit was a historical event. It was successful 
and provided a limited opening for the Catholic Church. It was 
not Poland in 1979 and regrettably, it has not translated into 
political or economic change on the island. Since the Pope's 
visit, 111 people have been arrested for political crimes. That 
is the same number, ironically, of the number of political 
prisoners released pursuant to the Pope's visit. The net result 
on that score remains zero.
    As for the issue of food and medicine, let me debunk those 
arguments forthwith. The United States has provided Cuba over 
$2 billion in humanitarian aid since 1992, yet the Castro 
regime has the luxury to pour millions of dollars into their 
biotechnology industry and is exporting hundreds of millions of 
dollars' worth of food.
    The issue is not that Castro cannot purchase medicine and 
medical supplies from the United States. He can. The United 
States has licensed 50 of 53 requests for sales of medicine and 
medical devices to Cuba. And as for humanitarian assistance, 
the United States provides annually more assistance to Cuba 
than all other countries of the world combined.
    The blame for the state of the Cuban economy and for any 
shortage of food and medicine remains squarely on Castro and 
his Socialist economic policies--the lack of money to buy. On 
both accounts, food and medicine, there's ample evidence that 
Castro has access to medicine, medical supplies, and food, but 
that these resources are routinely diverted for export or to 
Cuba's growing pleasure and medical tourism industries.
    I would like to show some of Cuba's advertisements, and I 
believe that this has been passed out to the Subcommittee, in 
foreign journals. Now it's in Spanish, but I'll tell you what 
it says. This one is for Servimed, and it says, ``An ideal 
destination for your health, the home of health tourism.'' In 
the corner it says, ``In Cuba, Servimed puts at your disposal 
teams of the most experienced scientists, advanced medical 
technology of an international level, and modern hospital 
centers.'' It goes on to say that Cuba has one of the most 
developed medical systems in the entire world. Yet, average 
Cubans are not allowed to enter these centers. The shunt that 
my dear colleague from Massachusetts, who I believe has every 
good intention, was referring to in the context of that young 
boy who spent 83 days in an emergency ward, could have been 
available here at Servimed.
    We should also ask why Cuba touts its growing food export 
industry when ordinary Cubans are standing in line with ration 
cards to get basic food staples. Just read the April 27 Miami 
Herald article, which suggests that Cuba is seen as a future 
competitor in agrobusiness. And it quotes, ``From limes to 
lobsters, Cuban agricultural exports are popping up in more 
supermarkets around the world,'' and it goes on to talk about 
hundreds of millions in exports of food from Cuba to other 
parts of the world. And it goes on to say that, ``Our 
fundamental goal is to increase exports and foreign-exchange 
earnings while diversifying,'' talking about lobsters and 
shrimp, talking about a whole host of other products to France, 
Italy, and Japan. Wouldn't the Cuban people like to be eating 
that at their homes?
    I'd like to ask permission to enter some of those articles 
for the record, Mr. Chairman.
    Chairman Crane. Without objection.
    Mr. Menendez. Finally, Mr. Chairman, European, Canadian, 
and Mexican investments have been unsuccessful in moving Castro 
to undertake basic changes. Opening a door may increase 
investment in Cuba, but it will never force Castro to hand over 
the key which would unlock the door to democratic change in 
Cuba.
    No one more than I and my two colleagues from Florida would 
like to see what you want to see--greater opportunities for the 
Cuban people; less suffering for the Cuban people, including my 
family, who still lives there; to see democratic and free 
market changes. Our policy, however, must be more than about 
making money.
    And last, it is incredible to believe that all of these 
enormous economic interests that have come to bear upon this 
issue really care about the Cuban market. Even one of your 
later witnesses will tell you, interestingly enough, how Cuba--
to quote from one of your witnesses--``the Republic of Cuba's 
health system has current other countries' supplied channels 
for products which in a large number of instances are less 
expensive than similar products from the United States''--
referring to health care products.
    This is really about USA Engage, U.S. Chamber of Commerce, 
and others--this is about unilateral sanctions. Now Cuba is 
perceived as the weak link. It's the Iran and Libya Sanctions 
Act, it's the billions of dollars that are at stake in the 
countries affected by those provisions--that is the golden 
prize. And this is the vehicle to get there. They just think 
that's a lot harder.
    Mr. Chairman, we want to see that from Main Street to Wall 
Street, democracy is good for the bottom line. It would 
alleviate the suffering of the Cuban people. It would 
accomplish what, I believe, is all of our mutual goals. Our 
policies are making a difference. I urge you to stay the 
course. Thank you, Mr. Chairman, for your courtesy.
    [The prepared statement and attachments follow:]

Statement of Hon. Robert Menendez, a Representative in Congress from 
the State of New Jersey

    I am here to debunk the myths about U.S. economic and trade 
policy toward Cuba and to get to the crux of what is really 
happening in Cuba and who is really responsible.
    Our economic embargo is not 40 years old--it is 6 years 
old. Why do I say that--because prior to that U.S. subsidiaries 
could trade with Cuba and they did. The Cuban Democracy Act of 
1992 closed those loopholes, in 1989 the former Soviet Union 
ceased to subsidize the regime at the rate of $6 billion a year 
and in 1996, the Helms-Burton bill further tightened the noose. 
What are the results of those six years of a real embargo?
    Cuba has legalized the American dollar--previously the most 
hated symbol of the revolution and which was previously illegal 
to won, Castro has cut back significantly on the size and 
capability of the Cuban military, previously the third largest 
military in the Western hemisphere and he legalized and now 
pursues foreign investment. These accomplishments were not made 
out of desire for change by Castro, but out of necessity for 
change--necessity created by the loss of $6 billion in 
subsidies from the former Soviet Union and our policy.
    In fact, Castro would not have permitted the Pope to visit 
Cuba, but for his hope that he would criticize the embargo.
    Change in Cuba has occurred as a result of U.S. policy, not 
in spite of it.
    I am extremely disappointed that this committee has chosen 
to put on such a one-sided hearing. There is not a single 
person on the subsequent panel which represents, what a recent 
opinion poll found to be the majority view, by 72 percent, 
among Americans around the nation of support for the embargo.
    This isn't so much a hearing, as a pep rally for people 
interested in making a buck in Cuba at the expense of the Cuban 
people. How many people here today believe that USA Engage and 
the US Chamber of Commerce care about the welfare of the Cuban 
people. These are the same forces who fought the Reagan 
Administration tooth and nail on sanctions on Russia, like the 
Trans-Siberian Pipeline embargo and the grain embargo and the 
same people who fought the imposition of sanctions on South 
Africa under the apartheid regime. Ironically, today these same 
people derive tremendous benefits from the success of those 
sanctions policies.
    While business may not appreciate their value as foreign 
policy tools, trade and aid and the denial of trade and aid are 
essential components of our limited foreign policy arsenal. The 
only other tools is international opinion, to the extent that 
it matters to the country in question.
    If the business community is successful is restricting 
Congress' ability to impose sanctions, they will have also 
damaged our ability and the flexibility necessary to conduct 
U.S. foreign policy. While sanctions should never be our first 
policy choice, they are a necessary tool where other policy 
options have failed to achieve our foreign policy goals.
    In the case of Cuba, clearly public opinion is not a worthy 
tool. Similarly, the engagement of the Europeans and Canadians 
in Cuba has proven aid and trade to be equally faulty tools in 
facilitating political and economic change in Cuba. 
Facilitating peaceful change to democracy in Cuba is the goal 
of U.S. foreign policy.
    Canadian Prime Minister Jean Chretien's recent visit to 
Cuba underscored the limited influence of aid and trade vis a 
vis Cuba. Castro made it clear to Prime Minister Chretien 
before he arrived in Cuba that while his visit was welcome, 
there could be no conditions on his visit.
    To Chretien's credit, he did attempt to push Castro on 
democratization and he asked for the release of the four 
members of the Internal Dissident Working Group. These 
individuals were arrested last July for writing a document 
entitled ``La Patria es de Todos,'' in English ``The Nation 
Belongs to Everyone,'' a document which described the situation 
in Cuba, and their plans for peaceful change.
    While Chretien was successful in moving Havana to make 
reparations to Canadian insurance companies and in making 
progress toward an agreement on foreign investor protection, on 
human rights he was stonewalled. For those of us who watch Cuba 
and Castro, it was par for the course.
    In the end, the visit proved rather embarrassing for 
Chretien. Castro's remarks at the airport, comparing the United 
States to the Nazis and his refusal to discuss human rights, 
despite Canada's now repetitive and unfulfilled claims, that 
they can more successfully press for change in Cuba by engaging 
Castro, left Chretien between a rock and hard place. Canada is 
now faced with a choice, either it abandons it efforts to press 
for reforms in Cuba or it must tie future efforts to Canadian 
economic interests in Cuba. In any case, Canada has proven what 
many if us have long known--so long as Castro dictates the 
terms of engagement, as he does, engagement itself will not 
lead to change in Cuba.
    I would like to address Chairman Crane's quote in the 
hearing announcement which based the premise for this hearing 
and on the Pope's historic visit to Cuba.
    The Pope's visit was a historical event and was successful 
in providing a limited opening for the Catholic Church, 
however, it has not been the panacea that many hoped for. It 
was not Poland in 1979, and regrettably it has not translated 
into political or economic change on the island. Since the Pope 
John Paul II's visit, life in Cuba has gone on as usual--Castro 
has had himself ``re-elected'' to a fifth term as President, 
reaffirmed his commitment to the revolution and has arrested 
111 people for political crimes--that is the same number of 
political prisoners he released pursuant to the Pope's visit. 
In that regard, the score remains zero. Castro continues to 
adhere to his antiquated beliefs professing ``Socialismo o 
Muerte.'' He has done nothing to merit a ``calibrated'' 
response in U.S. Policy toward his regime.
    As for the issue of food and medicine, let me debunk those 
arguments forthwith.
    The issue is not that Castro can not purchase medicine and 
medical supplies from the United States, the U.S. has licensed 
nearly every request for commercial sales of medicine and 
medical supplies to Cuba and commercial travel to Cuba for this 
purpose--to date, 50 of 53 requests. As for humanitarian 
assistance, the U.S. provides annually more assistance to Cuba 
than all other countries combined. In addition to the 
remittances sent to the island by Cuban-American families, the 
U.S. Department of Commerce has licensed over 2 billion dollars 
worth of all types of humanitarian assistance since 1992.
    The U.S. embargo is unilateral in nature--Castro can and 
does have the ability to purchase goods from any other nation 
in the world, without impediment. The blame for the state of 
the Cuban economy and any shortage of food and medicine remains 
squarely on Castro and his socialist economic policies. At a 
recent conference hosted by Georgetown University, Peter 
Bourne, Castro's biographer and the author of the notorious 
American Association for World Health report which blames the 
embargo for all of Cuba's woes, was forced to acknowledge that 
the real reason for limited sales of medicine and medical 
supply sales to Cuba, was not U.S. policy, but the inability of 
the Castro regime to pay for or attain credit to pay for such 
purchases.
    It is time to stop questioning the embargo and start 
questioning Castro. The U.S. and other nations need to look 
beyond Castro's yowling about the embargo and look at what is 
really happening in Cuba. On both accounts, food and medicine, 
there is ample evidence that Castro not only has access to 
medicine, medical supplies and food, but that these resources 
are routinely diverted for export or to Cuba's growing pleasure 
and medical tourism industries.
    I would like to show you some of Cuba's advertisements in 
foreign journals. This one for SERVIMED says, ``Un destino 
ideal para su salud''--``An ideal destination for your health, 
the home of health tourism.'' In the corner, it says, ``In 
Cuba, Servimed puts at your disposal teams of the most 
experienced scientists, advanced medical technology of an 
international level, and modern hospital centers.'' It goes on 
to say that Cuba has one of the most developed medical systems 
in the entire world. Yet, average Cubans are not even allowed 
into these touted medical health centers. So much for socialist 
equality, Castro himself is engaged in a system of medical 
apartheid.
    Since the Torres bill deals with both with food and 
medicine, we should also ask why Cuba touts its growing food 
export industry when ordinary Cubans are standing in line with 
ration cards to get basic food staples. Clearly, former 
Chairman Gibbons didn't see the April 27 Miami Herald article 
on Cuba's growing food export business before he gave his 
performance on NBC last week.
    The Headline said, ``Cuba seen as future competitor, or 
even an ally, in agribusiness

          ``From limes to lobsters, Cuban agricultural exports are 
        popping up in more and more supermarkets around the world--
        leading Florida farmers to ponder what long-term impact this 
        may have on their business.
          Last year, for instance, Cuban seafood exports came to $180 
        million, up from $102 million in 1994, according to Anicia E. 
        Garcia Alvarez of the University of Havana.''
          ``Our fundamental goal is to increase exports and foreign-
        exchange earnings while diversifying,'' she said. ``Until now, 
        our exports have been concentrated in lobsters and shrimp. But 
        we're trying to increase the proportion of live and whole 
        products mainly to France, Italy and Japan.''

    I would also like to ask for permission to enter this 
article and a few others into the record.
    Whether or not you support sanctions, it ought to be 
evident that Castro holds the key to change in Cuba. The 
remaining question is this: Should the United States throw 
Castro a lifeline by lifting sanctions on Cuba?
    Current U.S. law does recognize and respond to the 
humanitarian situation in Cuba. U.S. policy, under Section 109 
of the Libertad Act permits significant assistance, including 
donations of humanitarian assistance, the sale of medicine and 
medical supplies and grants to organizations to promote 
democracy and human rights in Cuba. Since last fall the U.S. 
Agency for International Development has signed $1.5 million 
dollars in grants for this purpose and $2 million since the 
program first began with President Clinton's awarding of a 
grant to Freedom House.
    The visits of Members of Congress and the U.S. business 
community and the hundreds of European, Canadian and Mexican 
investments have also been unsuccessful in moving Castro to 
undertake basic changes. Opening doors may increase investment 
in Cuba, but it will never force Castro to handover the key 
which would unlock the door to democratic change in Cuba.
    Lastly, we need to recognize that Cuba is not the target 
that Big Business is after, Cuba is simply the easy target for 
business' looking to initiate a change in U.S. sanctions 
policies around the globe. Trade with Cuba is pennies compared 
to their real targets in the Middle East--Iran and Libya.
    No one more than I and my two colleagues from Florida would 
like anything more than to see democratic and free market 
changes in Cuba. My family in Cuba, would like nothing more 
than to see change in Cuba. Our policy must be more than just 
about making money. From Main Street to Wall Street democracy 
is good for the bottom line. Democracy is what we need for the 
Cuban people.
      

                                


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              Casi tantos indultos como encausados este ano

    LA HABANA, 20 de abril (Monike de Motas, especial para 
CubaNet)--Informaciones procedentes de la Coordinadora Nacional 
de Presos Politicos reportan que desde la partida de Su 
Santidad hasta los primeros diez dias de abril fueron en Cuba 
indultados casi tantos prisioneros como los que han sido 
procesados entre enero y marzo.
    Estadisticas que obran en sus archivos senalan que en los 
89 dias que median en este primer cuarto de ano se condenaron a 
privacion de libertad, por motivos politicos, a 59 cubanos 
opositores al sistema, mientras que otros 52 se hallan en 
proceso preparatorio para ser conducidos a los tribunales, lo 
que completa un total de 111.
    Por su parte, entre el 25 de enero y el 10 de abril, el 
regimen indulto a unos 117 encarcelados, que no contemplan a 
quienes resultaron desterrados a Canada, los cuales se vieron 
obligados a partir directamente de la celda al avion, sin 
contacto con familiares ni posibilidad de gozar de ningun tipo 
de libertad en su tierra patria.
    Aunque sumando la cantidad de liberados ante la solicitud 
del Papa, la cifra asciende a 147, pues dos de los destinados a 
Canada prefirieron seguir en prision y otros cinco resultaron 
denegados por la embajada de ese pais, la correlacion de 
encarcelaciones y encausamientos en tan corto periodo da la 
medida de los limites de misericordia castrista y del nivel de 
influencia que pudo alcanzar la peregrinacion de Juan Pablo II 
en los circulos gobernantes, a pesar del respeto y la 
tolerancia demostrada durante sus homilias en tierras cubanas.

                       Donde dije digo digo Diego

    La logica indica que una amnistia, por muy pequena que sea, 
deja por sentado la libertad incondicional de los beneficiados, 
asi como su posibilidad de autodeterminar el curso a dar a sus 
vidas con plenos derechos sociales, aun con mas razon cuando el 
termino de las sanciones conmutadas es tan breve que el 
individuo casi ha pagado su deuda con la sociedad.
    Pero en un pais donde los conceptos se confunden al extremo 
de divorciarse por completo de la significacion semantica dada, 
la logica de los demas no siempre tiene que coincidir con lo 
establecido universalmente. Por ello, nuestros derechos humanos 
deben ser entendidos de una forma particular. La etica social 
tiene sus caracteristicas propias. La moral se marca de modo 
sui generis, y tambien la condonacion tiene sus limitaciones 
puntuales.
    Por ello, tambien la presente ``absolucion'' tiene sus 
medias tintas, pues deja de serlo cuando se obliga al recluso a 
partir directamente desde la celda hacia el extranjero, sin 
tener siquiera el mas minimo contacto con sus familiares que, 
por demas, no solo deben ignorarlo, sino que tampoco pueden 
acompanarlo en su exilio forzoso.
    De la cifra original de 21 que Canada accedio a recibir, 
ese gobierno nego visado a cinco de los propuestos, por haber 
sido sancionados por delitos de terrorismo y pirateria, 
mientras que otros dos quedaron fuera de la lista al negarse a 
emigrar. Ninguno de ellos fue puesto en libertad.  Donde, 
pues, esta el supuesto indulto que recibirian?
    Pero ademas, a otros, luego de haber sido incluidos entre 
los amnistiados, se les cambio la medida por la de libertad 
condicional, como es el caso de Radames Garcia de la Vega, el 
vicepresidente del Movimiento de Jovenes por la Democracia, 
quien luego de recibir la condonacion de su sancion (a 
cumplirse en noviembre proximo) y recibir refugio del gobierno 
norteamericano, le fue aplicado el limitante C-8, por poseer 
supuesta informacion confidencial del Centro de Informaciones 
Cientificas, de donde fue expulsado hace tres anos, por lo cual 
se le niega permiso de salida hasta el 2002, y por esa causa 
ahora se halla en libertad condicional.  Tambien el es un 
indultado?
    Desde mi punto de vista, la amnistia *tiene* que ser 
incondicional, y cuando no es asi, deja de serlo. Por tanto, no 
debe considerarse honesta una lista que incluya situaciones 
como las relatadas. Seria interesante preguntar al estado 
cubano cuantos, oficialmente, integran la clemencia papal.

                     Especulando con listas negras

    En la primera decena de marzo, la CNPP tenia bajo su 
control a 788 presos politicos, pero como durante el primer 
trimestre han sido sancionados otros 59 disidentes en Cuba, la 
cifra alcanza ya el orden de los 848.
    Tal cantidad de procesados en solo 89 dias mantiene el 
ritmo de condena a uno cada 36 horas. Si nos dedicamos a 
especular, con tal promedio tendriamos mas de 1,300 prisioneros 
por causas politicas a fin de ano.
    Tomando en cuenta que a principios del presente los 
controles de la organizacion civilista poseian como dato 928 de 
estos reclusos podria concluirse que tal tasa de represion 
activa no solo habria convertido en humo el acto de clemencia 
promovido por Juan Pablo II, sino que agudizaria la situacion 
actual en un 30%.
    Resulta muy comodo ganar puntos en la consideracion 
internacional, abogando por el desarrollo y la justicia en las 
naciones mas pobres, mientras que en la propia las libertades 
civiles, y en especial las de conciencia, empequenecen a pasos 
agigantados hasta llegar a la nada.
    Es muy facil tambien proclamar mentirosa la denuncia 
publica de las violaciones de los derechos fundamentales dentro 
de la isla, sobre todo cuando hay buen cuidado de borrar 
cualquier posibilidad de comprobacion que pudiera ofrecerse de 
modo induditable.
    Sin embargo, datos como estos son los que demuestran hasta 
donde llega el abismo de inconciliacion que se abre entre los 
cubanos, por la ausencia de interes en la solucion de los 
conflictos internos de la nacion por vias pacificas.
      

                                


         Chretien, Castro talk business, but no deal on rights

By ANTHONY DePALMA

New York Times Service


    HAVANA--Prime Minister Jean Chretien set modest goals for 
his first visit to Cuba this week: further Canada's substantial 
business interests here and prod Cuba into doing something 
about human rights.
    After meeting for several hours with President Fidel Castro 
on Monday, Chretien had a commitment from Cuba to negotiate a 
foreign investment protection agreement with Canada. Havana 
also agreed to pay $10 million to a Canadian insurance company 
that lost its business in Cuba after the 1959 revolution.
    But on human rights, Chretien failed to win any concession.
    At one point during his meeting Monday with Castro at the 
Palace of the Revolution, Chretien said he handed Castro a list 
of political prisoners that Canada wants released. The 
dissidents--Marta Beatriz Roque, Vladimiro Roca, Felix Bonne 
and Rene Gomez Manzano--were detained on July 16, 1997, for the 
``counterrevolutionary'' activity of calling for democratic 
reforms.
    ``He defended his legal system,'' Chretien said, ``but he 
took the list and said he was to consider it.''
    Chretien refused to meet with Elizardo Sanchez, one of 
Cuba's leading dissidents. But his chief foreign policy advisor 
and other officials met with Sanchez and other dissidents for 
more than an hour.

A delicate moment

    Chretien's 41-hour visit to Havana, the first by a Canadian 
prime minister since Pierre Trudeau came to skin dive with 
Castro in 1976, comes at a delicate moment. Against the wishes 
of some Cuban Americans and hard-line opponents to the Castro 
government in the United States, the Clinton administration has 
moved to ease the 36-year-old economic embargo against Cuba 
slightly.
    Last month President Clinton agreed to lift bans on direct 
flights to Cuba and cash remittances that allow families to 
send dollars to Cuba. The President also said he would make it 
easier for medicine to be shipped to Cuba.
    At the same time, Castro has been more bellicose than ever 
in his condemnation of the United States embargo, going so far 
this week as to use the occasion of Chretien's visit to compare 
the embargo to ``a new version of the Holocaust,'' and suggest 
that United States officials should be tried as war criminals 
before an international court.
    Monday the White House spokesman, Mike McCurry, called 
Castro's comments ``ample evidence of what an `outlier' he is 
in the world community.'' He also criticized Canada's position 
toward Cuba.
    ``We certainly understand their desire to achieve change 
through engagement,'' McCurry said. ``We do not believe there 
is evidence that engagement with Cuba has produced any 
change.''

Muted criticism

    Until now there had been only muted criticism from 
Washington about Chretien's trip, mostly from the Cuban-
American members of Congress who fiercely oppose Castro.
    Chretien called Clinton two weeks ago to advise him of the 
trip, and said Monday that Clinton had only asked him to bring 
up the question of Cuba's record on human rights. ``The only 
comment he made to me was `I hope, Jean, that you will raise 
human rights,' '' Chretien told reporters. ``And it was the 
first item of the presentation I made this morning.''
    From the moment Chretien arrived Sunday night to dedicate a 
new airport terminal in Havana that was financed, designed and 
built by Canadians, it was clear that the prime minister's 
modest goals for the trip would be overshadowed by Castro's 
attempts to defy the United States.
    While Chretien gently outlined Canada's desire to see Cuba 
move more closely into ``a more dynamic, more democratic, more 
prosperous hemisphere,'' Castro lambasted the United States.
    ``No state should pretend to have the right to starve 
another people to death,'' Castro said as Chretien stood 
stiffly behind him. ``That is turning a nation into a ghetto 
and imposing on it a new version of the Holocaust.''

Published Tuesday, April 28, 1998, in the Miami Herald.
      

                                


    Cuba seen as future competitor, or even an ally, in agribusiness

By LARRY LUXNER

Special to The Herald


    WASHINGTON--From limes to lobsters, Cuban agricultural 
exports are popping up in more and more supermarkets around the 
world--leading Florida farmers to ponder what long-term impact 
this may have on their business.
    Last year, for instance, Cuban seafood exports came to $180 
million, up from $102 million in 1994, according to Anicia E. 
Garcia Alvarez of the University of Havana.
    ``Our fundamental goal is to increase exports and foreign-
exchange earnings while diversifying,'' she said. ``Until now, 
our exports have been concentrated in lobsters and shrimp. But 
we're trying to increase the proportion of live and whole 
products, mainly to France, Italy and Japan.''
    Garcia was one of a dozen speakers at a recent conference 
at Washington's Cosmos Club. Nearly 100 attendees listened as 
experts from University of Havana and University of Florida in 
Gainesville assessed the future of Cuban agribusiness.
    A chief focus of the day-long conference was citrus--an 
industry crucial to Florida but also one that represents strong 
export earning potential for Cuba. In 1997, the Caribbean 
island said it produced 808,000 metric tons of oranges, 
grapefruit, limes and tangerines--the largest crop since 1991. 
It currently ranks third in total grapefruit production, behind 
the United States and Israel.

Largest orange grove

    Cuba is also home to the world's largest orange grove under 
one management, a sprawling plantation in Jaguey Grande, about 
a two-hour drive east of Havana in Matanzas province. That 
operation, run by Israel's BMGroup, exports Cuban fruit mainly 
to the Netherlands for distribution throughout Europe, 
providing Cuba with badly needed foreign exchange. Because of 
the U.S. trade embargo against Cuba, BM's officials have been 
banned from entering the United States.

Yet if the embargo were lifted, some say Florida could see some 
business benefits.

    ``Florida, because of its geographic location, could become 
a supplier of inputs required by the citrus and broader 
agricultural sector in Cuba, as well as a source of new 
technology,'' writes Tom Spreen of UF's Institute for Food and 
Agricultural Sciences.
    ``Cuban grapefruit, because of its latitude, matures 
earlier, and represents a real market if and when the embargo 
is lifted. Clearly, Cuba has an opportunity to be a very strong 
player,'' he adds. ``Because of land constraints in Dade 
County, Florida will not reach the production levels of limes 
it had before Hurricane Andrew. One could easily see an 
opportunity for alliances between importers and growers of 
limes in Cuba.''

Tomatoes, too

    That's also the case when it comes to tropical fruits and 
vegetables, such as mangoes, tomatoes, plantains, melons, 
cucumbers, peppers and carrots.
    ``Given Cuba's location relative to the east coast of the 
U.S., and its climate, it is reasonable to postulate that Cuba 
could regain its prominence as a major fresh vegetable supply 
region to the U.S. market,'' Spreen says. ``Some have even 
speculated that Florida-based growers and shippers may form an 
alliance with Cuba to compete with the California-Mexico 
alliance which currently threatens their survival.''
    In the case of seafood, Cuba's once-proud fishing fleet--
made possible by cheap, subsidized Soviet fuel--took a sudden 
downturn in the late 1970s, when ``virtually all coastal 
nations in the Americas imposed 200-mile limits for their 
territorial waters in the late 1970s,'' said UF professor 
Charles M. Adams. ``With few exceptions, the exclusive rights 
claimed by these coastal nations excluded access by all other 
countries to the fisheries resources found in their territorial 
seas.''
    Nearly all of the 19.7 million pounds of spiny lobster Cuba 
produces annually is exported--mostly in the form of cooked 
whole lobster, with lesser quantities of raw, whole lobster and 
frozen tails. In terms of total value, the major markets for 
Cuban spiny lobster are Japan, France, Spain, Italy and Canada.
    If Washington decides to lift the embargo against Cuba, the 
island nation could enjoy a sudden increase in exports of spiny 
lobster, pink shrimp, snapper and other species to the U.S. 
market--providing its prices are competitive with Nicaragua, 
Honduras and other traditional seafood exporters, the experts 
said.
    Adds Bond Pace, owner of Pace Marketing Inc. in Port St. 
Lucie: ``If the embargo were finally lifted, it would open up a 
completely new range of imports. We'd see a lot of the major 
restaurant chains and processors go flying right over to Cuba 
and offer to buy all their production.''

 Published Monday, April 27, 1998, in the Miami Herald.
      

                                


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    Chairman Crane. Thank you, Mr. Menendez.
    And now, Mr. Torres.

   STATEMENT OF HON. ESTEBAN E. TORRES, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Torres. Thank you, Mr. Chairman. First, let me 
apologize for being late, but I appreciate this opportunity to 
meet before your Subcommittee.
    I want to congratulate you, Mr. Chairman, and my 
colleagues, for scheduling this hearing and for the integrity 
and the focus that is being provided here. Very few policy 
issues really provoke the emotion, the vehemence, the 
polarization, the disagreement, the disinformation, and the 
pure hostility that a discussion on U.S.-Cuba policy does.
    We will undoubtedly witness this in the remarks of many of 
my colleagues. I know they're upset. I know that they're the 
guards of the embargo policy and whose comments have preceded 
me. Sadly, it's an arena where supporters of our current 
policy, which politically and economically isolates Cuba, 
portray those who disagree with them in matters not only that I 
think violate the decorum, the credibility of this institution, 
but I think that all too often, Mr. Chairman, they accuse those 
who disagree with their views as somehow lacking in patriotism, 
or somehow lacking in respect for human rights, as being 
duplicitous, and always as being allies or dupes of the Cuban 
leaders that they so bitterly hate.
    I can understand their hate, but I think it's a foreign 
policy issue that does not tolerate a middle ground--not at 
all. It's a policy of almost total economic embargo, with dire 
and many maintain illegal effects upon the Cuban people. So, I 
congratulate the Subcommittee--my colleagues on the 
Subcommittee and their staffs are putting the needed focus on 
the policy toward Cuba and its effect upon the Cuban people. 
The Cuban people. The people Mr. Menendez and Mr. Balart talked 
about.
    I am the author of the Cuban Humanitarian Trade Act, H.R. 
1951. And I want to show you, Mr. Chairman, that along with 121 
Members of Congress, Republicans and Democrats, we are 
proposing that our current total embargo on the commercial sale 
of food and our current de facto embargo on the commercial sale 
of medicine, medical equipment, and supplies, be lifted.
    My legislative effort came after I had the opportunity to 
see with my own eyes in Cuba the condition of Cuban people, and 
after I had studied reports from medical authorities about the 
effects of our policies. Plain and simple. I understand also 
from our military experts that Cuba does not pose a significant 
military threat to the United States or any countries in the 
region. We saw that today in the newspaper and we read 
Secretary Cohen's report. Cuba has little motivation to engage 
in military activity beyond defense of its territory and 
political system. As a final consideration, the United States 
maintains a fully outfitted naval base right on the island. 
Right there.
    While there's much disagreement about the impact of our 
current policies, there's no disagreement about the fact that 
the Cuban people are suffering. So, Mr. Chairman, you have to 
see it to believe it. Some of my colleagues who are the 
principal architects and defenders of our current embargo 
maintain that it's Fidel Castro who is causing the suffering, 
the shortage of food, and of medicine--we heard that today--
despite the fact that they have brilliantly designed, 
implemented, and maintained one of the harshest economic 
embargoes in the world, save none.
    I want to quote the Pope again. He said, ``it's a monstrous 
act that we perpetuate.'' But my colleagues on this 
Subcommittee know full well that an economic embargo is no tea 
party. An economic embargo is a serious and drastic policy 
option available to nations, and usually it's invoked 
cautiously and in cooperation and in conjunction with other 
policy options, and in full consultation and coordination with 
one's allies.
    But not our Cuban embargo. No. It is applied with the grace 
of a sledgehammer and maintained almost boastfully in the face 
of near total opposition from all of our Nations' allies. An 
embargo against Cuba is a unilateral embargo, it enjoys no 
support from our allies, it isolates us from our allies, it is 
ridiculed by our allies, and our enemies use it to demonstrate 
that the United States has lost the ability to identify genuine 
threats to security. It doesn't work.
    Unilateral embargoes don't work. We've had enough time to 
measure its effects. What--39 years? It doesn't create the 
climate for democracy. It doesn't create a movement toward a 
market-oriented economy. It doesn't create the basis for free 
and civil society. Instead, all it has created is deprivation 
and hardship. It denies a population the basic necessities of 
life. And it deliberately provokes misery and discontent.
    Its authors intended that this misery and discontent would 
provoke civil unrest and cause an overthrow of the Castro 
government. It hasn't. But it has become Fidel Castro's ally 
and it's used by him to place the blame of the suffering and 
the unhappiness of the Cuban people upon the United States. 
Supporters are hesitant to own up to the full effects upon the 
Cuban people of their carefully crafted embargo. They choose 
instead to discredit the messenger, as it happened with the 
report from the American Association for World Health.
    This report wasn't easily dismissed. However, it is a U.S. 
committee for the World Health Organization whose honorary 
chairman is no less than Jimmy Carter. Its team performed a 
year-long review of the implications of our embargo which 
included onsite visits to 46 treatment centers and related 
facilities, 160 interviews with medical professionals and other 
specialists, government officials, representatives of 
nongovernmental organizations, churches, and international aid 
agencies. And their 300-page report, a study by distinguished 
medical experts, my fellow colleagues, concluded that, ``The 
U.S. embargo of Cuba has dramatically harmed the health and 
nutrition of large numbers of ordinary Cuban citizens . . . it 
is our expert medical opinion that the U.S. embargo has caused 
a significant rise in suffering--and even in deaths--in Cuba . 
. . the U.S. trade embargo--one of the most stringent embargoes 
of its kind, prohibiting the sale of food and sharply 
restricting the sale of medicines and medical equipment was 
further tightened by the 1992 Cuban Democracy Act.''
    Defenders of our economic embargo maintain that the sale of 
medicine is permitted under the embargo. Well virtually every 
communication from embargo supporters states that the sale of 
medicines is legal under U.S. laws. Well, it's true in fact, 
except that the administration of the licensing and the 
regulation hurdles that a U.S. business must comply with in 
order to transact medical sales business in Cuba, have created 
a de facto embargo. Which makes any real sales insignificant in 
volume. It discourages also real commercial sales efforts.
    Our Department of State in a fact sheet stated that 
licenses to sell medicine and medical supplies are routinely 
issued. In statements which were widely distributed to the U.S. 
Congress, the Department of State stated that, ``Since 1992, 39 
license requests have been approved for U.S. companies and 
their subsidiaries for sales of medical items to Cuba. Thirty-
one licenses were for the commercial sale of medicines, medical 
equipment, and related supplies to Cuba. Five licenses were 
issued for travel to Cuba. Eight were provided before the Cuban 
Democracy Act, and three licenses have nothing or have missing 
information.'' Out of 39 licenses, you know how many made it to 
Cuba? Nine. Nine. Big deal. Big sale.
    I heard today from a colleague here stating that 55 
licenses have been issued. That's even a bigger number. We've 
analyzed the copies of those 36 routinely approved requests for 
licenses to sell medicines to Cuba, Mr. Chairman. I have them 
here. A copy of each of those, and their final disposition, and 
I'd like permission to enter them into the record.
    [The information had not been received at the time of 
printing.]
    Chairman Crane. Without objection, so ordered.
    Mr. Torres. Mr. Chairman, five licenses were for travel 
only. No sales here. Eleven of those licenses were not even 
U.S. businesses selling to Cuba, but were international 
organizations--the United Nations, which planned to donate 
portions of the medicine and supplies to Cuba rather than sell 
them--so there's a lot of discrepancy in this, Mr. Chairman.
    My friends, there's another simple fact that the embargo 
supporters will not tell you. Castro's opposition in Cuba, the 
dissidents, the people that are opposed to Fidel Castro, sat 
with me in the American special interest section in Havana, and 
told me, to a man and woman, Mr. Congressman, lift this 
horrible embargo. It is killing us. And these are Castro's 
opposition. These are the men and women that had been in prison 
and are out and are opposition to him. They want us to lift 
this. It is killing the Cuban people.
    My colleagues, as much as our U.S. policy toward Cuba is 
defended and justified by misstatements, it's also shrouded in 
darkness. Just look at the record. Look at the record. Covert 
invasions, assassination attempts, commando activities, nuclear 
threats, beatings, jailings, human rights violations, embargoes 
on food, medicine, travel, alienation of our allies, all in the 
name of wanting to bring democracy to the Cuban people. It 
isn't working. It is immoral. And it does not bring credit to a 
country that prides itself in being humane and fair in order to 
bring some morality and some sanity to our Cuban policy, my 
friends.
    I'm here to ask you today to support efforts to remove food 
and medicine from our misguided embargo against the Cuban 
people.
    Mr. Chairman, I have a statement much further than this and 
I would like to have it included in the record. I want to thank 
the Subcommittee for opening this public dialog on such an 
important issue toward our policy toward Cuba. Thank you.
    [The prepared statement and attachments follow. The U.S. 
Department of the Treasury attachment is being retained in the 
Committee files.]

Statement of Hon. Esteban E. Torres, a Representative in Congress from 
the State of California

    Mr. Chairman, Colleagues, Ladies and Gentlemen:
    First, I wish to congratulate, the Chairman of this 
Subcommittee, my esteemed Colleague, Congressman Phil Crane for 
scheduling this hearing, and for the integrity of its agenda 
and focus. Very few public policy issues provoke the emotion, 
vehemence, polarization, disagreement, disinformation and pure 
hostility that a discussion of U.S.-Cuba policy does. We will 
undoubtedly witness this in the remarks of my colleagues who 
are the ``guards'' of the embargo policy, and whose comments 
will follow mine. Sadly, it is an arena where supporters of our 
current policy, which politically and economically isolates 
Cuba, portray those who disagree with them as somehow lacking 
in patriotism, as somehow lacking in respect for human rights, 
as being duplicitous and as being allies of the Cuban leaders 
they so bitterly hate. It is a foreign policy issue that does 
not tolerate a middle ground. It is a policy of almost total 
economic embargo, whose dire--and many maintain, illegal--
effects upon the Cuban people are denied publicly and then made 
the object of ``humanitarian'' aid strategies and programs. So, 
I congratulate Chairman Crane, my colleagues on this 
subcommittee and their staff for putting needed focus on our 
policy towards Cuba and its effects upon the Cuban people.
    Mr. Chairman, I am the author of the Cuban Humanitarian 
Trade Act, H.R. 1951. Along with 121 of my colleagues, we are 
proposing that our current total embargo on the commercial sale 
of food, and our current defacto embargo on the commercial sale 
of medicine, medical equipment and supplies, be lifted.
    My legislative efforts came after I had an opportunity to 
see with my own eyes, the condition of the Cuban people, and 
after I studied reports from medical authorities about the 
effects of our policies. I understand also from our military 
experts that Cuba has no military capabilities to project 
itself beyond its borders, and that its army maintains a 
totally defensive posture, and of course, the Cold War ended 
almost 10 years ago. As a final cap: we maintain a fully 
outfitted naval base on the Island.
    While there is much disagreement about the impact off our 
current policies, there is no disagreement about the fact that 
the Cuban people are suffering. Some of my colleagues, who are 
the principal architects and defenders of our current embargo, 
maintain that it is Fidel Castro who is causing the suffering, 
the shortages of food and of medicine. In spite of the fact 
that they have brilliantly designed, implemented and maintained 
one of the harshest economic embargos in the world, they speak 
as if our policies have no negative impact upon the Cuban 
people. But, my colleagues on this subcommittee know full well 
that an economic embargo is no tea party. An economic embargo 
is a serious and drastic policy option available to nations, 
and usually invoked cautiously and in cooperation and 
conjunction with other policy options and in full consultation 
and coordination with one's allies. But not our Cuban embargo. 
It is applied with the grace of a sledgehammer and maintained, 
almost boastfully, in the face of the near total opposition of 
all of our nation's allies.
    Embargo supporters do not want the public to know the 
difference between a unilateral embargo, where one country, 
alone, maintains trade prohibitions against another country, 
and between a multilateral trade embargo, where multiple 
countries build and maintain the embargo against the offending 
nation. Our embargo against Cuba is a unilateral embargo: it 
enjoys no support from our allies, it isolates us from our 
allies, it is ridiculed by our allies, and our enemies use it 
to demonstrate that the United States is in a period of 
decline. It also doesn't work. Unilateral embargos don't work. 
We have had enough time to measure its effects: it does not 
create the climate for democracy, it does not create a movement 
toward a market-oriented economy, it does not create the basis 
for free and fair civic society. Instead, it creates 
deprivation and hardships, it denies a population the basic 
necessities of life, and it deliberately provokes misery and 
discontent. Its authors intended that this misery and 
discontent would provoke civil unrest and cause an overthrow of 
the Castro government. It hasn't, but it has become Fidel 
Castro's ally, and used by him to place the blame for the 
suffering and unhappiness of the Cuban people upon the United 
States.
    In spite of profound changes in geopolitical relationships, 
especially where private sector, free market dynamics are being 
portrayed as the most important vehicle for building democratic 
institutions, U.S.-Cuba policy remains one of almost completely 
prohibiting any free market activity.
    Supporters are hesitant to own up to the full effects upon 
the Cuban people of their carefully crafted embargo. They 
choose instead to attempt to discredit the messenger, as 
happened with the report from the American Association for 
World Health. They accuse all critics as dupes or allies of 
Fidel Castro. The opinion of the American Association for World 
Health is not easily dismissed, however. It is a U.S. Committee 
for the World Health Organization whose honorary chairman is 
President Jimmy Carter. Its team performed a year-long review 
of the implications of embargo restrictions which included on-
site visits to 46 treatment centers and related facilities, 160 
interviews with medical professionals and other specialists, 
government officials, representatives of non-governmental 
organizations, churches and international aid agencies. Their 
300 page report, a study by distinguished medical experts, 
concluded:
    ``The U.S. embargo of Cuba has dramatically harmed the 
health and nutrition of large numbers of ordinary Cuban 
citizens. . . it is our expert medical opinion that the U.S. 
embargo has caused a significant rise in suffering--and even 
deaths--in Cuba. . . . the U.S. trade embargo--one of the most 
stringent embargoes of its kind, prohibiting the sale of food 
and sharply restricting the sale of medicines and medical 
equipment--was further tightened by the 1992 Cuban Democracy 
Act.''
    In many instances they misrepresent facts and figures to 
their advantage. One of our colleagues, one of the embargo's 
most vehement defenders, at a public hearing told the 
subcommittee that ``fifty percent of all cocaine from South 
America comes through Cuban waters.'' Not one DOD or DEA 
witness would back up that misstatement because in spite of 
Cuba's proximity to Florida, less than 9 percent of the South 
American drug traffic tries to use Cuban waters as a cover for 
their activities. One of the main reasons is that the Cuban 
government has been strongly allied with U.S. anti-drug 
efforts, but you won't hear about this from pro-embargo 
supporters.
    In another instance, defenders of our economic embargo 
maintain that the sale of medicine is permitted under the 
embargo. Virtually every communication from embargo supporters 
states that the sale of medicine is legal under U.S. laws. True 
in fact, except that the administration of the licensing and 
regulation hurdles that a U.S. business must comply with in 
order to transact medical sales business with Cuba have created 
a defacto embargo which makes any real sales insignificant in 
volume. It discourages also real commercial sales efforts.
    Our Department of State in a ``Fact Sheet'' stated that 
licenses to sell medicine and medical supplies are 
``routinely'' issued. In statements which were widely 
distributed to the U.S. Congress the Department of State 
maintained:

          ``Since 1992, 36 of 39 license requests have been approved 
        for U.S. companies and their subsidiaries for sales of medical 
        items to Cuba. Thirty-one (31) licenses were for the commercial 
        sale of medicines, medical equipment, and related supplies to 
        Cuba. Five (5) licenses were for travel to Cuba by 
        representatives of American pharmaceutical companies to explore 
        possible sales.''

    From this statement, my colleagues deduced that the sale of 
medicine by U.S. businesses to Cuba was ``routine'', no 
problems.
    Recently, my office received and analyzed copies of these 
36 ``routinely'' approved requests for licenses to sell 
medicine to Cuba. Either the Department of State does not know 
what a commercial sale by a U.S. company is, or, it is 
misleading the U.S. Congress. Five (5) licenses were for travel 
only: no sales here. Eleven (11) of the approved sales licences 
were not to U.S. businesses selling to Cuba, but were to 
international organizations (such as the United Nations) which 
planned to donate potions of the medicine and supplies to Cuba 
rather than sell them. Actually these ``donated'' sales 
amounted to about 2/3 of the total U.S. medical sales to Cuba 
cited by DOS. Eight remaining licenses were entered into prior 
to the enactment of the Cuban Democracy Act, leaving only eight 
(8) licenses for commercial sales of medicine by U.S. companies 
to Cuba. I am providing copies of these license requests so 
that they may be entered into this hearing record for members 
of the public to determine the accuracy of our State 
Departments claims.
    Our total embargo on the sale of food to Cuba is not only 
defenseless, it is a violation of international and moral law. 
Have you ever heard the embargo architects and supporters 
defend their right to deny the commercial sale of food by U.S. 
businesses to Cuba? Has the Department of State issued a ``Fact 
Sheet'' on this violation of the Geneva Convention? We need to 
ask their spokesperson, who is here today: to name the 
countries in this dangerous world against which the U.S. has a 
total commercial embargo on the sale of food. I believe the 
answer is, just Cuba.
    My colleagues, recently a Congressional delegation visited 
Cuba. In advance of their trip, they asked two stanch embargo 
defenders, who are Members of Congress, to provide them with a 
list of the names of Cubans who were in opposition to the 
Castro government and with whom they could meet to discuss the 
embargo. In Cuba, they contacted the persons on this list, and 
had them invited to meet with them at our U.S. Interest 
Section. At this meeting, one of the Members of Congress--who 
had voted for Helms-Burton asked for a ``yes or no'' answer to 
the question: ``Do you support the U.S. embargo against Cuba?'' 
Every one of these Cubans, opponents of the Castro government, 
said ``no,'' they strongly opposed the embargo. Not one 
supported the embargo. One of this group of human rights 
activists, independent journalists and religious 
representatives summed up the overwhelming opinion of the Cuban 
people: this person told the Congressmen: ``Only a masochist 
would support the embargo''
    My friends, why is it that the embargo supporters will not 
tell you this simple fact: Castro's opposition in Cuba 
overwhelmingly oppose our embargo. The Cuban people as a whole 
dream for the day when it will be lifted.
    Mr. Chairman and my colleagues, as much as our U.S. policy 
towards Cuba is defended and justified by misstatements, it is 
also shrouded in darkness. Just look at the record: covert 
invasions, assassination attempts, commando activities, nuclear 
threats, beatings, jailing, human rights violations, embargos 
on food, medicine, travel, alienation of our allies, all in the 
name of wanting to bring democracy to the Cuban people. It 
isn't working. It isn't moral and it does not bring credit to a 
country that prides itself as being both humane and fair. I 
would ask you to look at our embargo through the eyes of very 
talented Californian, who spent a number of months on a 
photojournalistic assignment in Cuba. Her name is Heidi 
McGurrin and she currently has an exhibition of her Cuban 
photographs in the Cannon Rotunda. These are her words:

          ``If you imagine many beautiful hummingbirds, multicolored 
        and gentle beauties, whose little necks were held by large 
        clumsy hateful hands, who squeezed them a little more each 
        chance they get, This is what the embargo reminds me of.''

    As a start, towards getting these hands off of the necks of 
the Cuban people, I would ask my colleagues to support efforts 
to remove food and medicine from our misguided embargo against 
Cuba.
    I have a further statement and some documentation which I 
request be entered into this hearing record along with my 
remarks. I thank the Chairman and Members of the Committee for 
calling this hearing and for opening this public dialogue on 
the important issue of our current policy towards Cuba.
    Thank you very much.
      

                                


    Chairman Crane, Colleagues, Ladies and Gentlemen:
    I congratulate my esteemed Colleague, Chairman Phil Crane 
for scheduling this hearing, and for bringing attention to the 
important topic of U.S. Economic an Trade Policy Toward Cuba.
    Given the attention on Cuba as a result of the recent 
Pope's visit, it is vital that the U.S. appraise the impact of 
its Cuba policy. Public hearings are an important aspect of 
this appraisal process and I am grateful for this opportunity 
to share with this Subcommittee some of my perspectives on 
current U.S.-Cuba policy.
    U.S.-Cuba policy has been remarkably consistent for the 
past 38 years: it is a policy which seeks to isolate Cuba 
politically and economically. A keystone of this policy is the 
maintenance of a total economic embargo.
    In my remarks today, I would like to share with you some of 
the unique aspects of U.S.-Cuba policy which make our embargo 
one of the harshest in the world, and one which almost totally 
isolates the U.S. from all of its allies worldwide.
    One characteristic of current U.S. Cuban policy is that in 
spite of profound changes in geopolitical relationships, where 
private sector, free market dynamics are being portrayed as the 
most important vehicle for building an appreciation for, and 
the practice of, democratic institutions, U.S.-Cuba policies 
remain one of almost total economic embargo. A case in point: 
U.S. policy towards the People's Republic of China stresses 
most favored nation trading status as the core element of our 
relationship, and the centerpiece of the U.S.'s efforts to 
bring its belief in free market democracy to the world's 
largest Communist nation. With Cuba, for some reason, this 
dynamic does not apply. Instead, the U. S. does the opposite. 
The U.S. policy strategy for Cuba, one of the world's smallest 
socialist countries, is to implement, maintain and increasingly 
tighten one of the harshest economic embargoes in the world, 
all in the name of providing ``support to the people of Cuba''.
    Let me identify some elements of the U.S. embargo against 
Cuba which in my opinion make it the ``world's harshest''
     the U.S. embargo bars any ship that docks in Cuba 
from docking at any U.S. port for six months. Most 
international shipping agents refuse to allow any ship that 
meets the U.S. Coast Guard an Federal Maritime Certificate of 
Financial Responsibility requirements to sail to Cuba. This 
leaves only 12 to 15 of the worlds available tankers to call at 
Cuban ports. This provision alone thwarts Cuban purchases of 
food and medicine from other countries and, when ships are 
willing to dock, often doubles the cost of shipments.
     U.S. law stipulates on-site verification for 
medical sales. This provision forces companies to assume 
responsibility for end-use, a procedure that raises the 
financial and potential liability costs to companies and 
actively dissuades them from selling to Cuba. Efforts are 
further frustrated by the fact that neither the Treasury nor 
the Commerce department has published any regulations defining 
how to meet the on-site verification requirement.
     The U.S. embargo bans medical exports that could 
be used to develop Cuba's fledgling biotechnology industry. 
This provision thwarts Cuba's promising biotechnology industry, 
which has been developed in part to meet food and medicine 
requirements locally since the embargo thwarts the island's 
ability to import basic goods. The industry has produced 
several ``firsts'' including meningitis B and hepatitis 
vaccines, as well as the domestically produced vaccines which 
maintain Cuba's ranking as 26th in the world in infant and 
child mortality, similar to the U.S.
     Our policy of embargo against Cuba serves to 
isolate the U.S. internationally. It enjoys virtually no 
support from other nations. The U.S. embargo is roundly 
denounced by the world diplomatic and medical community. The 
United Nations has condemned this embargo for five years, as 
have numerous other organizations. In 1996 the U.N. condemned 
the embargo 137 to 3, the three being the U.S., Israel (which 
has a multi-million dollar investment in Cuba's citrus 
industry) an Uzbekistan.
     The embargo `presumes denial' for licensed medical 
sales. The Office of Foreign Assets Control (called OFAC), in 
the U.S. Department of the Treasury, charged with the bulk of 
licensing medical sales to Cuba, interprets the 1992 Cuban 
Democracy Act (CDA) as discouraging medical sales. OFAC's 
Director testified before Congress: ``In 1993 (licensed Cuban 
trade with U.S. subsidiaries) was down to $1.6 
million....accounted for by approximately 15 or 16 licenses 
which were pre-CDA contracts....Frankly I believe the number 
next year to be even less, falling ultimately to zero.'' OFAC 
says 38 licenses have been issued since 1992, six for travel 
only. According to its own figures then, OFAC has granted a 
total of 14 licenses in five years for a dollar amount under $2 
million. In 1991, the last year before CDA's enactment and time 
of deep recession, Cuba purchased $719 million of mostly food 
and medicine from U.S. subsidiaries, with $500 million of that 
for medicines.
     the U.S. embargo completely bans food sales. Like 
other Caribbean nations, Cuba imports most of its food. The 
free flow of medicine and food was allowed in the multi-lateral 
embargoes against North Korea, Vietnam, South Africa, Chile, El 
Salvador, the Soviet Union and Haiti. In recent UN-supported 
embargoes against Iraq and the former Yugoslavia, the U.S. 
joined the UN position that trade in both medicines and food 
must be allowed to maintain the health of civilian population.
    As any visitor to Cuba can plainly see, the Cuban people 
are suffering. Supporters of currently U.S. policy argue that 
this suffering is the fault of the Cuban leadership. Without 
entering into the intricacies of this question, I believe that 
U.S. policy should make sure that the misery of the Cuban 
people is not in any way caused by U.S. restrictions on the 
sale of foods and medicine. Clearly, the current U.S. policy 
does not permit us this position.
    As a matter of fact, prohibitions and restrictions on the 
sale of food and medicine are fairly recent. U.S. subsidiaries 
were allowed to sell food and medicine to Cuba before 1992, 
until passage of the Cuban Democracy Act which, in response to 
concerns voiced at the time, justified the admitted harsh 
measures as `the nail in Castro's coffin'. Supporters of this 
harsh action promised that within six months the people would 
revolt against such deprivation and Castro would fall. The 
former Chairman of the U.S. House of Representative's Ways and 
Means Committee, a member of the U.S. Congress, representing a 
district in the State of Florida for 34 years, remembers the 
debate at that time about the health impact cutting off foods 
and medicine trade would have on the Cuban people. He recalls, 
and I quote: ``There was a big debate about the health impact 
cutting off such sales would cause back then, but we were 
assured that such harsh measures would only last six months or 
so since the people would rebel against Castro and put `the 
final nail in his coffin.' Well, here we are six years later 
and he's still walking around. But who knows how many Cuban 
people made it to coffins well ahead of their time because of 
these terrible restrictions.'' President Castro's eminent 
demise is constantly stated as the reason for maintaining the 
U.S. embargo.
    Just recently, on January 13, 1998, my Colleague from 
Florida, Congressman Lincoln Diaz-Balart, one of the staunchest 
advocates for our current economic policies against Cuba, again 
invoked Castro's eminent demise and asked for ``more time'' for 
our embargo to work when he stated that: ``Now that Castro is 
ill and will soon be gone from the scene is not the time to 
abandon the U.S. embargo....''.
    My friends, I would maintain the opposite: now is exactly 
the time to remove the ill-conceived, U.S. restrictions on 
trade in foods and medicine. In May, 1997, along with twenty 
bi-partisan Colleagues in the U.S. House of Representatives, I 
introduced the Cuban Humanitarian Trade Act (H.R. 1951). Quite 
simply, my bill would remove current restrictions on food and 
medical exports to Cuba, and currently has over one hundred 
cosponsors. A companion bill, with bi-partisan support, has 
recently been introduced in the U.S. Senate. I am pleased to 
inform you that both bills are building strong support from 
across the U.S. Our bills enjoy the support of most organized 
religious groups, human rights organizations, medical 
practitioners, and most recently, the formal endorsement of the 
U.S. Chamber of Commerce and the International United 
Automobile Workers Union, AFL-CIO. An effort to build a 
nationwide Latino consensus in support of HR 1951 was initiated 
recently. Indeed, the Cuban American community has already 
voted on this issue. They have voted with their pocket books 
because they are the source of the largest hard cash infusion 
into the Island of Cuba, when, mainly in violation of the very 
laws which their Congressional allies and leaders have enacted 
and fight to maintain, they pour between $800 and $1.1 billion 
a year into Cuba. North Americans from different communities 
with differing views on the embargo itself, are coming together 
in agreement that the restrictions on food and medical products 
have gone too far and should be repealed.
    The Pope's visit to Cuba focused world attention on the 
state of affairs in that Island. His Holiness has already 
spoken out about how U.S. restrictions on food and medicine 
hurt the people of Cuba.
    I would urge my colleague, Chairman Phil Crane, to initiate 
public hearings on my bill which has been referred to, and sits 
directly in his Subcommittee. Surely a bill which is building 
such broad and diverse support deserves public hearings. 
Finally, I would like to leave you with some comments on this 
issue from a truly distinguished American who has recently 
publicly supported my bill. I will quote to you from General 
John J. Sheehan (Retired) who was the U.S. Armed Forces Supreme 
Allied Commander, Atlantic and Commander in Chief, Atlantic 
Command, and as such supervised refugee operations at the U.S. 
military base at Guantanamo Bay, Cuba. The General was at a 
press conference sponsored by the U.S. Chamber of Commerce 
recently when he made the following statement:

          ``I am here today to support the newly formed coalition 
        Americans for Humanitarian Trade with Cuba. For the first time, 
        Americans from different communities, with differing views on 
        the U.S. embargo, come together to support the sale of food and 
        medicine to Cuba. For over thirty-five years, the single most 
        restrictive policy in our history has resulted in increased 
        misery for the people of Cuba and has encouraged Cuban people 
        to migrate to other countries while making no substantive 
        change in the leadership of the Cuban government. All this for 
        a country that does not pose a military threat to the security 
        of the United States.
          ``Including food and medicine in the current embargo--the 
        only such embargo existing--runs counter to our humanitarian 
        tradition. We can no longer support a policy which causes 
        suffering of the most vulnerable--women, children and the 
        elderly. It is time for us to correct this policy and its 
        unintended effects on the innocent people of Cuba.''

    My friends and colleagues, a new political wind is sweeping 
across America. Its force is growing and will soon be felt 
within the offices, halls and backrooms of the United States 
Congress. The American people no longer believe that being a 
causal factor in the poor health and nutrition of the Cuban 
people is a moral, or effective, response to our political 
disagreements with their leaders. They are beginning to 
understand that U.S. restrictions on food and medicine trade 
with Cuba does not contribute toward building the climate for 
democracy on that Island. They want a policy towards Cuba which 
does not isolate them from all of our allies. Cuban Americans 
deserve a policy towards Cuba which does not punish their loved 
ones, and which does not sow the seeds of inter-community 
strife and conflict. Most importantly, it has long been known 
that the American people believe passionately in fair play, and 
our current policy restrictions on food and medicine trade with 
Cuba is not fair to its people, does not achieve its stated 
goals, and does not reflect the vision and compassion which 
have long been the hallmark of U.S. foreign policy.
    Helms-Burton is an unprecedented effort by one sovereign 
nation to manipulate and control the political direction and 
destiny of another sovereign nation. It was born not out of a 
sense of fair play; it was designed to punish and to vindicate. 
It permits the current Cuban government to avoid the 
consequences of its policies by blaming its shortcomings on the 
``colossus to the North''. It may be, ironically, the mechanism 
which props up the Cuban government and insulates it from 
accountability to its citizens. It was passed as a direct 
response to the shooting down of Brothers-to-the-Rescue planes 
by the Cuban government. It is widely believed that, but for 
this incident, it would not have passed Congress nor have been 
signed by the President. It does not represent a high mark in 
U.S. foreign policy wisdom, and it makes me wonder who's 
winning and who's losing behind this Helms-Burton. It is a bad 
bill and it is time for a change.
      

                                


    Chairman Crane. We thank you, Mr. Torres.
    Before we get into questions from Members of the Trade 
Subcommittee, having listened to some of the objections about 
the fairness in terms of representation here and guaranteeing 
that all sides have had an opportunity to testify, let me 
assure you all in the strongest possible terms that we've done 
everything possible to accommodate any witness that wants to 
come before this Subcommittee.
    And specifically, this hearing was announced in an advisory 
dated April 21, which invited any interested parties to request 
to testify. This notice was released to the press, was sent by 
e-mail to individuals who've requested to be notified of 
Subcommittee releases, and was placed on our home page.
    In an effort to hear from all sides of this issue, 
Subcommittee staff sent copies of the advisory to your office, 
Ileana, and yours too, Lincoln. Both of you got those. And 
spoke to or faxed the notice to individuals who testified 
before the Subcommittee previously on Cuba.
    In response to the hearing notice and the additional 
efforts of the staff to disseminate the notice, the 
Subcommittee did not receive any requests at all from public 
groups or individuals who support maintaining current policy.
    Earlier this week, our staff asked the offices again, of 
you Ileana and you too, Lincoln, if you had any names of any 
such witnesses. And yesterday, Ileana, you suggested the names 
of two, and we added them to the witness list. However, we were 
notified yesterday evening that they can't participate in the 
hearing today.
    In short, this Subcommittee has tried its utmost to provide 
a forum for all views. And frankly, I don't know what more we 
could have done. And for some unexplained reason, however, our 
efforts don't appear to have satisfied some of our colleagues 
and I do not understand how they have this view.
    Finally, I note that our hearing record is open for public 
comment until May 21, and anyone interested in submitting a 
statement for the record, should do so by that date.
    And now I yield to our distinguished Ranking Minority 
Member, Mr. Rangel.
    Mr. Rangel. Thank you, Mr. Chairman.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Yes, sir.
    Mr. Rangel. In your statement, you were not inferring that 
the Communists had influenced the U.S. Chamber of Commerce.
    Mr. Diaz-Balart. No, no, not the Communists, no, no. What I 
was saying is the U.S. Chamber of Commerce now has taken a 
position in favor of being able to make business deals with an 
economy that is in essence an apartheid economy. And quite 
frankly, that's not something that should be surprising, 
because that same Chamber of Commerce supports that policy 
toward China and other regimes that completely prohibit all 
labor rights.
    Mr. Rangel. They don't have any problems with businesses 
dealing with communism--that's what you and I are saying.
    Mr. Diaz-Balart. That's correct.
    Mr. Rangel. And our government's position is that doing 
business will cause these Communists to try to move toward free 
markets, that's generally the underlying theory.
    Mr. Diaz-Balart. That's lip service--lip service. That's 
the lip service to cover and give some sort of sugarcoating to 
the policy of going into a market, where workers have 
absolutely no rights, and in the case of Cuba, they're not even 
paid one dollar, they're paid in worthless Castro Cuban pesos, 
and all the dollars are kept and split by the investor who 
invests with Castro and Castro. So they sugarcoat it by saying 
that they may bring--make--Castro a Democrat, but that's not 
their intent.
    Mr. Rangel. I see. As relates to the use of the peso and 
the dollar, the fact is that in all of the food stores and the 
marketplaces, at least in Havana, it is pesos. And in trying to 
see its comparable value in dollars, the food, milk, the bread, 
the meats--if meats are available--are very inexpensive and 
they're paid for in pesos. The dollar stores, on the other 
hand, are luxury stores that are overly priced and are paid for 
in dollars and some theorize that the moneys that they get for 
those can afford it subsidizes the peso. But I just want you to 
know that, as relates to the food in the marketplace, no 
dollars are there.
    Mr. Diaz-Balart. No, in the dollar-only stores.
    Mr. Rangel. Yes.
    Mr. Diaz-Balart. And I think it's good to bring out even 
the most elemental goods are sold and what has happened in the 
recent past in Cuba is that items that used to be purchased in 
the stores where people go with ration cards, even the most 
elemental goods are now having to be purchased in the dollar-
only stores. Which originated, as you stated, with the concept 
of luxury stores. But now even the most elemental goods have to 
be purchased in dollars.
    That's why I maintain, and I reiterate, that the only 
government in the world that I know of that requires its 
citizens to possess a foreign currency, in order to buy even 
the most elemental of goods, is the Castro regime.
    Mr. Rangel. I didn't say elemental goods--I'm saying luxury 
goods.
    Mr. Diaz-Balart. Luxury, no, no, no--clothing, food, and 
medicine. Medicines, for example, those medicines that you saw 
there in the--I hope you have a copy of the brochure that Mr. 
Menendez brought--those medicines can only be purchased in the 
dollar-only pharmacies.
    Mr. Rangel. Let's get quickly to medicine. If you were 
assured that food, medicine, and medical equipment were only 
going to those people who are poor, sick, and in need of these, 
would you have any objections to that type of equipment and 
medicine being transferred to the Cuban people?
    Mr. Diaz-Balart. Current law permits and, as Mr. Menendez 
stated, over $2 billion of humanitarian assistance which 
includes food and medicine, has been sent by the American 
people----
    Mr. Rangel. Would you have any objections?
    Mr. Diaz-Balart. I do not object to current law, no.
    Mr. Rangel. Would you have any objection in relaxing the 
licenses if you were assured that it was getting to the people 
and not to the government?
    Mr. Diaz-Balart. No, my point is that current law permits--
--
    Mr. Rangel. I didn't say current law, because----
    Mr. Diaz-Balart. It's current law.
    Mr. Rangel. It's very----
    Mr. Diaz-Balart. And the sale of medicine is legal and I 
support the current law.
    Mr. Rangel. I'm trying to frame my question that it is very 
complicated for someone to sell anything as relates to current 
law. I'm saying, if the objective was to make certain that the 
food, the medicine, and the medical equipment really went to 
those who needed it, would you support relaxing present law and 
the license requirement to make certain it got there?
    Mr. Diaz-Balart. It's not necessary, because current law 
permits the sale of medicine and the only impediment----
    Mr. Rangel. Lincoln, the answer is no. OK.
    Mr. Diaz-Balart. The impediment, Charlie----
    Mr. Rangel. The answer is no, so let me move to a next 
question.
    Mr. Diaz-Balart. No, but the impediment for the people----
    Mr. Rangel. I'm just asking----
    Mr. Diaz-Balart [continuing]. Not to get the food and 
medicine is Castro, Charlie.
    Mr. Rangel. I understand you. Everything is Castro.
    Mr. Diaz-Balart. No, not everything. Tyranny is Castro. 
Freedom is not Castro.
    Mr. Rangel. Lincoln, give me a break, will you?
    Mr. Diaz-Balart. I'll give you all the breaks you want, 
Charlie.
    Mr. Rangel. Thank you. Would you have any problem with 
Cuban-Americans visiting their families easily, leaving 
Florida, wherever, and going to Cuba and having direct flights 
to do it. For us to be able to make it easier for people to see 
their loved ones in Cuba. Would you have any objections to any 
regulation changes----
    Mr. Diaz-Balart. President Clinton announced that, and I 
did not support that.
    Mr. Rangel. Then you do object.
    Mr. Diaz-Balart. I did not support--yes, I objected.
    Mr. Rangel. For Cuban-Americans to be able to rejoin their 
families in their Cuba.
    Mr. Diaz-Balart. The action announced by President Clinton, 
which----
    Mr. Rangel. No, do you find it difficult to just answer me. 
I know what Clinton has done. I'm trying to establish a dialog 
with you.
    Mr. Diaz-Balart. Ask the question.
    Mr. Rangel. Would you have any objections to Cuban-
Americans sending money to their people, to their families that 
are poor, in Cuba?
    Mr. Diaz-Balart. That is legal and it's done through the 
current law.
    Mr. Rangel. Do you object to that?
    Mr. Diaz-Balart. It's done for humanitarian reasons.
    Mr. Rangel. It's not done for humanity; it's done because 
they want to send their mother and their grandmother some 
money.
    Mr. Diaz-Balart. And it's done. Exactly.
    Mr. Rangel. Do you object to that?
    Mr. Diaz-Balart. I----
    Mr. Rangel. Forget it.
    Mr. Diaz-Balart. If you want to forget it, that's fine. But 
one thing that I think we should not forget and that I would 
like one time for you to call for, is free elections in Cuba 
and the right of the Cuban people to be free, and no more 
pretexts for a 39-year-old dictatorship. That's what we 
shouldn't be forgetting.
    Mr. Rangel. It's easy for you to debate these things, and 
me too. The people suffering are not you, they're not me, it's 
not Castro, it's not Clinton, it's the people that are in Cuba.
    Mr. Diaz-Balart. And that's why they need elections and 
it's----
    Mr. Rangel. Elections will make them well, will make them 
healthy, will give them jobs, would allow them to visit their 
loved ones, and to hug their children and their grandparents--
all you need is an election. Forget China, forget North 
Vietnam, forget North Korea--that's accepted. But Cuba, 
Florida----
    Mr. Diaz-Balart. I can't stop what I consider to be an 
immoral policy with regard to China. But I think that this 
Congress will continue to stand with the Cuban people and 
insist that they be free and that this hemisphere be free. Yes, 
I think that we can make this hemisphere an exception--a 
totally democratic and free hemisphere.
    Mr. Rangel. I would not bet on it.
    Mr. Diaz-Balart. Well, you better bet on the Cuban people 
being free, because they're going to be.
    Mr. Rangel. They will be, but not because of this policy.
    Mr. Diaz-Balart. Not because of you and me--because of the 
Cuban people.
    Mr. Rangel. You're right, and the Cuban people in Cuba; not 
in Miami.
    Mr. Diaz-Balart. The Cuban people--No, no. I can see how 
the salaried people finally start earning their commissions. 
Let me say one thing. The Cuban people desire freedom, they 
deserve freedom, and the Cuban-Americans, just like Irish-
Americans dream for peace and freedom in Ireland, they dream 
for peace and freedom and democracy for their brothers in Cuba. 
And I think that the discrimination and the double standards 
against Cuban-Americans, which sometimes is heard by opponents 
of current policy, is something that's truly unfortunate. And I 
think that we should agree on that the Cuban people deserve 
freedom and deserve democracy.
    Chairman Crane. I would like to remind the audience that 
any public displays are not permissible in the Committee room, 
so please withhold your emotional reactions.
    And, Mr. Thomas.
    Mr. Thomas. Thank you, Mr. Chairman. I've often discovered 
that one of the easiest ways to determine whether or not a 
witness list, in terms of who it attracts and what's done, can 
best be settled by an applause meter, so that when comments are 
made or points are scored and you see who cheers for what, 
pretty well tells you.
    Frankly, I don't understand why the Cuban people are now in 
Florida and in Miami. I don't know why they just don't go home. 
I don't know why we don't have an open and free travel policy 
with Cuba, so that when we say Cubans are going to determine 
freedom, it's going to be Cubans who choose where they want to 
be, who determine freedom.
    Now, I find that some of the discussions leave me at a 
distinct disadvantage, because frankly, all of the information 
I have about Cuba is secondhand. I have never had dinner with 
Castro; I've never had a brandy and a cigar with Castro; I've 
never had a guided tour so that I could see the real Cuba. But 
I do have some secondhand information that I've tried to glean 
from a number of sources to be able to understand what goes on 
in that country.
    One of the things I've discovered is that there is now an 
opportunity for individuals to practice free enterprise in 
Cuba. That they can run a taxi or own a restaurant. And if any 
statement I make is inaccurate, I would like to be corrected, 
because its my understanding that if someone wants to have a 
little restaurant they can. They can actually be engaged in 
free enterprise. But my understanding also is that they can't 
have any employees. Now you really can't grow any kind of a 
business.
    And what I don't understand is, when you have a bill--and I 
guess Mr. Torres would be the best one to explain to me--you 
describe this as a bill which would permit the commercial sale 
of food and medicine. And from my information, Cuba's basically 
a closed society. It's a closed system.
    In fact, the discussion between my friend Lincoln and my 
friend Charlie about the state stores, I am familiar with, but 
it was in the Soviet Union--they were called verioskas in terms 
of the hard currency stores and in fact they were prevalent in 
Socialist systems as a way to get hard currency. And it's 
ironic that the discussion is about an expansion of a second 
government-owned system dealing in hard currency only, and 
every time I see that, that clearly tells me that the system is 
a Socialist system.
    So if we're going to move food and medicine, whether it be 
for commercial sale or even for that matter, humanitarian 
purposes, what's the distribution system? The gentleman from 
New York quite rightly put it--if you could get the food and 
medicine into the hands of the people who really needed it 
regardless of political position or influence with the 
government.
    What's the distribution in the system inside Cuba that 
would guarantee the humanitarian distribution of food or 
medicine, or how do you distribute products equitably or 
inequitably in a commercial way in a closed Socialist system? 
How are you going to accomplish that? Who is there, inside 
Cuba, that would carry on the retail sale, distributed 
reasonably, or humanitarian distribution, of food and medicine? 
My assumption is the Catholic Church would be an instrument. 
International Red Cross has been used in the past. Are they 
going to be there in numbers?
    What is it that gets us what some folks have said they 
wanted. I can't figure out how you don't simply reenforce 
Castro and any structure he wants to use for purposes of 
maintaining control, only it's our products and goods, whether 
commercially or humanitarianly, used to strengthen Castro, not 
to necessarily benefit in a very equitable and reasonable way 
the Cuban people? Where am I wrong in my thinking?
    Mr. Torres. Mr. Thomas, you and I have traveled around the 
world to many, many places, and we've seen many countries and 
how they affect their economies and how they move distribution. 
I would really, because I know you and because we've traveled 
together, I would beseech you to try and take a trip to Cuba. 
And look for yourself--see for yourself--how that system works 
and how the systems work there. There are large restaurants and 
little ones and medium-sized ones, with employees, with 
waiters, and waitresses, and food handlers. There are co-ops, 
there are farms, there are stores.
    Many of the things that you probably want to see and get 
answers to probably can't be done because there is no way 
which--where Americans, we, those of us that are saying that we 
ought to engage in these commercial endeavors, we don't have a 
process of negotiating with Cuban counterparts on how to do 
these things.
    Mr. Thomas. What is the Cuban counterpart in terms of a 
distribution system for commercial sale of medicine inside 
Cuba?
    Mr. Torres. Well, a drugstore.
    Mr. Thomas. Who owns the drugstore.
    Mr. Torres. The proprietor.
    Mr. Thomas. How does the proprietor get their product?
    Mr. Torres. Right now, it's smuggled in there. Right now, 
it's however he can get it from another country.
    Mr. Thomas. But the principal economic interaction or 
intercourse is smuggling?
    Mr. Torres. Many of the issues there are smuggled. People 
send--you can't----
    Mr. Thomas. So what you want us to do is encourage the 
illegal activity inside a country?
    Mr. Torres. No, no.
    Mr. Thomas. By utilizing the smuggling system?
    Mr. Torres. I haven't asserted that. I said--you asked me 
how do these products get there, and I gave you a reason of how 
they get there.
    Mr. Thomas. But is the principal reason--no, but the 
principal reason can't be smuggling.
    Mr. Torres. Well that, and many other ways, they get there. 
They get----
    Mr. Thomas. Let's focus on the many other ways. Give me one 
legitimate way.
    Mr. Torres. Well, they buy. They buy it----
    Mr. Thomas. Who do they buy it from?
    Mr. Torres. They buy it from a German pharmaceutical 
company.
    Mr. Thomas. And the German pharmaceutical company can come 
in and interact with anyone inside Cuba with no government 
responsibility relationship?
    Mr. Torres. That's correct. But the German pharmaceutical 
can't come in if in any way it's a subsidiary of a U.S. 
pharmaceutical company. Because under our current laws, they're 
prohibited from doing that. But a French company--wholly owned 
by France--could come in and sell a product to Cubans, get it 
on the shelf, without any government intervention.
    Mr. Thomas. One of the problems I have is that the brochure 
I was shown, and it may be that the brochure is not accurate, 
specifies the means of payment, which is dollars, which is 
apparently not the currency of most folks in Cuba. I find it 
difficult that there can be any kind of an open and free 
distribution system in which the government determines the type 
of currency and the appropriateness under which that currency 
is either usable or not in the purchase of goods. That, to me, 
creates a pretty bizarre economic structure----
    Mr. Torres. Mr. Thomas, you should go to Havana and see----
    Mr. Thomas. And somebody might--Mr. Menendez, you want to 
get in----
    Mr. Menendez. Mr. Thomas, I think your question is very 
well put. Let me give you very simplistic answers. First, is 
that there is no deal that is struck in Cuba without Fidel 
Castro--read the New Republic article--and the government is 
the distribution network even for the Catholic Church. The 
Catholic Church does not have the vehicles to do distribution; 
it's the government distribution vehicles and they take part of 
the goods that the church distributes.
    Second, the fact of the matter is that the Red Cross in 
Cuba is the Cuban military; there is no International Red Cross 
and the International Red Cross is not permitted to go in.
    So the answer to your question is, in a state-controlled 
economy, every aspect of the economic life of the people goes 
through the central government. And that is the answer to your 
distribution question.
    Mr. Diaz-Balart. And if I may,----
    Mr. Thomas. Mr. Chairman.
    Mr. Diaz-Balart [continuing]. Mr. Thomas----
    Mr. Thomas. Go ahead.
    Mr. Diaz-Balart. Just one point--just a point of 
clarification--no Cuban can own a pharmacy. I think that's 
important just because it was, I think, brought out in another 
way. The fact is that no Cuban can own a pharmacy. And with 
regard to the restaurants it was brought out, Castro has now 
allowed Cubans to run restaurants as long as it's in their own 
homes and with a maximum of 12 chairs.
    Mr. Thomas. Just recall the information in other closed 
controlled systems and the attempt to distribute food on a 
humanitarian basis, in which the dictator went so far as to 
repackage the food stuff, so that they could receive goods and 
not know who it came from.
    What concerns me the most is that the arguments which are 
quite passionate about the need to assist on a humanitarian, or 
even a commercial basis--which I really have a difficult 
concept in a closed system--that doesn't benefit Castro, that 
Castro doesn't control for his own purposes. When in fact you 
believe that you are doing something worthwhile, what you're 
actually doing is strengthening the very structure that you say 
you want to sometime have pass away.
    It is a very difficult situation. I appreciate my 
colleagues in terms of their testimony. But we aren't the ones 
who closed the system and we are the ones who can open it up. 
Thank you very much.
    Chairman Crane. Mr. Neal.
    Mr. Neal. Thank you, Mr. Chairman. Obviously, Castro's 
personality still draws strong reactions, pro and con. But for 
the panelist here, I did ask him about free elections; I did 
ask him about religious liberty; I did ask him about free 
markets; I did ask him about political prisoners; and, was less 
than satisfied with the answers that I received.
    The point here that I would like to express is simply 
this--why not use the model of the Pope's intervention which 
worked so well in Eastern Europe, to give us the opening that 
will bring about the end of a totalitarian system and will lead 
to a demand for more political reforms based upon religious 
reforms.
    I watched the Pope skillfully slap Castro from one end of 
that island to the other with his remarks. He never once 
embraced the notion of Marxist politics. He said that they had 
trampled on human rights.
    This is not an argument right now about Castro. What we're 
attempting to do is argue about its impact on the Cuban people. 
The notion of embracing some sort of humanitarian assistance is 
consistent with American history. It's consistent with what 
we've tried to do in other parts of the world. We can give an 
opportunity here to that same model that I mentioned a moment 
ago--for what the Pope did throughout Eastern Europe, which we 
collectively have amnesia about when it comes to Cuba.
    Mr. Menendez. Mr. Neal, I would like to address that 
question--if I may. First of all, as you know, I have a great 
deal of respect for the work we have mutually done on promoting 
peace and justice in Northern Ireland.
    Mr. Neal. Nobody in this house has done a better job than 
you have, Mr. Menendez.
    Mr. Menendez. I appreciate that. So I know where you're 
coming from. I want to preface my remarks by that. Let me just 
simply say the following: The Pope's visit, and what he sought, 
is much different than the Pope's visit in 1979 to Poland and 
what was done throughout Eastern Europe. Our support of 
solidarity, overtly and covertly, our support of others in 
Hungary and the Czech Republic is much different than what the 
church--if you read the Holy Father's own book in the context 
of what he did with the Reagan administration, in covert 
operations in Poland. You will see a very dramatic difference. 
You will see a very dramatic difference in the statements that 
are made directly about democracy.
    I agree with you. The Holy Father did not embrace Fidel 
Castro's policy. But the church in Cuba is different than the 
church in Poland. So there are differences.
    Last, with reference to your point about this not being 
about Castro; but about helping the Cuban people. We, in fact, 
are helping the Cuban people. Nobody ever talks about 
provisions like section 109 in the Helms-Burton Act, which I 
helped write. This section is, in fact, about assisting the 
Cuban people. It is about providing humanitarian assistance to 
the Cuban people. And it is about giving them, in a wide 
variety of ways, assistance that is humanitarian and also 
democracy provoking.
    The point is that when we say this is not about Cuba--if we 
were to lift the embargo totally tomorrow, you need hard 
currency unless we're just going to give dramatic credits--
millions of dollars' worth of credits--you need hard currency 
to purchase, whether it be from a U.S. company or the same 
German company that my dear colleague from California 
mentioned, you need the hard currency. And if you don't have 
hard currency, you cannot purchase the goods that you need, 
which goes back to Castro's economic reform. I'm not even 
talking about political human rights, which I agree with, of 
course, but talking about economic reform that would produce 
the hard currency that could produce the purchases, even under 
our present system.
    Mr. Neal. Thank you, Mr. Menendez. And we also will refer 
in the future--it's going to be Helms-Thomas---- [Laughter.]
    Chairman Crane. Folks, let me interrupt for a moment here, 
because I know that Mr. Shaw and Mr. Jefferson have questions 
too. But, we're down to about 6 minutes; it's raining outside; 
we're going to have to go underground for the vote. So, I think 
we had best recess the Subcommittee and come back here----
    Mr. Shaw. Mr. Chairman, could I ask that these witnesses--I 
just have an observation that, I think, should be made at this 
point. And I wasn't going to make this observation until I saw 
the amused atmosphere of the audience in this room, and then I 
looked down on the witness list--O'Leary, Berry, Muse, Kav--one 
I can't even pronounce--Barnes, Quigley, Wilhelm, Fuller, 
Gary--where are the Cuban-Americans? The Cuban-Americans are 
the three people right there that are taking a strong position 
on behalf of the Cuban people right here at our witness table.
    I think, and I know, and know in the spirit of the Cuban-
American people, that if we had a second hearing on this, you 
couldn't even get into the hall it would be so jammed with 
members of the Cuban community just out of Dade County. No, the 
Cuban future is not going to be decided in Miami; it is going 
to be decided in Cuba. And that's the way it should be.
    But I think that we need to be sure that we listen to the 
Cuban-American people; those that have experienced the 
suffering; those as Mr. Menendez says, whose family is still 
living there; Mr. Diaz-Balart and Ileana--the witness that they 
have given us and the emotion that they have given us shows 
this is the land of their fathers and this is something that, I 
think, ought to carry a definite weight.
    I commend them for their statements, I commend them for 
being here today, and I would like to associate with their 
remarks. It's been a lot of hemorrhaging, a lot of suffering, 
but let's not give it up now. We are winning now and we are 
seeing that Castro is beginning to almost beg and I think it's 
time for us to stand firm for democracy in Cuba.
    Mr. Jefferson. Mr. Chairman, I don't expect these witnesses 
to come back just to hear from me. So I suppose I might as well 
say something and get that done, so they can stay away from 
this Subcommittee--I suppose, what they'd like to do.
    This debate--this discussion--debate--has been quite 
interesting and quite enlightening. I think the great weight of 
the trend in the Congress and in the country is away from the 
idea of unilateral sanctions. Lee Hamilton and Gilman right now 
have a bill in to study the whole issue. There have been great 
pronouncements made about the cost of unilateral sanctions to 
our country and the ineffectiveness of it.
    I haven't been to Cuba, I haven't smoked a cigar, or had 
any brandy with anybody. But I know the way things are 
trending. In Iraq just recently, a country we just recently had 
war with, we lifted the sanctions for humanitarian purposes--
let them sell oil for food. We, in Vietnam, a country we had 
war with, we just normalized our relations with respect to 
trade investment. And just done yesterday, we have a thing 
called Gum Araby--we made the exception that you were leaning 
on for a bill against the Sudanese which--further sanctions 
against them. We made the exception, therefore--a substance 
that simply makes sodas and plastics and a few other things, 
which in no wise gets as high on the radar screen for human 
beings as drugs, whatever.
    It's a complex issue and I hope we'll have a chance to 
discuss it further. I wish we could ask you questions about it, 
but thank you, Mr. Chairman, for letting me speak.
    Chairman Crane. Thank you. Folks, we're going to stand and 
recess subject to the call of the Chair and I think we only 
have about 3 minutes left.
    [Recess.]
    Chairman Crane. Please be seated. And our next witness is 
Michael Ranneberger, Coordinator, Cuban Affairs, U.S. 
Department of State. And you may proceed when ready, Mr. 
Ranneberger and my understanding is you have a plane to catch 
too, so if you see those little lights in front of you and the 
red one goes on, try to terminate. Any printed statement will 
be a part of the permanent record.

 STATEMENT OF MICHAEL RANNEBERGER, COORDINATOR, CUBAN AFFAIRS, 
                    U.S. DEPARTMENT OF STATE

    Mr. Ranneberger. OK. Mr. Chairman, Members of Congress, 
good afternoon and thank you for the opportunity to speak to 
you today on the subject of the U.S. economic and trade policy 
toward Cuba.
    I would like to make brief remarks now and then submit this 
more comprehensive statement for the record and I look forward 
to your questions. I do have some time.
    To begin with, I want to establish the context for our Cuba 
policy. In his statement of March 20, President Clinton said, 
and I quote, ``The people of Cuba continue to live under a 
regime which deprives them of their freedom and denies them 
economic opportunity. The overarching goal of American policy 
must be to promote a peaceful transition to democracy on the 
island.''
    Today, in Cuba, there are 400 to 500 political prisoners. 
These are individuals imprisoned because of their beliefs and 
their efforts to express peaceful dissent. I think when we're 
talking about economic issues today, it's particularly 
appropriate to mention the case of Marta Beatrice Roke, who is 
a leading economist in Cuba and a founding member of the 
dissident working group. Once a respected economics professor 
at the University of Havana, Marta Beatrice Roke has been in 
prison for at least the last 9 months because she wrote an 
independent critique of government economic plans. She sought 
only to express her views of the Cuban economy. She is 
currently in prison and is gravely ill and has not been given 
adequate medical attention. I want to take this opportunity to 
reiterate in strongest terms our request that she be released.
    As the President said, our goal in Cuba is to promote a 
peaceful transition to democracy and respect for human rights. 
We do this through four essential elements: Pressure on the 
Cuban Government through the Embargo and Libertad Act; 
development of a multilateral effort to promote democracy; 
support for the Cuban people, consistent with the 1992 Cuban 
Democracy Act and the Libertad Act; and measures to keep 
migration and safe legal and orderly channels. The President 
has also clearly stated that the United States would respond 
reciprocally if the Cuban Government implemented fundamental 
systemic change. But Cuba has not done so.
    We recognize the importance of the historic visit of Pope 
John Paul II to Cuba. The Pope brought a message of truth, 
hope, and support for the Cuban people. His presence in Cuba 
was simply electrifying. I, myself, was also at the Mass in 
Revolution Square--I was there when Congressman Neal was 
there--and it was truly impressive to see at least half a 
million Cubans listening to, welcoming, and cheering the Pope's 
message, which was a forceful direct call for freedom and human 
rights.
    The measures the President announced on March 20 are 
designed to support the Cuban people and to assist in the 
development of independent civil society. I want to emphasize, 
as the Secretary of State said in announcing those measures, 
``They do not reflect a change in policy toward the Cuban 
Government. That policy has been, and remains, to seek a 
peaceful transition to democracy.''
    Before turning specifically to the Cuba issue, let me touch 
briefly on U.S. sanctions policy. As Under Secretary Eizenstat 
has explained, economic sanctions can be, and are, a valuable 
tool for enforcing international norms and protecting our 
national interest. We should, however, resort to sanctions only 
after other appropriate diplomatic options have been 
aggressively pursued and have failed, or would be inadequate. 
Although in many instances engagement can be preferable to 
isolation, in the case of some world regimes, engagement would 
simply feed the regime's appetite for inappropriate and 
dangerous behavior.
    For three decades the fundamental premise of our policy 
toward Cuba has been that the current Cuban Government will not 
institute political and economic change unless it has to and it 
will go only as far as it has to in order to maintain absolute 
control. Therefore, if we want to see fundamental change in 
Cuba, pressure is necessary.
    The administration continues to believe that maintaining 
pressure on the Cuban Government for fundamental change through 
economic sanctions is essential. The increased penalties and 
clarifications in title I of the Libertad Act helped send the 
message that violations of the embargo will not be tolerated.
    Since I'm running out of time, I won't comment more 
extensively on the Libertad Act at this time. But let me say 
that, as a result of the multilateral efforts that we have 
launched pursuant to the Libertad Act, we have had dramatic 
results in getting countries throughout the world to increase 
pressure on the Castro regime for change. The European Union 
has adopted the historic common position, and has established a 
human rights working group in Cuba.
    I also want to add, and there's an extensive section here 
for the record, on our efforts to support the Cuban people. The 
President has taken a number of steps as early as October 1995 
to expand people to people contacts. And our March 20 measures, 
Mr. Chairman, are intended to pursue that line. That is, to 
enhance support for the Cuban people so that they can build the 
kind of independent society that will be essential for a 
democratic transition.
    We have also--let me just add in closing--committed to work 
with the Congress on bipartisan legislation to help increase 
support for the Cuban people, on a bipartisan basis.
    [The prepared statement follows:]

Statement of Michael Ranneberger, Coordinator, Cuban Affairs, U.S. 
Department of State

                              Introduction

    Mr. Chairman, Members of Congress. Good afternoon and thank 
you for the opportunity to speak to you today on the subject of 
U.S. economic and trade policy toward Cuba. I would like to 
make brief remarks and submit this more comprehensive statement 
for the record. I look forward to your questions.

                            U.S. Cuba Policy

    To begin, I want to establish the context for our Cuba 
policy. In his statement of March 20, President Clinton said:

          ``The people of Cuba continue to live under a regime which 
        deprives them of their freedom and denies them economic 
        opportunity. The overarching goal of American policy must be to 
        promote a peaceful transition to democracy on the island.''

    The Cuban government continues to be one of the most 
repressive regimes in the world. It does not listen to or 
respond to the voices of its people. There is no free press or 
political opposition, no private sector or independent civil 
society that can publicly discuss or criticize government 
policies.
    Today in Cuba there are 400-500 political prisoners. These 
are individuals imprisoned because of their beliefs and their 
efforts to express them peacefully--actions that are legal and 
normal in our free societies. In this hearing on economic 
policy, I would like to draw your attention to one of these 
individuals, an economist, Marta Beatriz Roque, a founding 
member of the ``Dissident Working Group.''
    Once a respected economics professor at the University of 
Havana, Marta Beatriz Roque is imprisoned because she wrote an 
independent critique of government economic plans. She sought 
only to express her views of the Cuban economy, pointing out 
serious problems with its central planing policies. Cuban 
authorities have denied her adequate medical care and she is 
seriously ill. We call on the Cuban government to release Marta 
Beatriz Roque, to ensure that she receives adequate medical 
care, and to allow her to carry out her peaceful activities.
    As the President said, our goal in Cuba is to promote a 
peaceful transition to democracy and respect for human rights. 
We do this through four essential elements: pressure on the 
Cuban government through the embargo and the Libertad Act; 
development of a multilateral effort to promote democracy; 
support for the Cuban people consistent with the 1992 Cuban 
Democracy Act (CDA) and the Libertad Act; and measures to keep 
migration in safe, legal, and orderly channels. We also seek, 
through the Libertad Act, to protect the legitimate interests 
of U.S. citizens whose property has been expropriated in Cuba.
    The President has also clearly stated that the United 
States would respond reciprocally if the Cuban government 
implemented fundamental, systemic change. Cuba has not done so.

                   Papal Visit and March 20 Measures

    We recognize the importance of the historic visit of Pope 
John Paul II to Cuba. The Pope brought a message of truth, hope 
and support for the Cuban people--his presence in Cuba was 
electrifying. I attended the Mass in Revolution Square and was 
deeply moved by the sight of at least half a million Cubans 
listening to, welcoming, and cheering the Pope's forceful, 
direct call for freedom and human rights. During those moments 
the people of Cuba held the attention of all of us who care 
about their struggle for freedom and justice. We must continue 
to support them in their aspirations.
    The measure the President announced March 20 are designed 
to support the Cuban people and to assist in the development of 
independent civil society. I want to emphasize, as the 
Secretary said, that the measures ``do not reflect a change in 
policy toward the Cuban government. That policy has been, and 
remains, to seek a peaceful transition to democracy.'' I will 
discuss the March 20 measures in greater detail later.

                         U.S. Sanctions Policy

    Before turning specifically to Cuban issues, let me touch 
briefly on U.S. sanctions policy. Under Secretary Stuart 
Eizenstat testified on this subject before your subcommittee in 
October. I will not attempt to review all of Under Secretary 
Eizenstat's excellent statement, but I want to highlight a few 
of the points he made that apply especially to Cuba.
    As Under Secretary Eizenstat explained, economic sanctions 
can be and are a valuable tool for enforcing international 
norms and protecting our national interests. We should, 
however, resort to sanctions only after other appropriate 
diplomatic options have been aggressively pursued and have 
failed, or would be inadequate. Although, in many instances, 
engagement can be preferable to isolation, in the case of some 
rogue regimes, engagement would simply feed the regime's 
appetite for inappropriate or dangerous behavior.
    As Under Secretary Eizenstat said, while there are 
advantages to multilateral sanctions, there are times when 
important national interests or core values are at issue that 
we must be prepared to act unilaterally. There can be no ``one-
size fits all'' approach. The President must have the 
flexibility to tailor our response to specific situations.
    Sanctions are used for a variety of purposes, including:
    --to punish a country for unacceptable behavior;
    --to influence the behavior of a target country;
    --to signal disapproval of a government's behavior;
    --as a necessary early reaction and as a warning that 
harsher measures could follow;
    --to limit a target state's freedom of action;
    --to deny resources or technology;
    --to increase the cost of engaging in unacceptable 
behavior;
    --to draw international attention to unacceptable behavior;
    --to challenge our allies to take more forceful action 
themselves in support of common objectives;
    --or at times, simply to signal that a business-as-usual 
approach to a government that violates core values is not 
acceptable.
    As U/S Eizenstat noted, our Cuba policy is illustrative of 
one of the principal goals of economic sanctions--to encourage 
our friends and allies to adopt policies that can advance our 
common interests. Our allies and major trading partners 
disagree with our embargo of Cuba and have urged us to change 
or alter the provisions of the Libertad Act.
    At the same time, our allies have said they agree with us 
on the key goal of encouraging democracy and human rights in 
Cuba. Even when supporting Cuba's resolution at the UN General 
Assembly against the U.S. embargo of Cuba, the EU made clear 
its opposition to Cuba's human rights policies. In explaining 
the vote of EU member in favor of Cuba's resolution, 
Luxembourg, in its role of President of the European Union, 
issued a strong condemnation of Cuba's human rights record, 
noting concern about the ``persistent absence of progress 
towards democracy,'' ``non-respect for political rights,'' 
``increasing violations of civil and political rights,'' and 
``harassment of those who seek to bring democracy to Cuba by 
peaceful means.''

                   The Embargo and The Cuban Economy

    For three decades, a fundamental premise of our policy 
toward Cuba has been that the current Cuban government will not 
institute political and economic change unless it has to, and 
it will go only as far as it has to in order to maintain 
absolute control. Therefore, if we want to see fundamental 
change in Cuba occur, pressure is necessary.
    The U. S. policy of applying economic pressure originated 
soon after Fidel Castro came to power in 1959. The embargo 
formally began under President Kennedy, and has been supported 
by all successive Presidents.
    One of the major reasons for the imposition of the embargo 
was the Cuban government's failure to compensate thousands of 
U.S. companies and individuals whose properties, large and 
small, were confiscated after the revolution. The Cuban 
government specifically targeted and took properties owned by 
U.S. nationals. Under the Cuba claims program in the 1960's, 
the U.S. Foreign Claims Settlement Commission (FCSC) certified 
5911 valid claims by U.S. nationals against the Government of 
Cuba. The Castro government also took property from thousands 
of Cubans, some of whom have since become U.S. citizens.
    The impact of the embargo was somewhat offset during the 
Cold War years by $5-6 billion annually in Soviet subsidies, 
but these ended with the collapse of the Soviet Union and other 
European Communist regimes in the early 1990's. Cuba suffered a 
35% decline in Gross Domestic Product between 1989 and 1993, 
revealing an inherently dysfunctional economy. Food shortages 
and failure of basic public services led to disturbances which 
threatened to challenge the regime.
    These problems, coupled with the continuing embargo, forced 
the Cuban government to undertake very limited economic reforms 
to enable it to survive. The Cuban government in the mid-1990's 
permitted Cubans to offer certain services privately under 
strict government scrutiny, but in 1997 introduced heavy taxes 
which forced many out of business. It appears that employment 
in this sector peaked in 1996 at around 206,000 and fell in 
1997 to about 170,000. In 1994, the government introduced 
agricultural markets at which state and private farmers could 
sell surplus products at market prices after delivering the 
required quota to the state, which helped to alleviate grave 
food shortages and nutritional problems.
    Cuba has actively sought foreign tourism and investment, 
while continuing to forbid private investment by Cuban 
citizens. It succeeded in attracting a limited amount of 
investment, but its overall ``investment climate'' remains 
hostile to private enterprise.
    In 1993, the Cuban government made it legal for its 
citizens to possess and use the U.S. dollar, which has become 
the major currency. Cuban failure to launch serious economic 
reforms has led to the development of a large black market and 
growing corruption. Those with access to dollars can purchase 
imported goods at government-run dollar stores. To earn dollar 
tips, many skilled doctors, teachers, engineers, and scientists 
are working in restaurants or as taxi drivers.
    Nevertheless, under the slogan ``socialism or death,'' the 
Cuban government has resisted any credible effort to adopt 
market-based policies and continues to tight state control of 
its highly centralized economy. Over eighty percent of the 
labor force is employed by the state.

                    The Embargo and The Libertad Act

    Seeking to hasten a democratic transition in Cuba, Congress 
passed in 1992 the Cuban Democracy Act (CDA), which tightened 
the embargo by prohibiting U.S.-owned or controlled 
subsidiaries located abroad from doing business with Cuba. The 
Act also provided for avenues to support the Cuban people, 
which, as I noted above, constitute a principal focus of our 
policy.
    As change continued in Eastern Europe in the 1990's, but 
not in Cuba, concerned Members of Congress sought to develop 
ways to both deal with the continuing expropriation problem and 
apply additional pressure for peaceful change on the Cuban 
government. This led to the development of the ``Cuban Liberty 
and Democratic Solidarity Act,'' called the ``Libertad Act,'' 
and known as the Helms-Burton Act after its principal sponsors. 
When in February 1996 Cuban MiGs shot down two civilian 
aircraft in international air space, killing three U.S. 
citizens and one resident, Congress passed this act by 
overwhelming margins. The President signed it into law on March 
12, 1996.
    Title I of the Libertad Act, for the first time, codified 
the embargo. The Act specifies conditions under which the 
embargo can be lifted or suspended once a new Cuban government 
begins implementing a genuine transition to democracy. The 
Administration believes that until Cuba is engaged in a process 
of democratization, which includes free and fair elections, 
respect for human rights and due process of law, just to 
mention a few elements, the embargo should be maintained.
    Title I of the Act also strengthens enforcement of the 
embargo by expanding the civil enforcement authority available 
to the Office of Foreign Assets Control (OFAC) of the 
Department of the Treasury, which is charged with enforcing the 
restrictions on financial transactions with Cuba. The State 
Department strongly supports the embargo enforcement efforts of 
OFAC, the Department of Commerce, and the U.S. Customs Service.
    The Administration continues to believe that maintaining 
pressure on the Cuban government for fundamental change through 
economic sanctions is essential. The increased penalties and 
clarifications in Title I of the Libertad Act help send the 
message that violations of the embargo will not be tolerated.
    Equally important, we work closely with OFAC and the 
Department of Commerce on license requests for humanitarian 
assistance, as encouraged by the Cuban Democracy Act and the 
Libertad Act.

              Helms-Burton and the Multilateral Initiative

    Perhaps the best known and most controversial aspects of 
the Libertad Act are Titles III, which created a private cause 
of action in U.S. courts, and Title IV, which prohibits visas 
and entry in to the United States to those who ``traffic'' in 
confiscated property claimed by a U.S. national. These 
provisions prompted the European Union to initiate a complaint 
against the U.S. in the World Trade Organization (WTO). Canada 
and Mexico called for consultations under the provisions of 
NAFTA.
    The President allowed the Title III lawsuit provisions to 
enter into force on August 1, 1996. At the same time, because 
of the intense interest in the Act among our allies and trading 
partners, he saw an opportunity to increase international 
pressure for change through a U.S.-led multilateral initiative 
to promote democracy in Cuba. In order to achieve this, the 
President in July 1996 suspended the right to file suit under 
Title III for six months, effective August 1, while calling on 
our friends and allies to step up efforts to promote a 
transition to democracy in Cuba. This initiative has changed 
the terms of the international debate about Cuba.
    We have been able to manage this serious disagreement with 
close friends and trading partners and advance the President's 
multilateral initiative to promote democracy in Cuba. Under 
Secretary Eizenstat reached an ``Understanding'' with the EU in 
April 1997 under which the EU agreed to suspend its WTO case 
and step up its efforts to promote democracy in Cuba. The 
parties also agreed to negotiate disciplines on property 
confiscated in contravention of international law, including 
property in Cuba, and principles on conflicting jurisdictions. 
These discussions are in a crucial phase and, if an agreement 
is reached, the administration will discuss with Congress the 
possibility of obtaining authority to waive Title IV of the 
Act.
    The multilateral initiative to promote democracy has 
resulted in several important steps to promote democracy in 
Cuba. Perhaps the most important of these is the European 
Union's Common Position, which links improved relations with 
Cuba to fundamental democratic changes. The EU nations also 
created a Human Rights Working Group among their embassies in 
Havana to increase contact with dissidents, human rights 
groups, and independent elements of civil society. They have 
forcefully called for the Cuban government to release political 
prisoners. In addition, Under Secretary Eizenstat's visit to 
four Central American countries last year energized their 
efforts to promote change in Cuba; leaders of these nations 
have spoken out. At the United Nations General Assembly in 
December 1997, more countries than ever before co-sponsored the 
U.S. resolution on the human rights situation in Cuba. The Cuba 
resolution at the UN Human Rights Commission in Geneva this 
year had 27 cosponsors, including many key EU allies, 
although--tragically--it did not pass. The Department issued a 
statement expressing its concern that some members of the 
commission chose to turn their backs on the suffering of the 
Cuban people. We believe it is unconscionable that the vote 
will end the mandate of the UN Special Rapporteur in Cuba.
    Nongovernmental organizations (NGOs) are increasing their 
support for peaceful, democratic change on the island. Pax 
Christi, the Dutch human rights organization, is leading a 
coalition of European NGO's to focus on the deplorable human 
rights situation in Cuba, and has held two major conferences. 
In August 1997, Amnesty International issued a special 38-page 
report entitled ``Cuba: Renewed Crackdown on Peaceful 
Government Critics,'' which documented the Cuban government's 
campaign against those who work for human rights and democracy. 
In August 1997, the American Bar Association awarded its annual 
``International Human Rights Award'' to Dr. Rene Gomez Manzano 
and Dr. Leonel Morejon Almagro, two members of the Dissident 
Working Group in Cuba who were unable to receive the award 
because they had been arrested by the Cuban government.
    As a result of these efforts--the rhetoric of the Cuban 
regime notwithstanding--Cuba is hearing a concerted message on 
the need for fundamental, democratic, systemic change.

                          Title IV Enforcement

    Through a special unit established in the Office of Cuban 
Affairs, the Department continues to implement Title IV of the 
Libertad Act based on facts and the terms of the law.
    --Determinations have been made involving three companies: 
Sherritt International of Canada, Grupo Domos of Mexico, and BM 
Group, an Israeli-owned firm registered in Panama, and over 15 
executives and their family members have been excluded from 
entry into the U.S. Because Grupo Domos has presented evidence 
that it is no longer involved with U.S.-claimed property in 
Cuba, the company's executives are once again eligible to enter 
the U.S.
    --Implementation efforts have had a significant negative 
impact on the Cuban economy. Since enactment of the Act, 
nineteen firms from over ten countries have changed their plans 
for investment in Cuba or have pulled out of investments there. 
There are many indications that the investment environment in 
Cuba is unstable and risky. Interest rates for projects in Cuba 
have been driven to as high as 22%. The Cuban government is 
finding it more difficult to obtain financing, and potential 
investors face the same problem.
    --As part of our investigative effort, we have contacted an 
additional twelve companies from seven countries about their 
activities in Cuba. Companies may provide additional 
information to demonstrate that their activities are not 
covered under the Act, or they can explain their plans to 
discontinue activity in Cuba in order to avoid Title IV action. 
Among companies contacted for additional information, as the 
press has reported, have been three firms involved with 
petroleum exploration. As a result, one has already ceased its 
operations in Cuba.
    In addition to seeking information from claimants about 
their claims, we are making maximum use of the limited amount 
of information available from all sources on foreign investment 
in Cuba. The Cuban government claims there are over 300 joint 
ventures with foreign firms, without regard to whether they are 
involved with U.S.-claimed property. We believe this number is 
inflated, but we are developing a database to track activities 
of joint ventures and gather information on the location of 
property subject to certified claims. Gathering reliable 
information is a difficult and time-consuming process.

              Other Aspects of Economic Policy Toward Cuba

    Before I describe in more detail our efforts to provide 
humanitarian assistance to the Cuban people, I want also to 
touch on other aspects of economic policy, some of which are 
also contained in the Libertad Act. The United States opposes 
reintegration of the current Cuban government into 
international financial institutions and regional economic 
groupings. We are urging the European Union, for example, to 
apply to Cuba the human rights and democracy standards of the 
Lome Convention, under which the EU provides economic benefits 
to developing nations, as it considers Cuba's application to 
join the Lome Convention.
    The U.S. discourages companies from other countries from 
investing in Cuba. Under the current regime in Cuba, such 
investment tends to increase the power and control of the Cuban 
government rather than benefit the people.
    We recognize, however, that some companies from other 
countries are investing in Cuba. As part of the multilateral 
initiative to promote democracy in Cuba, Under Secretary 
Eizenstat is leading an effort to press businesses in Cuba not 
involved with contacted property to recognize and promote 
``best business practices.'' These are fundamental rights taken 
for granted in the Western world that the Cuban government does 
not acknowledge, such as free speech and association; the right 
to join an independent labor union; and even the right to hire 
and pay an employee directly without intervention from the 
State. The Trans Atlantic Business Dialogue, the North American 
Committee of the National Policy Association, and the Dutch 
human rights organization, Pax Christi, have all endorsed this 
concept and are encouraging companies operating in Cuba to 
implement best business practices.

                      Support for the Cuban People

    A fundamental aspect of U.S. policy toward Cuba is to 
provide support for the Cuban people, without supporting the 
Cuban government. This focus has been a key element of our 
policy for most of this decade beginning with the Cuban 
Democracy Act of 1992. These efforts were strengthened by 
President Clinton's initiatives in October 1995 to encourage 
human rights organizations and other non-governmental groups 
and individuals in the U.S. to develop contacts on the island. 
Those steps complemented earlier efforts to improve 
telecommunications service between the U.S. and Cuba, and to 
encourage private humanitarian donations to NGOs in Cuba. The 
1995 initiatives included licensing U.S. NGOs to assist 
independent Cuban NGOs; allowing sales and donations of 
communications equipment to Cuban NGOs; authorizing 
establishment of news bureaus; increasing academic, cultural, 
and educational exchanges; and allowing under a general 
Treasury license once-a-year family visits to Cuba in cases of 
humanitarian emergencies.
    Since the October 1995 measures were announced, the 
Administration has licensed dozens of trips, programs and other 
activities by NGOs and institutions in the U.S. aimed at 
strengthening independent civil society. Several U.S. NGOs have 
begun sharing expertise and modest resources with Cuban 
partners, American students and teachers are meeting with their 
peers, and U.S. professionals and researchers are establishing 
contacts and cooperation with colleagues on the island.
    To foster the development of independent civil society in 
Cuba through support for the Cuban people, the Department works 
through a program administered by the U.S. Agency for 
International Development (USAID), pursuant to Section 109 of 
the Libertad Act. With valuable input from many agencies and 
the Congress, since it began in the fall of 1995, $2.45 million 
has been approved for U.S. NGOs under this program. Of that, $2 
million has been approved in the last 12 months. An additional 
$1.8 million in new project proposals is under review.
    These projects are wide-ranging, promoting the free flow of 
information to, from, and within Cuba. Among other activities, 
they will enable independent community grassroots organizers, 
professional organizations, and the private agricultural sector 
to meet their counterparts in Latin America, the Caribbean and 
the U.S.; facilitate contact between Cuban environmentalists 
and environmental NGO's in other countries; and promote best 
business practices for foreign investors not involved in 
confiscated property to follow inside Cuba in order to promote 
workers' rights.
    The Department takes very seriously its responsibility to 
assist in the provision of humanitarian assistance to the Cuban 
people. We work closely with the Department of the Treasury's 
Office of Foreign Assets Control (OFAC) and with the Department 
of Commerce to ensure appropriate licenses are issued. Since 
the passage of the Cuban Democracy Act (CDA) in 1992, OFAC and 
the Department of Commerce have issued 50 licenses for exports 
of medicines and medical equipment from U.S. companies or US-
owned subsidiaries, subject to appropriate end-use monitoring. 
These licenses include 12 authorizations for travel to Cuba by 
representatives of American pharmaceutical companies to explore 
possible sales. Since the passage of the CDA in 1992 over $2 
billion in humanitarian donations has been licensed, including 
nearly $275 million for medicines and medical equipment, and 
$13 million in food. The United States is the largest donor of 
humanitarian assistance to Cuba.

                           March 20 Measures

    Pope John Paul spoke eloquently on the need to respect 
human rights and fundamental freedoms, to release prisoners of 
conscience, and to allow the development of independent civil 
society. When Secretary of State Albright met with the Pontiff 
in Rome, she discussed prospects for change in Cuba. The Pope 
was optimistic, speaking of the crowds who attended masses 
throughout the island, culminating in the huge mass in 
Revolution Square in Havana. John Paul II has publicly made 
clear his hope that his visit will propel Cuba toward a process 
of fundamental change, just as his first visit to Poland did.
    This historic visit left us with a challenge--how to 
sustain the religious opening created by the Pope's visit, how 
to increase support for the Cuban people, and how to encourage 
a process of fundamental change without providing resources 
which will prop up Castro's regime. We believe the measures 
announced March 20 will do that.
    The new measures are a strong response to the Pope's visit, 
and enhance support for the Cuban people in their aspiration 
for a peaceful democratic transition.
    As the Secretary of State said on March 20, we are taking 
these steps ``to empower Cuban citizens .... (and) not because 
of anything the Castro regime has done...'' In announcing his 
decision on March 20, President Clinton said: ``To build 
further on the impact of the Pope's visit, to support the role 
of the Church and other elements of civil society in Cuba, and 
to thereby help prepare the Cuban people for a democratic 
transition, I have decided to take the following steps:''
    1. First, the resumption of licensing direct humanitarian 
charter flights to Cuba. Direct humanitarian flights under 
applicable agency regulations will make it easier for Cuban-
Americans to visit family on the island, and for humanitarian 
organizations to provide needed assistance more expeditiously 
and at lower cost.
    2. Second, establishing new licensing arrangements to 
permit Cuban Americans and Cuban families living here in the 
United States to send humanitarian remittances to their 
families in Cuba at the level of $300 per quarter, as was 
permitted until August 1994. This will enable Cuban-Americans 
to provide direct support to close relatives in Cuba, while 
moving the current large flow of remittances back into legal, 
orderly channels.
    3. Third, streamlining and expediting the issuance of 
licenses for the sale of medicines and medical supplies and 
equipment to Cuba. Based on experience of the past several 
years, including during the Papal visit, we believe that the 
end-use verification called for in the Cuban Democracy Act can 
be met through simplified arrangements.
    The Departments of the Treasury, Commerce, and State are 
developing and will announce the new arrangements in these 
areas in the coming weeks.
    As you can see from my review of these measures, we have 
not altered the fundamentals of U.S. policy toward Cuba. The 
measures are being taken using Treasury and Commerce licensing 
authorities and are fully consistent with the Cuban Democracy 
Act of 1992 and the Libertad Act of 1996.

                              What's Next?

    What does the future hold for U.S. economic policy toward 
Cuba? The Castro regime is under more international pressure 
than ever before to respect human rights and implement 
democratic change, in part because of our multilateral 
initiative. We plan to keep up that pressure on the Cuban 
government.
    In January 1997 the President submitted to Congress and 
released publicly a major report entitled ``Support for a 
Democratic Transition in Cuba,'' as mandated by Title II of the 
Libertad Act. To develop the plan, an inter-agency team drew on 
lessons learned from assistance programs to Latin American 
countries and the former Communist countries of Eastern Europe.
    The transition plan describes the many issues that will 
confront a democratic transition government in Cuba, and how 
the United States and other nations will be able to assist. The 
report indicates that a democratic transition government can 
expect to receive $4-$6 billion in private assistance, loans, 
and grants from international financial institutions and other 
donors over a six year period following the establishment of a 
transition government. The report is an incentive to all those 
in Cuba who favor a democratic transition.
    We have translated the report into Spanish, and over 10,000 
copies have been distributed in Cuba. Radio Marti has described 
the plan to the Cuban people. The extent to which the Cuban 
government fears the impact of this message was evident from 
the vitriolic propaganda offensive the Cuban government 
launched against it. Castro required military officers to sign 
loyalty oaths specifically denouncing the transition report.
    As we implement our Cuba policy, we must find creative ways 
to increase support for the Cuban people while maintaining 
pressure on the Cuban government for fundamental, systemic 
change. We should strive to do that on the bipartisan basis 
that has characterized our Cuba policy for decades. In that 
way, we will maintain international leadership on this issue. 
And we will send a strong, effective message to the Cuban 
government, the Cuban people, and the world. Thank you.
      

                                


    Chairman Crane. Mr. Ranneberger, how can U.S. policy ensure 
that humanitarian assistance provided to the Cuban people 
reaches them, and is not intercepted by Castro to sell for his 
own profit or made available only to Communist Party elites and 
foreign visitors.
    Mr. Ranneberger. That is a key issue, Congressman, and what 
has been happening, as I think was mentioned here, there has 
been over $2 billion in humanitarian assistance licensed since 
1992. And what happens is that assistance is sent to Cuba by 
U.S. nongovernmental groups. Most of those groups then go to 
Cuba at different times to monitor how that aid is used. That's 
particularly true of the church groups, so it's the World 
Council of Churches or Catholic Relief Services, as well as 
other nongovernmental groups. And of course, international 
agencies do that as well. So there is, in fact, I think, a good 
record regarding how that is used and we need to have that 
continuing kind of scrutiny.
    Chairman Crane. Do you believe that the opposition of our 
trading partners and allies to the Helms-Burton legislation has 
interfered with our ability to call for an international 
consensus on dealing with other rogue regimes, like Iraq?
    Mr. Ranneberger. Well, clearly, I think, the allies are 
upset with our sanctions policy worldwide. And I think this is 
a real important point to bear in mind. The allies are not, in 
my judgment, primarily upset with the Helms-Burton legislation. 
There is--keep in mind that the U.S. Government at this moment 
maintains over 60 sanctioned regimes throughout the world. So, 
the use of sanctions is quite pervasive as an element of 
policy.
    I think that's what you see U.S. allies--whether in Europe 
or Latin America--concerned about. So that, yes, use of 
sanctions does affect our ability to work with them.
    What we have tried to do in the Cuba case, is to develop a 
multilateral effort and to negotiate our differences with the 
allies. And we've actually had some success on that. I think 
you may be aware that Under Secretary Eizenstat has been in 
close discussions with the European Union to try to reach an 
agreement by which we would set aside our differences on title 
IV of the Libertad Act. At the same time, the President, of 
course, has suspended the title III provisions and has told the 
allies if they do work to step up pressure on the Castro regime 
for change, we will continue to suspend that. And we have seen 
a number of steps. So, I would say that we've used the Libertad 
Act, I would say, creatively and effectively to try to actually 
get increased cooperation with the allies. But, resolving these 
differences over title IV is crucial to that.
    Chairman Crane. Thank you.
    Mr. Rangel.
    Mr. Rangel. The present administration should be 
congratulated for relaxing some of the rules as relates to 
travel and allowing Cuban-Americans to send moneys back to 
Cuba. Has this caused any adverse affect at all in our foreign 
policy--the President's actions?
    Mr. Ranneberger. No. It has not. I think it's been welcomed 
by the rest of the world community.
    Mr. Rangel. Are there any other positive steps toward 
normalization that we should know about?
    Mr. Ranneberger. No, there are not, Congressman. I do want 
to clarify here, with all due respect, this is not a step 
toward normalization and I really want to emphasize that point 
in the strongest terms, because----
    Mr. Rangel. Does the administration oppose normalization?
    Mr. Ranneberger. We don't oppose normalization if it's done 
under the right conditions, and that is, that there is 
democratic change underway in Cuba.
    Mr. Rangel. The goal is normalization.
    Mr. Ranneberger. The ultimate goal of our relationship is 
normalization with a democratic Cuba, yes sir.
    Mr. Rangel. And sending money there and allowing people to 
travel there to visit their loved ones is not interfering with 
the goal of normalization?
    Mr. Ranneberger. No, and in fact, I think it supports it by 
giving the Cuban people a degree of freedom from the Cuban 
Government. It helps them to have greater options, how they're 
going to approach those items, and that sort of thing, and 
that's why we've done it.
    Mr. Rangel. So that if we were to have direct flights and 
to make it easier for people to visit and perhaps to have 
students--to be able to have student exchange and artists to go 
over--those things would not adversely affect our overall goal 
of normalization, would it?
    Mr. Ranneberger. Of course, everything depends--it's very 
hard to respond to a general statement--everything depends on 
how something is done. But let me point out that, right now, we 
have an extensive exchange program with the Cuban people. Last 
year alone, I think we issued over 1,200 visas to Cuban 
scientists, artists, doctors, cultural figures, and the like. 
I'd have to get the exact figure. So that is an ongoing process 
and I would agree with you that that supports what we're trying 
to do, which is encourage independence in Cuban society, 
encourage people to think independently, and therefore lay the 
groundwork for a democratic transition.
    Mr. Rangel. So if we had legislation as we do pending that 
would allow food and medicine and medical equipment to be 
exempted from the embargo, that would not impede our long-range 
goal toward normalization, would it?
    Mr. Ranneberger. Well, that's--I really would prefer today 
not to get into the specific legislation, but as you know, I 
think, there are four bills either on the floor or in the 
process--there's going to be--on Cuba issues. I think we'll 
need to look closely at the content of those and the President 
has said that he wants to work with the Congress on bipartisan 
legislation. So, we are going to be looking at that. I'd prefer 
not to comment on a specific detail until we start to engage 
with the Congress, which will be soon, on that issue.
    Mr. Rangel. Could you share what progress has been made 
with our European friends as relates to relaxing the Helms-
Burton law?
    Mr. Ranneberger. I can to a degree, Congressman. Those 
negotiations are in what we hope will be their final stages 
right now. I don't--there's no deadline to finish that--but 
they're certainly moving along. And we have had a good deal of 
progress. I wouldn't want to say that we're going to reach an 
agreement. There's still some difficult outstanding issues. But 
what we've done basically is to get close to a framework in 
which there will be international investment disciplines which 
would significantly deter foreign companies from investing 
anywhere in the world, not just Cuba. This won't be Cuba 
specific, but it will apply in a big way to Cuba, in 
confiscated property. And we're close to putting that kind of 
framework together. What you would have is, you would have 
penalties in effect, for companies who did invest in 
confiscated property.
    Mr. Rangel. As a diplomat, would you describe this policy 
that we've had with Cuba for the last 35 years as a successful 
foreign policy?
    Mr. Ranneberger. Well, I think it's been a policy that has 
had significant impact on Cuba. If you define success as a 
democratic Cuba, of course, I have to say it has not been 
successful. I guess when I'm often asked that question, and I 
am, of course, I tend to say well what is the alternative. And 
this is an argument--you're not making it--but others have said 
the sort of overall engagement with the Cuban Government is the 
way to do--you sort of embrace them--love them to death, so to 
speak.
    My response to that is that that's been going on now for 
3\1/2\ decades by most of the world. I mean, you've had many 
world leaders who have been down there. They've spent 8, 10, 
12, 14 hours talking to Castro. It has not resulted in an iota 
of change in that political system. So, I think our policy has 
as much chance of success as an engagement policy and I would 
point out that our policy has only really had a biting impact 
since the Soviet subsidies have ended. That is a very important 
point.
    Mr. Rangel. And you see a major difference between how we 
deal with Communist Cuba and how we deal with Communist China 
and Communist North Vietnam and Communist North Korea? Do you 
think there's a dramatic difference in how we do these things, 
as a diplomat?
    Mr. Ranneberger. There are certainly tactical differences 
in the way we approach it. We do have, and I think the 
President has been very clearly on record, we do have the same 
goals in each case. Our goals are to advance democracy and 
human rights, they're to promote U.S. interest in terms of 
business and commercially, and also the U.S. national security 
interest.
    My response to that is frankly, that we use different 
tactics appropriate to a given situation. And I think it's very 
clear that a unilateral embargo would have zero impact on 
China, which is thousands of miles away. A unilateral embargo 
on Cuba, I think clearly, demonstratively, does have an impact, 
as an element of pressure. So I think there are reasons for the 
differences.
    Mr. Rangel. But if our President decided that he wanted to 
change the policy in Cuba, you would have no problem in 
adjusting to that, would you?
    Mr. Ranneberger. I'm a professional diplomat. Obviously, I 
would----
    Mr. Rangel. Thank you.
    Mr. Ranneberger [continuing]. Defend whatever policy. 
[Laughter.]
    Chairman Crane. Mr. Neal.
    Mr. Neal. Nice to see you again. That was skillfully 
stated. Mr. Ranneberger, what comes first, religious reforms, 
economic reforms, or political reforms?
    Mr. Ranneberger. I wouldn't want to--a lot of people who 
look at changes in regimes say that economic reforms come 
first, and then political reforms follow. I think there are 
lots of reasons to question that logic. It hasn't happened yet 
in China. It certainly hasn't happened in Vietnam. It hasn't 
happened in a lot of other places.
    I think that you sort of can't accept that argument. I 
would say that if there are going to be economic reforms, they 
should live in tandem with political reforms. So, I don't think 
in all honesty that you can say one has to come first, as 
opposed to another. If there were real economic reforms in 
Cuba, and there haven't been, but if there were real economic 
reforms in Cuba, and if they precipitated some degree of 
political change, obviously that would be positive.
    We think that the religious opening is a positive 
development, but it has not led to any degree of political 
opening. In fact, since the Pope's visit to Cuba, there have 
been, and I saw some figures thrown out today, we can certainly 
confirm that there have been at least 20 arrests, and of course 
there are many that we don't know about. And again, certainly 
the vast majority of the dissidents remain in jail. So we 
haven't seen it lead to a political opening. We want to support 
the religious opening and space that that might give to civil 
society and that's why the President has taken these steps that 
he has.
    Mr. Neal. Are you satisfied that the religious opening that 
has occurred, that Castro's lived up to his part of the 
bargain?
    Mr. Ranneberger. We, of course, don't want to get into the 
middle of any discussions between the Catholic Church and the 
Cuban Government. Looking at it objectively as an outsider, I 
think it's been a mixed bag frankly. The Cuban Government had 
committed to give the church access to the media. They have 
given the church permission to have open air religious 
activity. They told the church that it would be allowed to 
expand publications and such. And not all of that has happened. 
There have been some open air Masses and such, but it's been a 
very limited thing.
    So, I think it's still in the early stages. I think it's 
too early to say that the Castro government has lived up 
completely to its end of the bargain or hasn't. I think it has 
lived up to some parts of it. I think it's early and I think 
hopefully we will see an evolution of this.
    Mr. Neal. Thank you. Thank you, Mr. Chairman.
    Chairman Crane. Mr. Becerra.
    Mr. Becerra. Thank you, Mr. Chairman. And by the way, thank 
you, Mr. Chairman, for allowing me to sit in on this 
Subcommittee hearing, since I'm not a Member of the 
Subcommittee itself.
    Let me see if I can focus on a couple of quick questions, 
Mr. Ranneberger. I'd like to ask you a little bit about what 
DOD just released recently on the potential threat of Cuba, 
militarily or to our security interest, and also see if I can 
get you to comment a bit on the recent changes that were 
proposed by the administration with regard to liberalizing some 
of its dealings with the Cuban Government.
    First, if you could give me some sense as to how you or the 
Department of State is interpreting the Department of Defense 
report with regard to Cuba as a threat.
    Mr. Ranneberger. Sure. The Department of Defense in 
releasing the report yesterday has made clear that this was an 
intelligence assessment. So, I'm not going to comment, of 
course, in detail on intelligence information or methods. I 
would like to quote though, I think, in answering your 
question, Congressman.
    It would be appropriate to quote from the letter that 
Secretary Cohen has sent to Chairman Thurman, in which he 
states, ``While the assessment notes that the direct 
conventional threat by the Cuban military has decreased, I 
remain concerned about the use of Cuba as a base for 
intelligence activities directed against the United States, the 
potential threat that Cuba may pose to neighboring islands, 
Castro's continuing dictatorship that represses the Cuban 
people's desire for political and economic freedom, and the 
potential instability that could accompany the end of his 
regime.'' And then he goes on to cite some other areas.
    So, my point there being, Congressman, that we--to say that 
Cuba is not a conventional military threat, which it clearly 
isn't in today's world--you wouldn't want to ignore or set 
aside all the other related security issues.
    Mr. Becerra. So, the Department of Defense is saying and 
you're agreeing with what they're saying with regard to the 
issue of conventional threat, that Cuba, at least at this stage 
is not a conventional weapons threat or an adversary with 
regard to conventional weapons that we must worry about for our 
own national security safety.
    Mr. Ranneberger. With respect to a conventional threat 
directed at the United States, that's true, with the caveat--
just because I want to make it, it's important--that of course, 
it depends--well a lot of it depends--and I learned a lot in 
reviewing this report on terminology--but certainly I wouldn't 
want to set aside the fact that the government shot down the 
aircraft and that kind of ability----
    Mr. Becerra. Right. I want to get into that, but I want to 
make sure--in terms of a conventional threat, a country that 
could be hostile toward us and menace us, we no longer hold 
that position as we at one point did when we thought that there 
was a chance that they could cause us real problems with the 
Soviet Union, having bases and missiles, and so forth. But 
there are threats, and those I think Secretary Cohen does 
identify. And I know some of them have to do with transshipment 
of drugs, also the intelligence factor.
    How do we best approach those types of threats that have 
been identified by the Department of Defense? How do we best 
undermine the opportunities for Cuba or any elements in Cuba to 
threaten our security, whether through intelligence gathering 
or through drugs transshipment?
    Mr. Ranneberger. I think that you have to do that in 
several ways. First of all, obviously a change in the nature of 
the regime itself would affect that threat. So, there's an 
overall goal of trying to get democratic change.
    Mr. Becerra. Fine. Let me make sure I understand something. 
So you're implying that the reason there is an intelligence 
threat and a drug transshipment threat is because of the 
government in place?
    Mr. Ranneberger. I think that contributes to the nature of 
the threat, absolutely.
    Mr. Becerra. Would you say that if Mr. Castro were removed 
that the problem of drug transshipments would be gone?
    Mr. Ranneberger. Well, I don't think it comes down--and so 
often we tend to talk about Castro--I always like to say, it's 
not simply an issue of one man, it's an issue of the system. 
So, I would say if there's a system change, that could--that 
would--I think, likely diminish the nature of a threat, if it 
were a democratic change.
    Mr. Becerra. If we had a greater presence in Cuba, whether 
it was through more commercial enterprise or perhaps more 
direct engagement government to government, would it be easier 
for us to try to diminish those intelligence or drug 
transshipment threats?
    Mr. Ranneberger. I'm not at all sure that it would be. As 
you know, we have a fairly sizable presence. I always point out 
that our interest section is, in fact, the largest diplomatic 
mission in Cuba. But, I think it comes down to the nature of 
the relationship, and I think, I guess, what perhaps you're 
getting at--or certainly--what I would say is, if you--
obviously, if you could normalize the relationship completely, 
that might be helpful. But we don't want to normalize a 
relationship with the regime that is undemocratic and 
repressive to its own people. Absent a full normalization like 
that, which we don't want to undertake with this type of 
regime, there are some things you can do.
    We have the migration accords, and we do have law 
enforcement cooperation on a case-by-case basis. I mean, there 
have been narcotic shipments intercepted. Last year, they 
intercepted 6.5 tons of cocaine with our assistance, and so 
there was prosecution here. So we are doing something to combat 
some of these threats.
    Mr. Becerra. Mr. Chairman, if I may ask one last question. 
In Guatemala, we recently learned that an archbishop was 
assassinated in a very brutal way and many have indicated that 
there might be ties to previous death squads and perhaps there 
might be some link to the government or those elements either 
in government or related to government. We also know that in 
other countries, whether Latin America or abroad, we've seen 
real troubles with government protecting the basic rights, 
civil rights, human rights, of some of its own peoples. We 
continue to maintain full normalized relations with some of 
those governments--some of those that are beginning or trying 
to establish democracy.
    If we continue to see problems persisting in some of those 
so-called democratic countries, should we maintain full 
relations or should we go somewhere toward the relationship 
that we have right now with Cuba, where we break relations to 
try to encourage further democratization?
    Mr. Ranneberger. Again, I think it depends on each 
situation. I would point out that when I was Deputy Director of 
Central American Affairs between 1992 and 1994, we had exactly 
such a case, where the then-President Serrano of Guatemala, 
initiated an auto coup, which sort of basically ended the 
democratic system. There was a 2-week period in which we 
basically got things back on track. But, we threatened them 
with severe bilateral repercussions. There were steps taken 
against Guatemala at that time and they were threatened with 
suspension from the OAS if democracy hadn't been restored. And 
so, that pressure got the democratic system reinstituted in 
Guatemala.
    In Paraguay, where the democratic system--there had been 
some problems that you're aware of--we've made very clear that 
we expect that system to continue. It must continue in order 
for them to be a fully normal relationship. So I think we've 
made these criteria fairly universal in our relations with the 
Latin countries.
    Mr. Becerra. Can you give any--and the final question I'll 
ask, Mr. Chairman--you said a case-by-case analysis. Can you 
think of any country where you would apply a more rigorous 
standard where we might drop full relations or normalize 
relations with a country?
    Mr. Ranneberger. No, I can't. I mean, I think that with 
Latin America right now, we are dealing with countries where 
there is a basic democratic system in place. There are 
imperfections. I mean, there are imperfections everywhere. And 
clearly, one of the focuses of the Summit of the Americas, as 
you know from following it, is the whole issue of 
institutionalizing democracy and working to strengthen 
democratic institutions. That's a major focus.
    And in fact, it's because of that, that we're particularly 
concerned about the situation in Cuba, because it runs counter 
to the whole trend in the hemisphere. If one saw political 
change, democratic change on the way in Cuba, I think that 
would change the nature of the discussion. But the fact is that 
we're just not seeing that.
    Chairman Crane. Mr. Jefferson.
    Mr. Jefferson. Thank you, Mr. Chairman. Let me ask you, 
does our economic embargo have any affect for good or for ill 
on our other U.S. trading partners in the Western hemisphere, 
particularly on Mexico or maybe even with Canada?
    Mr. Ranneberger. I don't think it has any sort of economic 
impact in terms of their earnings or ability to deal with Cuba. 
Again, any country can sell or trade with Cuba. Where the 
Libertad Act does have an impact on Canada, Mexico, and others, 
is if they are investing in Cuba. And there, of course, it's 
only if they are investing in confiscated property. The 
Libertad Act doesn't say you can't invest in Cuba; it says you 
can't invest in confiscated U.S. property. And there have been 
cases where we've taken action against Mexican and Canadian 
companies for investing in confiscated property.
    Mr. Jefferson. Tell me, what properties have been covered 
by these actions?
    Mr. Ranneberger. I'm sorry, Congressman?
    Mr. Jefferson. What properties have been involved in these 
actions?
    Mr. Ranneberger. What properties? In the case of Mexico, it 
was group called Grupo Domos, and they were investing in a 
cement plant, which had been owned by Lonestar--not by 
Lonestar, but by Lonestar, in fact, in Cuba, which is a U.S. 
company based, I believe, in Texas. We took action against 
Grupo Domos. They subsequently pulled out of the plant. They're 
no longer involved in that and we've given their visas back; 
right to travel to the United States.
    In the case of Canada, it's Sherritt, which is using the 
Moa Bay Mining Co., which is a nickel mining facility, which 
was owned by the Moa Bay Mining Co., which was a U.S. company. 
And we've found a number of Sherritt executives excludable from 
the United States and prohibited them from coming into the 
United States.
    Mr. Jefferson. Haven't we had some recent problem with a 
pharmaceutical company that's doing business in South Africa 
that has chosen to do business also with Cuba--some triangle 
issue like that, that you're aware of?
    Mr. Ranneberger. Yes, there is an issue. What happened is 
there was a U.S. company which had purchased the majority 
interest in a South African company. It turned out that that 
South African company had certain contracts in process with a 
Cuban entity. And of course the U.S. company was prohibited 
from carrying out those contracts under the U.S. embargo.
    Mr. Jefferson. So where does that stand now?
    Mr. Ranneberger. I haven't checked on it recently. I'd have 
to get back to you exactly where it stands. Basically, the 
company simply can't proceed with the sales to the Cubans.
    [The following was subsequently received:]

    On January 9, 1998, Sanachem Holdings, Inc. (``Sanachem''), 
a South African subsidiary of the Dow Chemical Company 
(``Dow'') applied for a license to authorize performance under 
a February 1992 contract with Quimimport (Cuba), as modified in 
August 1997 (the ``Contract''). Sanachem requested 
authorization to deliver all further shipments to Cuba and to 
complete the performance called for under the Contract.
    Sanachem, at the time of license application, was owed 
approximately USD $20.2 million for shipments that occurred 
between 1995 and 1997 under the Contract. Dow acquired Sanachem 
in December of 1997.
    The Contract is property in which Cuba or a Cuban national 
has an interest for purposes of Sec. 515.201 of the CACR. OFAC 
declined to license any continued performance under the 
Contract by Sanachem or Dow, and Dow's license application for 
the same was denied.
    OFAC, however, did issue a license to authorize Sanachem to 
receive amounts that were due to Sanachem under the Contract 
for sales to Quimimport which occurred prior to Dow's 
acquisition of Sanachem.
      

                                


    Mr. Jefferson. Has this created a substantial problem 
between our government and the South African Government?
    Mr. Ranneberger. Well, I think that the South African 
Government clearly is unhappy about the situation. Beyond that, 
I don't think I'd want to comment here.
    Mr. Jefferson. Do we run into problems like that around the 
rest of the world, not just in this hemisphere, but in other 
parts of the world as well?
    Mr. Ranneberger. It has come up. Again, Congressman, the 
issue here should be addressed more precisely by the Treasury 
Department, but it comes up from time to time. I'm not aware of 
a lot of cases. Since I've been in Cuban affairs the past 3 
years, there have been a few cases that I'm aware of. I'm not 
aware of a lot of cases.
    Mr. Rangel. Would the gentleman yield on that point?
    Mr. Jefferson. Yes, I'd be happy to.
    Mr. Rangel. Are you aware of the press conference that 
President Clinton had in South Africa with President Mandela?
    Mr. Ranneberger. Generally, I'm not sure--I'm not sure what 
you're referring to, Congressman.
    Mr. Rangel. It was a beautiful press conference where 
President Clinton said how much he loved Africa and Mandela was 
saying how much he loved America. It was a great press 
conference. And then someone asked him something about a trade 
bill and President Mandela went off and said the United States 
really doesn't pick the friends of South Africa, and he was 
referring to Cuba. So, that never came to your attention--that 
incident that obliquely was referred to by Mr. Jefferson, where 
the whole press conference was about to blow because of remarks 
that President Mandela made about Helms-Burton. He didn't say 
that, but that was an American chemical company that was in 
South Africa and the incident he described.
    Mr. Ranneberger. No, I----
    Mr. Rangel. I just wanted to know--it was a real source of 
embarrassment to those of us that were over there, but I just 
wondered whether your office was sensitive to that?
    Mr. Ranneberger. We were sensitive to it, and I am aware of 
what you're talking about, Congressman. And of course, we had 
prepared briefing information on this issue. We knew it would 
come up certainly, and people had been prepared. It's a very 
difficult issue because of course, the embargo is law and there 
are only certain ways to make exceptions.
    Mr. Jefferson. Thank you. I don't have much time left. Let 
me ask--has Cuba undertaken any what you might characterize as 
significant economic reform in the last few years?
    Mr. Ranneberger. No, I don't consider there to have been 
any significant economic reforms. There have been some minor, 
very limited, economic reforms and I could mention what they 
are. They've got now a list--I think it's 125 or 150 areas--
where people can do so-called family enterprises. You can't 
hire outside of your family. And there are things like bicycle 
repair, shoe repair, and the like. They've allowed people to 
open up restaurants; you can't have any more than 12 seats. 
These are not systemic reforms in terms of allowing a small 
private sector to develop.
    They then introduced last year, or the year before, a tax 
system which has very large tax requirements for these private 
entrepreneurs. As a result, these private entrepreneurs had 
amounted to about 250,000 people perhaps in an island of 11 
million. That figure apparently is down now to about 180,000 
because of their inability to pay these taxes.
    So, they have done some cosmetic things in order to look 
more like a modern country. They've created a central bank, and 
they've got some different subsidiary banks, that sort of 
thing. But there hasn't been anything that I would characterize 
as systemic economic reform.
    Chairman Crane. Mr. Becerra has one final question before 
you run to the airport.
    Mr. Ranneberger. Sure.
    Mr. Becerra. Thank you, Mr. Chairman. I'll make it brief. 
And I apologize, because I was not here for the first panel, 
but I understand there was a little discussion--often times, 
people are asked--Cuba is a smaller country and is close to us, 
but DOD says it's not a conventional threat. China, the largest 
country in the world; the largest Communist country in the 
world; certainly a large military; certainly the capacity--
nuclear capacity--to do some harm, not just to us, but to 
others; not only do we trade with them, we offer them most-
favored-nation trade status.
    What's the Department of State's response or comment--how 
do you respond to opening the doors to full trade negotiations 
status to China and not to a neighbor that's 90 miles away?
    Mr. Ranneberger. Congressman, that actually had come up and 
I want to go over it again, because it's an important question 
and it comes up all the time. What I have said is that clearly 
we have consistent policy goals throughout the world--promote 
democracy, human rights, U.S. commercial and business interest, 
and the national security per se. We apply different tactics 
that are appropriate to a given situation.
    Secretary Albright, and I always allude to it, because I 
can't say it any better, has said that we don't have a one-
size-fits-all policy. Obviously, you can't have A to Z, and 
we're going to implement A, B, and C here, and here, and here. 
You choose from a menu of options.
    In the case of Cuba, it's 90 miles away, a unilateral 
embargo can have, and is having, a significant impact, 
especially since the end of the Soviet subsidy. In China, 
imposition of a unilateral embargo would have very limited 
effect, and there are overriding issues there that require a 
relationship. We have spoken out--clearly, I think, and 
forcefully--on the human rights issue in China.
    And one other point that's worth noting, is that the 
economic reforms and the changes in the system in China have 
been vastly more than has occurred in Cuba. There's no 
comparison of those two situations. So there has been a degree 
of system change. It hasn't been political change. There hasn't 
been enough done--nearly enough--on human rights, and I think 
we've spoken out forcefully on that.
    Mr. Becerra. Thank you.
    Chairman Crane. Well, Mr. Ranneberger, we want to thank you 
for giving of your time and appearing before the Subcommittee 
and to wish you bon voyage.
    Mr. Ranneberger. Thank you, sir.
    Chairman Crane. Catch your plane. Our next panel consists 
of Richard O'Leary, chairman of H Enterprises International; 
Willard M. Berry, president, European-American Business 
Council; Robert Muse, principal, Muse & Associates; John S. 
Kavulich--I think I'm hopefully pronouncing it correctly--
president, U.S.-Cuba Trade and Economic Council; and our 
distinguished former colleague, Michael Barnes, representative 
of USA Engage.
    Please be seated and we'll proceed in the order which I 
presented you before the Subcommittee. And, again, let me 
remind you that the lights here can give you an idea of the 
timing, but please try and keep your oral presentations to 5 
minutes. And all written statements will be made a part of the 
permanent record.
    And you may start, Mr. O'Leary.

   STATEMENT OF RICHARD E. O'LEARY, CHAIRMAN, H ENTERPRISES 
INTERNATIONAL, INC., MINNEAPOLIS, MINNESOTA; ON BEHALF OF U.S. 
                      CHAMBER OF COMMERCE

    Mr. O'Leary. Thank you, Mr. Chairman. I appreciate the 
opportunity to testify on behalf of the U.S. Chamber of 
Commerce on U.S. economic and trade policy toward Cuba.
    Over the past five decades, the Chamber has consistently 
opposed the imposition of unilateral economic embargoes, 
sanctions, or boycotts as an instrument of U.S. foreign policy 
in the absence of a clear and overriding national security 
interest. That position has been maintained through several 
generations of business leaders, numerous economic cycles, and 
many variations of the national political environment because 
the fundamentals are constant.
    Historically, for over 2,000 years, the unilateral 
imposition of economic sanctions by nations has not proven to 
be effective in obtaining stated objectives.
    Historically, the unilateral imposition of economic 
sanctions by the United States has never achieved the 
sanctions' stated objectives or materially altered the target 
country's objectionable behavior.
    Historically, though devoid of substantive benefits, 
impositions of unilateral economic sanctions by the United 
States has been accompanied by high costs when measured by the 
adverse effects on the quality of life on adults and children 
in target companies, the loss of economic opportunities for the 
American work force and business community, and the impairment 
of relations with nontarget nations which generally oppose such 
unilateral actions and/or disagree on the merits of specific 
applications.
    Historically, America's values and interests and the cause 
of democracy have best been advanced by sustained involvement 
in international trade that expands market economies and raises 
standards of living--the crucial ingredients in nurturing 
political--freemen--freedom and respect for human rights.
    We submit that it should be apparent that the U.S. economic 
and trade policy toward Cuba for the last four decades has 
failed to remove Fidel Castro as the head of state or even 
materially weaken the political control of high government; 
failed to enhance the development of democratic values in Cuba; 
failed to attract the meaningful support of any other nation; 
impaired our relations with our most important allies and 
trading partners to the point of retaliation; condemned 11 
million men, women, and children 90 miles from our border to a 
standard of living that features inadequate availability of 
critical medical resources and substandard nutrition; and 
denied American workers the benefits that would otherwise flow 
from the economic opportunities that are now foreclosed to the 
U.S. business community.
    Mr. Chairman, the foregoing assessment underscores the 
Chamber's recommendations that Congress should immediately 
enact legislation to lift restrictions on the sale of medicine 
and food to Cuba. Our regard for human rights is surely above 
the level reflected by the punitive consequences of our current 
policy. It is time to get away from the fallacious notion that 
there is or has to be conflict between business and 
humanitarian interests.
    Second, the Congress should enact legislation to facilitate 
reestablishing economic relations with Cuba. No other 
authoritarian regime has been able to resist the movement 
toward a more open society after engaging commerce with nations 
driven by democratic values. In short, we support Congressman 
Rangel's bill.
    Third, Congress should enact legislation that facilitates 
the building of institutions necessary for Cuban society to 
engage in open relationships with the world's market economies. 
We also endorse the Hamilton-Crane-Lugar standards of 
accountability for imposing economic sanctions.
    Mr. Chairman, as one last comment, I would like to offer 
for the record, an excerpt from Forbes magazine of March 23, of 
which we do not endorse the editorial comments, but it provides 
a really nice single snapshot of the dramatic effect that our 
unilaterally imposed embargo has had on the people of Cuba, 
which has degenerated the gross domestic product of Cuba from 
about $1,800 a person down to $1,300 a person over the time, 
and illustrates the opportunity that's available if they just 
had an open market approach, which we would encourage, which 
would have had them growing from that same $1,800 to over 
$4,100.
    [At the time of printing, no excerpt had been received.]
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Richard E. O'Leary, Chairman, H Enterprises International, 
Inc., Minneapolis, Minnesota; on Behalf of U.S. Chamber of Commerce

    My name is Richard E. O'Leary. I am Chairman of H 
Enterprises International, based in Minneapolis, Minnesota. I 
am a Member of the Board of Directors of the U.S. Chamber of 
Commerce and its International Policy Committee. I am also 
Chairman of its Finance Subcommittee. I appreciate this 
opportunity to testify on behalf of the U.S. Chamber of 
Commerce on U.S. Economic and Trade Policy Toward Cuba.
    Over the past five decades, the Chamber has consistently 
opposed the imposition of unilateral economic embargoes, 
sanctions or boycotts as an instrument of U.S. foreign policy 
in the absence of a clear and overriding national security 
interest. That position has been maintained through several 
generations of business leaders, numerous economic cycles and 
many variations of the national political environment because 
the fundamentals are constant:
     Historically, for over 2,000 years, the unilateral 
imposition of economic sanctions by nations has not proven to 
be effective in obtaining stated objectives;
     Historically, the unilateral imposition of 
economic sanctions by the United States has never achieved the 
sanctions' stated objectives or materially altered the target 
countries' objectionable behavior;
     Historically, though devoid of substantive 
benefits, imposition of unilateral economic sanctions by the 
United States has been accompanied by high costs when measured 
by the adverse effects on the quality of life on adults and 
children in target countries, the loss of economic 
opportunities for the American work force and business 
community and the impairment of relations with non-target 
nations which generally oppose such unilateral actions and/or 
disagree on the merits of specific applications; and
     Historically, America's values and interests and 
the cause of democracy have best been advanced by sustained 
involvement in international trade that expands market 
economies and raises standards of living--crucial ingredients 
in nurturing political freedom and respect for human rights.
    We submit that it should be apparent that the U.S. economic 
and trade policy toward Cuba for the last four decades has:
     Failed to remove Fidel Castro as the head of state 
or even materially weaken the political control of his 
government;
     Failed to enhance the development of democratic 
values in Cuba;
     Failed to attract the meaningful support of any 
other nation;
     Impaired our relations with our most important 
allies and trading partners to the point of retaliation;
     Condemned eleven million men, women and children 
ninety miles from our border to a standard of living that 
features inadequate availability of critical medical resources 
and sub-standard nutrition; and
     Denied American workers the benefits that would 
otherwise flow from the economic opportunities that are now 
foreclosed to the business community.
    Mr. Chairman, the foregoing assessment underscores the 
Chamber's recommendations that:
     Congress should immediately enact legislation to 
lift restrictions on the sale of medicine and food to Cuba. Our 
regard for human rights is surely above the level reflected by 
the punitive consequences of our current policy. It is time to 
get away from the fallacious notion that there is or has to be 
conflict between business and humanitarian interests.
     Congress should enact legislation to facilitate 
reestablishing economic relations with Cuba--no other 
authoritarian regime has been able to resist the movement 
toward a more open society after engaging commerce with nations 
driven by democratic values.
     Congress should enact legislation that facilitates 
the building of institutions necessary for Cuban society to 
engage in open relationships with the world's market economies.

      What criteria should govern U.S. economic sanctions policy?

    Recent history is replete with examples of U.S. unilateral 
economic actions with the stated purpose of penalizing various 
other countries to advance U.S. foreign policy interests. The 
widespread impact of U.S. unilateral sanctions has been 
documented by several recent studies. The Institute for 
International Economics recently concluded that U.S. unilateral 
sanctions cost the U.S. economy 200,000-250,000 jobs in 1995 
and reduced U.S. exports by $15-20 billion. A recent report by 
the President's Export Council also concluded that U.S. 
unilateral sanctions now threaten 75 nations representing 52% 
of the world's population.
    Yet, those actions failed to alter materially the target 
countries' objectionable behavior. Instead, erstwhile allies 
castigate U.S. foreign policy, while the regimes we target gain 
support and U.S. businesses and their workers bear the burden 
of market opportunities lost to Asian and/or European 
competitors.
    America's values and interests are best advanced by 
sustained involvement in world affairs by both the public and 
private sectors. The expansion of free market economies and 
rising living standards are crucial ingredients of political 
freedom and respect for human rights. It is difficult to 
imagine circumstances which would not be better addressed in 
concert with our allies and trading partners. Before proceeding 
unilaterally, the U.S. government should adopt a standard of 
ongoing accountability, so that unilateral foreign policy 
sanctions are evaluated by:
     Whether they achieve their intended results
     The costs imposed upon Americans in terms of lost 
jobs and reduced incomes.
     The potential sacrifice of other national 
interests.

              The Helms-Burton Act and Cuba-U.S. Relations

    The Helms-Burton Act clearly fails to comply with such a 
standard of ongoing accountability. Building on earlier 
executive actions and the Cuban Democracy Act, the Helms-Burton 
Act codified for the first time the nearly four decades-old 
U.S. embargo against Cuba. Significantly, the Act also 
established a new right of action by U.S. nationals against 
persons--including non-U.S. nationals--who ``traffic'' in 
expropriated property to which the U.S. nationals own claims. 
The Act also directs that non-U.S. nationals involved in the 
confiscation of, or trafficking in, such property be denied 
entry into the U.S. except for certain medical reasons or to 
litigate a claim. In other words, the Helms-Burton Act 
established in law a process for the imposition of a secondary 
boycott against third country interests engaged in activities 
proscribed under the Act (a practice which U.S. policy condemns 
in Arab countries when it has been applied to third parties 
doing business with Israel).
    To paraphrase and summarize section 3 of the Helms-Burton 
Act, its purposes include (but are not limited to): (1) 
assistance to the Cuban people in regaining their freedom; (2) 
strengthened international sanctions against Castro; (3) 
provision for the continued U.S. national security; (4) 
encouragement of free and fair elections in Cuba; (5) provision 
of a ``policy framework'' to the Cuban people in response to 
the formation of a transition or democratically elected Cuban 
government; and (6) protection of U.S. nationals against 
trafficking in expropriated property. Some of these purposes 
thus provide a useful benchmark against which to measure 
changes in Cuba, and changes in Cuba's relationship with the 
U.S. and other countries.
    First, are Cuban people freer as a result of the enactment 
of the Helms-Burton law? Embargo supporters frequently look to 
the removal or withdrawal of Fidel Castro from power as a 
necessary precondition for greater freedom in Cuba. That may be 
true. But last October, at the fifth Cuban Communist Party 
Congress, Castro was reaffirmed as head of the party. And on 
February 24, Castro was ``re-elected'' as President of Cuba in 
the usual mechanical fashion. Moreover, there has been as yet 
no change in the makeup of the Cuban governmental system that 
would suggest any new departure from Castro's long-standing 
mode of governance. After four decades, Castro's governmental 
and security apparatus remain largely in place. Despite clear 
evidence of the freedom-enhancing effects of U.S. engagement in 
other authoritarian countries, no such opportunity yet exists 
in Cuba.
    Second, are there strengthened international sanctions in 
place? On the contrary, not only are our major trading 
partners/competitors not emulating U.S. policy, but some of 
them--Canada, the European Union (EU), Mexico--have actually 
put in place laws that make compliance with Helms-Burton 
actionable if not illegal in their own countries. This 
international sentiment in opposition to U.S. policy has been 
demonstrated repeatedly since the recent Papal visit in ways 
too numerous to detail in the limited time available for this 
hearing. All of this serves to supplement long-standing, 
widespread international refusal to emulate the U.S. embargo. 
The U.S.-Cuba Trade and Economic Council has noted that all of 
the other large ``G-7'' industrial economies are well 
represented among an estimated 4,500 non-U.S. foreign companies 
commercially active in Cuba. as of December 1997, and that 
announced foreign investment in Cuba since 1990 exceeds US$5.55 
billion, with actually committed or delivered investment 
exceeding US$1.24 billion.
    Third, does Helms-Burton enhance U.S. national security? 
Eminent U.S. military authorities say Cuba does not pose a 
threat. On January 13, General John J. Sheehan, former Supreme 
Allied Commander of Atlantic Forces who was once responsible 
for the Cuban migrant camps at Guantanamo Bay, stated at a U.S. 
Chamber of Commerce press conference simply that Cuba ``does 
not present a military threat to the United States.'' And more 
recently, on April 27 General Charles Wilhelm, Commander-In-
Chief of the U.S. Southern Command, not only gave a similar 
assessment but went beyond that by saying that Cuba and the 
U.S. shared some common problems--such as ``counter-
narcotics''--and that there was ``definitely a possibility'' 
that Cuba and the U.S. could work together on them. But despite 
these assessments, the U.S. embargo against Cuba imposes harsh 
restrictions in areas such as food and medical sales that are 
not applied to countries--such as Iraq and North Korea--whose 
regimes are no less harsh and whose agendas clearly pose a much 
greater threat to vital U.S. interests.
    Fourth, has Helms-Burton encouraged free and fair elections 
in Cuba? As noted above, Castro's hold on power in Cuba remains 
strong despite two years of Helms-Burton ``leverage'' intended 
to release his grip on power. Such leverage cannot succeed 
through forced unilateral isolation. Throughout the U.S. and 
around the world, individual liberty and free enterprise go 
hand in hand. Each fosters the other. By their very presence 
and operations, American companies and expatriate communities 
take second place to no one in their contributions to economic 
and political freedom in their host countries. Continuing U.S. 
company presence and engagement abroad are critical to the 
inculcation of these values.
    Fifth, does Helms-Burton provide a viable ``policy 
framework'' for the formation of a transition or 
democratically-elected Cuban government? Title II of Helms-
Burton spells out such a framework which, if implemented, could 
justify suspension of the U.S. embargo, to the extent that such 
steps would contribute to a ``stable foundation'' for a 
democratically-elected government in Cuba. However, the fact is 
that the unilaterally-imposed embargo has created an 
environment in which these conditions cannot be realized.
    Sixth, does Helms-Burton protect U.S. nationals against 
trafficking in expropriated property? Such property was 
expropriated as far back as the early 1960s. Shortly 
thereafter, the U.S. government established a Cuban claims 
program, administered by the Treasury Department. Today, four 
decades later and after all other claimant countries have 
settled their claims, and more than two years after Helms-
Burton's enactment, there is little or no evidence that the 
statute has contributed materially to any resolution of the 
U.S. claims arising from the expropriation of nearly forty 
years ago.

            The Helms-Burton Act and U.S.-European Relations

    One of the Helms-Burton Act's purposes was to rally 
international support for the imposition of change on Castro's 
regime. However, in reality, Helms-Burton has clearly strained 
our economic and political relations with other, far more 
significant trading partners, while failing to achieve its 
stated purposes.
    Some are suggesting that the EU's recent decision not to 
renew its WTO complaint should be construed as U.S. progress in 
``bringing'' Europe around to our point of view. However, it 
should be obvious that the EU is fully prepared to resume its 
battle against us on this front if the U.S. starts to implement 
Helms-Burton.
    Negotiations conducted pursuant to a fundamentally flawed 
and ineffective policy--executed, by the way, from a position 
of weakness, not of strength--cannot be expected to succeed. 
The cause of democracy in Cuba will be best served by allowing 
Americans to travel to and do business in Cuba--and in so 
doing, helping to export our democratic values to that country. 
Even if the EU was not actively promoting democratic change in 
Cuba, it makes no sense to impose or threaten sanctions against 
the EU when our own law effectively prevents us from doing it 
ourselves.

                               Conclusion

    It is fair to say that the only material contribution 
arising from the continuing unilateral U.S. embargo of Cuba--
which was codified and expanded with the 1996 enactment of the 
Helms-Burton legislation--was to confer quasi-martyr status on 
Castro's regime by permitting its subjects to focus on an 
external enemy, namely, the United States. With the enactment 
of Helms-Burton, the Cuba embargo has mutated into a secondary 
boycott of a variety of Canadian, European and other 
interests--thereby compelling these far more important allies 
and trading partners to protect their own interests by enacting 
blocking statutes and otherwise backing into an implicit 
alliance with Castro's regime. If the United States hopes to 
contain and eventually reverse this damage--and at the same 
time enhance commercial and democracy-building opportunities 
for Americans and Cubans alike--it has no real choice but to 
end the embargo and work toward normal relations with a small, 
non-threatening nation only ninety miles offshore.
    I appreciate this opportunity to testify before this 
Subcommittee. I will be happy to try to answer any questions.
      

                                


    Chairman Crane. Thank you.
    Mr. Berry.

  STATEMENT OF WILLARD M. BERRY, PRESIDENT, EUROPEAN-AMERICAN 
                        BUSINESS COUNCIL

    Mr. Berry. Thank you, Mr. Chairman and Members of the 
Subcommittee for this opportunity to testify.
    I'm Willard Berry, president of the European-American 
Business Council. We're an organization of U.S.- and European-
owned companies. We provide actionable information on policy 
developments and work with officials on both sides of the 
Atlantic to secure a more open trade and investment 
environment.
    Today, I would like to focus on the impact that U.S. policy 
toward Cuba has had on business and on relations with our 
allies. I hope that my testimony today will make one point 
clear and that's that our economic policy toward Cuba has a 
cost.
    The cost to the U.S. economy goes beyond the business 
opportunities lost because we do not trade or invest with Cuba. 
We also must suffer through disputes with our allies who object 
to the extraterritorial application of U.S. law and the costs 
to their companies. U.S. subsidiaries abroad suffer because 
they become caught between conflicting requirements, unable to 
obey both U.S. sanctions laws and foreign blocking statutes. 
Local U.S. economies bear part of the cost also when foreign 
investment goes elsewhere to avoid becoming entangled in 
sanctions.
    As this Subcommittee is well aware, the extraterritorial 
application of our embargo against Cuba has been one of, if not 
the, most important economic dispute between the United States 
and Europe over the last 2 years. When Helms-Burton was passed 
in 1996, the Council said that it would disrupt relations with 
Europe and get in the way of other important initiatives.
    There are many examples. One occurred just last week. The 
United States and the European Union have been discussing a 
broad trade initiative that might be launched at their 
bilateral summit on May 18. EU member states, most of whom are 
supportive of this idea, announced last week that any 
discussion of further bilateral liberalization will be put on 
hold if the United States and the European Union cannot settle 
the dispute over Helms-Burton.
    The European Commission estimates that the broad impact of 
that agreement would boost both economies by approximately 1 
percent of GDP annually.
    The Multilateral Agreement on Investment provides another 
example. Global investment is growing three times faster than 
trade. We have rules now, under the Uruguay Round Agreement, 
for trade but we have no global disciplines on investment. 
That's why the MAI is so important. The MAI, however, cannot be 
concluded without a resolution of the dispute over Helms-
Burton.
    Then there is the WTO. The WTO is likely to launch a new 
round of trade negotiations in 2000. Helms-Burton poses a major 
problem in the WTO for a number of things: Negotiation of 
investment rules under the WTO; broad U.S. and EU cooperation 
across a range of trade issues. Also Helms-Burton threatens the 
WTO more directly because of the potential for a dispute 
settlement case, which could undermine the credibility of the 
institution.
    Insofar as the impact on companies, the most immediate, of 
course, is that companies are denied trade and investment 
opportunities in Cuba. The U.S. extraterritorial laws, such as 
Helms-Burton, also, as I mentioned, create conflicting 
requirements. In response to the extraterritorial reach of U.S. 
policy toward Cuba, blocking legislation has been established 
in the European Union, Canada, and Mexico. An example: Wal-
Mart's Canadian subsidiary was caught by conflicting laws when 
it discovered it was selling Cuban-made pajamas.
    Last year, the Council conducted a study of the impact of 
sanctions on U.S. and European companies. We surveyed 42 
companies that, together, employ nearly 750,000 workers in the 
United States and 3 million worldwide. They average about $5 
billion in annual U.S. sales.
    Twenty-six percent of these companies said that they had 
been harmed by the type of conflicting requirements that have 
risen because of Helms-Burton. Helms-Burton itself had harmed 
64 percent of the companies surveyed, even though it had only 
been applied under limited circumstances.
    Our study documents the effects of sanctions. We know that 
when companies are hit by sanctions laws, they must reduce 
employment; they sometimes close plants and relocate operation.
    The costs of this policy seem particularly high considering 
the fact that unilateral economic sanctions have an abysmal 
record of effectiveness.
    Thanks again, Mr. Chairman and Members of this Subcommittee 
for the opportunity to testify.
    [The prepared statement follows:]

Statement of Willard M. Berry, President, European-American Business 
Council

                              Introduction

    Mr. Chairman and members of the committee, thank you for 
the opportunity to testify. I am Willard M. Berry, President of 
the European-American Business Council. The Council is the one 
transatlantic organization that provides actionable information 
on policy developments and works with officials in both the US 
and Europe to secure a more open trade and investment climate. 
Our 80 member companies include US- and European-owned firms--
therefore our work on trade, tax and investment issues is 
devoted to improving the business environment on both sides of 
the Atlantic. We are active on our own and through the 
Transatlantic Business Dialogue (TABD) in strengthening the 
economic relationship between the US and Europe, heading off 
trade disputes, and increasing US-EU cooperation in the World 
Trade Organization (WTO) and other multilateral fora. We aim to 
be the definitive source of knowledge and leading business 
advocate on US and European political activity affecting 
transatlantic companies.
    Today I would like to focus on the impact that US policy 
toward Cuba has had on business and on relations with our 
allies. I will leave it to the other experts here today to 
discuss the status of humanitarian efforts in Cuba and the 
effectiveness of the embargo we have maintained for almost 40 
years. I hope that my testimony today will make one point 
clear: that our economic policy toward Cuba has a cost. Fidel 
Castro bears part of the cost, the Cuban people bear part of 
the cost, the US economy bears part of the cost and, thanks to 
the extraterritorial nature of that policy, foreign companies 
including US subsidiaries bear part of the cost. The cost to 
the US economy goes beyond the business opportunities lost 
because we do not trade with Cuba and we do not allow our 
companies to invest in Cuba. We also must suffer through 
disputes with our allies, who object to the extraterritorial 
application of US law and the costs to their companies. US 
subsidiaries abroad suffer because they become caught between 
conflicting requirements, unable to obey both the US sanctions 
law and foreign blocking statutes. Local US economies bear part 
of the cost also when foreign investment goes elsewhere to 
avoid becoming entangled in sanctions.

                    Impact on US-European Relations

    As this subcommittee is well aware, the extraterritorial 
application of our embargo against Cuba has been one of, if not 
the most important, economic dispute between the US and Europe 
over the last two years. While Europeans were strongly opposed 
to the Cuba Democracy Act of 1992 and enacted blocking 
legislation to prevent its application to US subsidiaries in 
Europe, the Helms-Burton Act has brought tensions to much 
higher levels. When Helms-Burton was passed in 1996, the EABC 
said that it would disrupt relations with Europe and get in the 
way of other important initiatives. Well, just last week we saw 
a concrete example. The US and the European Union have been 
discussing a broad trade initiative that might be launched at 
their bilateral summit on May 18. EU Member States, most of 
whom are supportive of this idea, announced last week that any 
discussion of further bilateral liberalization will be put on 
hold if the US and EU cannot work out an agreement to settle 
the dispute over Helms-Burton. The European Commission has 
estimated that a broad trade agreement between the US and EU 
would boost both economies by an amount roughly equal to the 
impact of the Uruguay Round of the General Agreement on Tariffs 
& Trade. But before we can hope to capitalize on those gains, 
we must get by the problems caused by Helms-Burton.
    The proposed Multilateral Agreement on Investment (MAI) is 
similarly held hostage to Helms-Burton. Although, the MAI, like 
the proposed transatlantic trade agreement, faces a number of 
significant obstacles, it cannot be concluded without a 
resolution of the dispute over Helms-Burton. Hopefully, this 
can be achieved by the time MAI negotiations resume next Fall, 
or else we may see another direct cost of our economic policy 
toward Cuba. If the MAI can be concluded, it will offer 
immediate benefits. Recent investment liberalization in the US 
and other countries will be locked in, providing important 
certainty to business. Companies will be able to protect 
themselves from discriminatory actions by governments. The MAI 
will also establish protection for almost all kinds of 
investment, including facilities, inventory, financial assets 
and intellectual property. In addition, with OECD members such 
as Korea and Mexico signing on and a number of observer 
countries such as Hong Kong, Argentina, Brazil, Chile and 
Slovakia considering signing on immediately, the MAI will put 
pressure on other advanced developing countries to guarantee 
fair treatment in order to attract and retain investment.
    These initiatives are not likely to be the only ones 
disrupted if current US policy is maintained. The WTO is likely 
to launch a new round of trade negotiations in the year 2000. 
Helms-Burton, if maintained in its current form, would likely 
jeopardize any chance of negotiating global investment rules in 
the WTO and would also impair broader US-EU cooperation across 
the entire spectrum of trade issues. Helms-Burton also 
threatens the WTO more directly because of the potential for a 
dispute settlement case. The EU filed such a case last year, 
but agreed not to pursue it while negotiations are underway on 
an agreement on expropriated property and secondary boycotts. 
Such a case, if reinstated because of failure in those talks or 
because an EU company is sanctioned under Helms-Burton, could 
deal a serious blow to the WTO. The US has said it would claim 
a national security exemption for Helms-Burton, which would 
undermine the credibility of the multilateral dispute 
settlement system by suggesting that all manner of WTO-
inconsistent measures could be justified on similar grounds.
    The dispute between the US and EU caused by Helms-Burton 
has had very real consequences and will continue to disrupt 
important cooperative efforts unless the extraterritorial 
effects can be eliminated.

                        The Impact on Companies

    The most immediate impact that US Cuba policy has on 
companies is to deny them trade and investment opportunities in 
Cuba. Foreign companies, whose governments believe that the 
best way to bring about change in Cuba is through engagement, 
are taking advantage of these opportunities, just as US 
companies take advantage of the US policy of engagement with 
China and a number of other nations with questionable human 
rights practices. Some advocates of US Cuba policy have argued 
that when democracy eventually is established in Cuba, US 
companies will be welcomed because they stayed out during the 
Castro regime. I think it is more likely that the companies 
already established in Cuba will be in a much better position 
to benefit.
    US extraterritorial laws such as Helms-Burton also create 
conflicting requirements, which is a serious problem for 
business. Even when the company is not directly affected, the 
uncertainty created by conflicting laws makes it more difficult 
to conduct commerce effectively. In response to the 
extraterritorial reach of US policy toward Cuba, blocking 
legislation has been established in the European Union, Canada 
and Mexico.
    We have already seen real examples of companies caught by 
conflicting requirements. Wal-Mart's Canadian subsidiary was 
caught by conflicting laws when it discovered it was selling 
Cuban-made pajamas. In order to comply with US extraterritorial 
law, the company stopped selling the pajamas, only to become 
the target of an investigation under Canadian blocking 
legislation. The company decided to comply with local law and 
resume selling the pajamas and is at risk of penalties under 
the Cuba Democracy Act of 1992.

                          EABC Sanctions Study

    Last year, the EABC conducted a study of the impact of 
sanctions on US and European companies. We surveyed 42 
companies that together employ nearly 750,000 workers in the US 
and 3 million workers worldwide, and which each average about 
$5 billion per year in US sales. This study confirmed that US 
sanctions have had strong negative impacts on companies in the 
US and abroad and that the majority of multinational companies 
have lost business because of sanctions.
    Twenty-six percent of these companies said that they had 
been harmed by the type of conflicting requirements that have 
arisen because of Helms-Burton and the Cuba Democracy Act of 
1992. Helms-Burton itself had directly or indirectly harmed 64 
percent of the companies, even though it has only been applied 
under limited circumstances. Our survey demonstrates that even 
when companies are not directly affected, they are seen as 
unreliable suppliers and poor joint venture partners, making 
them less competitive because they are less able to form 
business relationships. Furthermore, foreign companies are less 
likely to invest in the US when they know their investments 
might make them subject to US sanctions. My written testimony 
includes the section of our studying analyzing the impact of 
Helms-Burton.
    We have found some people whose reaction to our study is 
that sanctions must be working if companies are being affected. 
To those people I would point out that the goal of these 
policies, I hope, is not to impair international business. US 
Cuba policy should not be deemed a success because US and 
European companies are being denied business opportunities. It 
is ironic that while all levels of government in this country 
are working hard to promote exports and attract investment in 
order to create jobs for their constituents, they are often 
counteracting these policies by enacting unilateral sanctions, 
such as Helms-Burton.

                           What is at Stake?

    It would be hard to overstate the benefits the US enjoys 
because of its economic relationship with Europe. When the US 
enacts extraterritorial economic sanctions, such as the Helms-
Burton Act, it disrupts trade and investment flows between the 
US and Europe and puts at risk millions of jobs on both sides 
of the Atlantic. Please allow me to cite a few statistics that 
demonstrate just what is at stake.
     Two-way trade between the US and the European 
Union in 1997 reached almost $300 billion--almost one billion 
dollars per day.
     That trade is nearly balanced--the US exported 
$141 billion to the EU, the EU exported $157 billion to the US.
     That trade is increasing rapidly--in 1987, two-way 
trade was about $140 billion, so it has more than doubled in 
the last ten years.
    Foreign investment between the US and Europe is equally 
robust.
     The US and Europe have an $800 billion stock in 
cross investment, with $416 billion of European investment in 
the US and $384 billion in US investment in Europe.
     Almost 42 percent of US foreign direct investment 
goes to Europe, and 56 percent of all European FDI goes to the 
US.
     European companies account for the largest share 
of foreign investment in 42 US states, and the second largest 
share in the remaining eight states.

                               Conclusion

    I hope that my testimony has made clear that our embargo of 
Cuba and, in particular, the extraterritorial extension of that 
embargo, imposes many costs on US companies, US workers and the 
US economy. Those costs are imposed because the US has decided 
that despite the fact that unilateral economic sanctions have 
an abysmal record of effectiveness, they are likely to achieve 
positive change in Cuba. This policy is maintained despite the 
fact that the US has decided that for many other countries that 
we hope to influence engagement is the best course.
    Thank you once again, Mr. Chairman and Members of the 
Subcommittee, for the opportunity to testify today. I would be 
happy to answer any questions.
      

                                


Secondary Trade and Investment Embargoes

    US secondary boycotts, which attempt to force foreign 
companies to choose between the US market or that of a target 
regime, were adopted in 1996 in the form of the Helms-Burton 
Act and the Iran and Libya Sanctions Act. Despite long-standing 
US and international opposition to the principle of secondary 
boycotts, these laws were enacted to restrict foreign company 
trade and investment in Cuba, Iran and Libya. The laws threaten 
multiple sanctions against companies outside the US in an 
attempt to make them comply with US foreign policy.
    Not surprisingly, the US secondary boycotts continue to 
invoke strong negative reactions from US allies and the 
international business community. The EU, in response to both 
laws, enacted blocking legislation to prevent European 
companies from complying with them, and began a WTO dispute 
settlement case against Helms-Burton. In addition, Canada 
strengthened and Mexico enacted blocking statutes and are 
considering action under the North American Free Trade 
Agreement. The US suffered criticism in many international fora 
and from the international business community. The US business 
community also has strongly opposed both measures.

            The Cuban Liberty And Democratic Solidarity Act

    On March 12, 1996, President Clinton signed the Cuban 
Liberty and Democratic Solidarity Act of 1996, or the Helms-
Burton Act. The law tightens the 35-year-old US embargo on Cuba 
by penalizing foreign firms for investing in former US-owned 
properties expropriated in the 1959 Cuban Revolution.
    The Helms-Burton Act applies two sanctions against non-US 
firms. First, US nationals are allowed a private right of 
action in US courts against companies investing in the 
expropriated US properties in Cuba, even if the US national was 
a Cuban citizen at the time of the expropriation. Second, the 
law requires the US State Department to deny US entry visas to 
the executives of foreign firms deemed to be ``trafficking'' in 
the properties. President Clinton has thus far waived the 
provision allowing a private right of action and is expected to 
do so throughout his term, citing positive steps taken by the 
EU countries with respect to Cuba. The provision denying US 
entry visas cannot be waived and remains in effect.
[GRAPHIC] [TIFF OMITTED] T5762.010


    The Helms-Burton Act already negatively impacts a large 
majority of companies operating in the US. Over 64 percent of 
survey respondents say that Helms-Burton affects their 
existing, planned or potential business operations. And 
although the law has only been applied under limited 
circumstances, it impacts the third largest share of companies 
of any of the sanction laws examined by the study. The effect 
is spread evenly among both US and European companies.

              RISKS ASSOCIATED WITH HELMS-BURTON SANCTIONS
------------------------------------------------------------------------
           Helms-Burton Sanction                 Most Common Effect
------------------------------------------------------------------------
DENIAL OF US ENTRY VISAS FOR FOREIGN        FEWER JOINT VENTURES
 EXECUTIVES.
ALLOW PRIVATE RIGHT OF ACTION IN US COURTS  LESS INVESTMENT IN THE US
 AGAINST OVERSEAS INVESTMENTS.
------------------------------------------------------------------------
EABC asked companies what effects would result if the sanctions in the
  Helms-Burton Act were applied to them. These are the effects cited by
  the largest number of companies.


    Denying US entry visas as authorized by the Helms-Burton 
Act threatens jobs and investment in the US. If denied US entry 
visas, nearly 48 percent of the companies surveyed say that 
they would be forced to reduce their US workforce. Over 40 
percent say this sanction would force them to reduce their 
investment in the US. Fifty-five percent of the companies say 
their joint venture opportunities would be threatened by visa 
restrictions, thus harming their competitiveness.
    Allowing lawsuits against overseas investments also would 
threaten US jobs and investment. Nearly a third of the 
companies surveyed say that this sanction would force them to 
reduce jobs and investment in the US. Nearly half of the 
European owned companies say that they would reduce their 
investment in the US if subjected to such suits.
[GRAPHIC] [TIFF OMITTED] T5762.011


    Automotive, high technology and telecommunications sectors 
report the greatest effect from Helms-Burton. In fact, every 
automotive company surveyed said that the law's existence has 
negatively affected its business operations. High technology 
sectors are also substantially impacted.
    International retaliation against Helms-Burton can pose 
additional difficulties for companies, trapping them between 
conflicting requirements. Nearly 20 percent of companies report 
being caught between the requirements of US extraterritorial 
sanctions laws and foreign blocking legislation. Because Helms-
Burton spurred European, Canadian, and Mexican countermeasures, 
US- and European-owned companies can be caught in the middle of 
a foreign policy dispute, facing serious penalties and 
sanctions regardless of whether a particular investment is 
maintained or withdrawn from Cuba.
      

                                


    Chairman Crane. Thank you.
    Mr. Muse.

         STATEMENT OF ROBERT L. MUSE, MUSE & ASSOCIATES

    Mr. Muse. Thank you, Mr. Chairman, Congressman Rangel, 
Members of the Subcommittee for allowing me to testify.
    There are two facets to my remarks. I want to comment 
briefly on the increasingly adverse effect on U.S. trade of our 
foreign policy toward Cuba, as that policy is set out in the 
Helms-Burton Act. The second part of my remarks will address 
the issue of the claims certified, against Cuba, by the Foreign 
Claims Settlement Commission on behalf of U.S. companies.
    I will attempt to place the issue of resolution of those 
corporate claims in the context of future U.S.-Cuba relations.
    The costs to the United States of our foreign policy toward 
Cuba is becoming ever greater. That policy is, of course, 
embedded in the Helms-Burton Act, and it is in fundamental 
conflict with the interests of the United States and its 
citizens in expanding and strengthening a rules-governed, 
stable world trade and investment order. What Mr. Berry pointed 
out a moment ago requires a reiteration.
    On April 27 at a meeting in Luxembourg, the European 
Union's Foreign Ministers rejected the request of the European 
Commission to launch a new round of discussions with the United 
States on trade liberalization. Among those proposals were: The 
elimination of tariffs on industrial goods; the opening up of 
trade and services; the removal of technical barriers to trade; 
and finally, the liberalization of investment and government-
tendering rules.
    It's important to ask why such an important project was 
derailed. The answer lies, in significant part, in U.S. foreign 
policy toward Cuba. On April 27, the European Ministers made 
clear in their communique that a resolution of the dispute with 
the United States over the extraterritorial provisions of 
Helms-Burton was ``a condition to the further development of 
trans-Atlantic trade.''
    I think many U.S. policymakers have been somewhat confused 
and baffled by the strength of European opposition to laws like 
Helms-Burton. It's not so much a dispute over policy. In large 
part, the U.S. policy of keeping the U.S. private sector out of 
Cuba has not been disadvantageous to the Europeans. They felt 
that they were able to trade with Cuba without U.S. 
competition. The real dispute is therefore jurisprudential. 
It's a rule of law dispute. What are the limits on 
extraterritorial legislation? The problem is not going to go 
away easily because it is a dispute rooted in principles.
    The second part of my remarks concerns U.S.-certified 
corporate claimants against Cuba. The first thing to say about 
those claimants is that there are several hundred of them, with 
a total of $1.6 billion in certified claims. But the claims 
themselves are clustered among the largest 10 claimants. The 
value of their losses in Cuba was approximately $1 billion of 
the $1.6 billion in certified corporate claims.
    I make that point in order to say if a resolution could be 
found with the largest corporate claims, the problem of the 
remaining claims against Cuba becomes manageable. The issue of 
these claims is going to matter a great deal as we proceed 
toward eventual normalization of trade relations with Cuba. The 
courts have been clear we must resolve the outstanding 
expropriation claims of U.S. nationals before relations with 
the expropriating nation may be normalized.
    I would propose, given the current state of Cuba's economy, 
that all parties to such a resolution are going to have to be 
innovative and creative in the approach they take to the 
resolution of those claims.
    There are two final points I want to make about the 
certified claims registered against Cuba. Those claims have 
legal standing in the international law rules that protect 
foreign investment. It's not a trivial matter--there are 
increasing U.S. investments abroad every year that find 
protection in international law.
    The Helms-Burton Act, by impermissibly extending the 
protection of the United States to non-U.S. nationals at time 
of injury, has undermined that rule of law that protects U.S. 
investments. We can't effectively claim that other countries 
adhere to that law when we're in violation of it.
    My second point is how cavalierly the certified claimants 
were treated when Helms-Burton was passed. They were vocal and 
specific in their objections to that statute. Their objections 
were ignored. The statute was passed. The question is where do 
we go from here.
    As a first step, the United States should alter Helms-
Burton to bring this country back into conformity with 
international law.
    Second, the U.S. Government should promote a resolution of 
the claims of U.S. citizens against Cuba. Considering the 
circumstances and consequences of the enactment of Helms-
Burton, it's the least that the government can do at this time.
    Thank you.
    [The prepared statement follows:]

Statement of Robert L. Muse, Muse & Associates

    Mr. Chairman, Congressman Rangel, thank you for inviting me 
to today's hearing on the subject of U.S. economic and trade 
policy toward Cuba. There are two facets to my remarks. First, 
I will comment briefly on the increasingly adverse effect on 
U.S. trade of this country's policy toward Cuba, as that policy 
is set out and, indeed, at present is controlled by the Helms-
Burton Act. The second part of my remarks will address the 
issue of the claims certified against Cuba, by the Foreign 
Claims Settlement Commission, on behalf of U.S. companies. I 
will attempt to place the issue of resolution of those claims 
within a context of future U.S./Cuba relations.

            The Effect on U.S. Trade of the Helms-Burton Act

    The subject of this hearing could hardly be more timely. 
The cost to the United States in terms of global trade and 
investment, of our foreign policy toward Cuba is becoming ever 
greater. That policy is at present embedded in the Helms-Burton 
Act, and it is in fundamental conflict with the interests of 
the United States and its citizens in a stable world trade and 
investment order.
    In considering one point of focus of today's hearing, that 
is, the effects of U.S. Cuba policy on relations with U.S. 
trading partners, we might begin with the recent date of April 
27, where, at a meeting in Luxembourg, the European Union's 
foreign ministers rejected the request of the European 
Commission to place an ambitious set of proposals for 
transatlantic trade liberalization on the agenda of the EU's 
May 18 summit with President Clinton. (Among the proposals for 
negotiation between the U.S. and the EU were the not 
insignificant matters of; (i) elimination of tariffs on 
industrial goods; (ii) the opening up of trade in services; 
(iii) the removal of technical barriers to trade and (iv) the 
liberalization of investment and government tendering rules).
    Why, it ought to be asked with some urgency, did the ``New 
Transatlantic Marketplace'' (``NTM'') proposed by the European 
Commission encounter resistance from European Union member 
states? After all, the EU and the U.S. are each other's single 
largest trading partner (taking goods and services together) 
and they are each other's most important source of foreign 
direct investment.\1\ Therefore the elimination of impediments 
to free trade and investment between the EU and the U.S. is 
something of incontestable value on both sides of the Atlantic. 
Why, then, was such an important project derailed? The answer 
lies in significant part in U.S. foreign policy toward Cuba. On 
April 27, the EU foreign ministers made it clear that a 
resolution of the dispute with the U.S. over the 
extraterritorial provisions of the Helms-Burton Act was a 
``condition'' to the further ``development of transatlantic 
trade.'' \2\
---------------------------------------------------------------------------
    \1\ See the European Commission's paper The New Transatlantic 
Marketplace, March 11, 1998.
    \2\ See communique of European Council, April 27, 1998. In addition 
to Helms-Burton, the EU foreign ministers also included resolution of 
the dispute with the U.S. over the Iran-Libya Sanctions Act (``ILSA'') 
as a condition ``for developing transatlantic trade.''
---------------------------------------------------------------------------
    The strength and duration of foreign anger over the Helms-
Burton Act--of which the action of the European Council of 
Ministers is merely the latest example--has surprised many U.S. 
policymakers. Why, exactly, is the world so obstinately 
indignant about Helms-Burton? Other countries' anger arises 
from the fact that the statute seeks a foreign policy objective 
in Cuba through means that violate international law. At its 
heart, foreign opposition to the Helms-Burton Act rests far 
more upon jurisprudential principles than differences over 
policy.\3\
---------------------------------------------------------------------------
    \3\ Europe has long viewed U.S. policy toward Cuba as ineffectual 
and perhaps even counterproductive. However, as long as U.S.-Cuba 
policy was not applied coercively to our European trading partners they 
had little reason to be indignant about that policy. Indeed, the 
central tenet of U.S. policy (i.e. the prohibition on American 
corporations trading or investing in Cuba) was advantageous to European 
enterprises with commercial interests in Cuba insofar as that policy 
served to preclude competition from the United States' private sector.
---------------------------------------------------------------------------

        How Does the Helms-Burton Act Violate International Law

    The end sought in Cuba by the Helms-Burton Act is the 
transformation of Cuba along the economic, political and even 
social lines set out in Title II of the Act. The means to this 
intended end are Titles III and IV of the statute. Those 
provisions of the Act are meant to foreclose investment in Cuba 
by placing off-limits to foreign enterprises virtually every 
property on the island.\4\ The way the Act achieves this 
coerced moratorium on foreign investment in Cuba is through 
extending U.S. support--in the form of lawsuit rights and 
denial of entry into the U.S. of certain foreign executives--to 
the claims of non-U.S. nationals at the time of their property 
losses in Cuba. By doing this the U.S. violated the nationality 
of claims principle of public international law, a principle 
which holds that a nation may not support, vis-a-vis another 
nation, the claims for redress of injury of anyone but those 
holding its citizenship at the time of injury.
---------------------------------------------------------------------------
    \4\ Approximately 600,000 Cubans emigrated to the U.S. in the years 
1960-1964. This represented 10% of Cuba's total population. However, it 
was the 10% of the population that owned just about everything of value 
on the island. The descendants of those emigrants--most of whom live in 
South Florida--are capable of asserting Helms-Burton Act claims against 
virtually every foreign investor in Cuba.
---------------------------------------------------------------------------

           The Position of the Certified Corporate Claimants

    The certified corporate claimants are U.S. companies that 
hold claims certified against Cuba by the Foreign Claims 
Settlement Act of 1964.\5\ Of the $1.8 billion in principal 
property losses certified against Cuba, $1.6 billion were U.S. 
corporate property losses.\6\
---------------------------------------------------------------------------
    \5\ Non-U.S. nationals' claims (i.e. the claims of Cuban citizens) 
were not certified because U.S. nationality at the time of property 
loss was a requirement for filing a claim with the Foreign Claims 
Settlement Commission. This requirement has been consistently applied 
by the Commission, for example in claims against the People's Republic 
of China, Vietnam, Eastern European countries, etc. In point of fact, 
the U.S. had never given retroactive rights of U.S. citizenship to 
anyone, until it enacted the Helms-Burton Act.
    \6\ It is worth remark that few of these certified claims are, 
standing alone, of significant value. For example, the properties of 
only ten corporate claimants including electric and phone companies, 
two oil refineries, one nickel mine and five sugar producers--were 
ultimately certified to be worth a little over $1 billion out of the 
$1.6 billion in total corporate claims. My point is this, a resolution 
of the largest corporate claims against Cuba would effectively 
eliminate the claims issue as a potentially impeding factor in any 
future normalization of relations between Cuba and the U.S.
---------------------------------------------------------------------------
    Certified corporate claimants opposed Helms-Burton because; 
(i) it violated and therefore undermined international law; 
(ii) it was injurious to the interests of U.S. nationals 
holding claims against Cuba that are actually recognized by 
international law (i.e., the claims of U.S. nationals at the 
time of their property losses); (iii) it would produce serious 
conflicts with U.S. trading partners and impede progress on 
bilateral and multilateral agreements the U.S. seeks in 
international trade; (iv) it could create a major future 
impediment to normalized commercial relations between Cuba and 
the U.S. in the course of any rapprochement between the two 
countries; and, (v) it would have the distinct potential of 
rendering the U.S. government liable for the claims of Cuban 
Americans against Cuba, at a cost to the American taxpayer of 
tens of billions of dollars.
    Restrictions of time prevent the development of any of 
these points in great detail.\7\ I will therefore conclude by 
offering a few general thoughts about U.S. corporate claims 
against Cuba. First, those claims possess legal standing under 
the international law rules that protect foreign investment. 
The protection of this investment can only grow in importance 
as U.S. companies invest ever greater sums abroad. Yet the 
Helms-Burton Act erodes the international rule of law that 
serves to protect those investments. It is an obvious point--
but one that bears emphasis--the United States will not be able 
to long successfully invoke international law on behalf of its 
citizens if it is itself in violation of an established tenet 
of that system of law, in this case the nationality of claims 
principle.
---------------------------------------------------------------------------
    \7\ For those who are interested, a detailed examination of the 
manyimplications for the U.S. of the Helms-Burton Act may be found in a 
recent article I have written, A Public International Law Critique of 
the Extraterritorial Jurisdiction of the Helms-Burton Act, (Cuban 
Liberty and Democratic Solidarity (Libertad) Act of 1996). 30 THE 
GEORGE WASHINGTON JOURNAL OF INTERNATIONAL LAW AND ECONOMICS, at pgs. 
207-270.
---------------------------------------------------------------------------
    My second point concerning U.S. corporate claims against 
Cuba is how cavalierly those claimants were treated when Helms-
Burton was enacted. The certified claimants were vocal and 
exact in their reasons for opposition to that legislation. It 
made no difference--it was enacted over their protests and 
warnings. It must be said that, regrettably, certain proponents 
of Helms-Burton used, with no legal foundation, the issue of 
property claims as a pretext for the advancement of a set of 
foreign policy objectives involving Cuba.\8\
---------------------------------------------------------------------------
    \8\ In other words, the argument that the legislation protected 
Cuban American ``claims'' to properties in Cuba served as a pretext for 
the creation of an effective blockade of foreign investment in Cuba, in 
order to collapse that country's economy and refashion its society. The 
real reason for extending, via Helms-Burton, U.S. protection to the 
claims of non-U.S. nationals at the time of property losses in Cuba was 
given by a Senate witness in 1995. According to that witness certified 
claimants ``represent at most 5 percent of the productive properties in 
Cuba.'' He went on to say; ``Including the Cuban Americans provides a 
much greater coverage of property and therefore creates a more limited 
pool of potential investments in Cuba. By limiting the scope of the 
properties available for investment, this bill would discourage foreign 
investment in Cuba. By limiting foreign investment in Cuba, the bill 
detrimentally impacts upon the regime's chances to prolong its stay in 
power and therefore the foreign policy objective is accomplished'' 
Cuban Liberty and Democratic Solidarity Act: Hearings Before the 
Subcomm. On Western Hemisphere and Peace Corps Affairs of the Senate 
Comm. On Foreign Relations, 104th Cong. 128 (1995) (statement of 
Ignacio Sanchez). (Emphasis added).
---------------------------------------------------------------------------
    Two years after enactment it is clear that Helms-Burton has 
not achieved its foreign policy objectives in Cuba. It is 
equally clear that the Act's cost to the United States, in 
terms of its relations with other countries, will prove 
considerable and have only begun to be realized. The question 
is, where do we go from here? As a first step the U.S. should 
alter the Helms-Burton Act to bring this country back into 
conformity with international law. Nothing less than the 
national interest requires that this be done.
    I will conclude by saying that it is time that the U.S. 
government begin to promote a resolution with Cuba of the 
claims of U.S. citizens that are recognized in international 
law. Considering the circumstances and consequences of the 
enactment of Helms-Burton, it may be the least it should do 
with respect to the certified claimants.
      

                                


    Chairman Crane. Thank you.
    And our next witness is, and correct me if I'm 
mispronouncing, ``Kavoolech?''

 STATEMENT OF JOHN S. KAVULICH II, PRESIDENT, U.S.-CUBA TRADE 
                   AND ECONOMIC COUNCIL, INC.

    Mr. Kavulich. Kavulich.
    Chairman Crane. Kavulich.
    Mr. Kavulich. In October, you were correct.
    Chairman Crane. All right just checking because that's 
Serbian, right?
    Mr. Kavulich. Czechoslovakian.
    Chairman Crane. Oh. I was told that pronouncing that ``ch'' 
was Croatian.
    Mr. Kavulich [continuing]. It depends on where you are. But 
thank you, sir----
    Chairman Crane. In the case of the Serbian. Please go 
forward.
    Mr. Kavulich. Thank you, Mr. Chairman, Mr. Rangel, Members 
of the Subcommittee.
    In 1994, an estimated 500 U.S. business executives visited 
Cuba. This year, an estimated 2,500 will visit, many from 
Illinois, California, New York, and Massachusetts. Expected to 
visit Cuba this year, are 100,000 individuals subject to U.S. 
law, 20,000 of which are expected to visit without 
reauthorization from the Treasury Department, an increase of 18 
percent from 1997.
    Within weeks of Helms-Burton becoming law, small- and 
medium-sized companies changed from seeking to conduct 
commercial activities to gathering information. Large companies 
changed from gathering information to seeking to conduct 
commercial activities. Since the visit of the Pope, there has 
been an exponential increase in the number of U.S. companies 
requesting information about Cuba.
    The United States and Cuba are triangulating with the 
business community, taking unilateral actions, then creating 
value from the resultant bilateral effects of those unilateral 
actions. During the visit of the Pope, members of the U.S.-Cuba 
Trade and Economic Council provided approximately $100,000 in 
products and services--from aircraft to communications 
equipment, to carpeting. The Treasury Department issued 
licenses quickly, and the Ministry of Foreign Affairs of Cuba 
was efficient with their logistical support. The result was 
reported as positive in Washington, DC, and in Havana.
    During the last 2 years, the Clinton administration has 
taken initiatives and responded to external pressures, 
resulting in expanded opportunities for U.S. companies, 
including the authorization of representatives of health care 
product companies to visit and to transport samples of their 
products; and the authorization for a company to organize a 
trade exhibition in Havana to promote the sale of medical 
equipment, medical instruments, medical supplies, medicated 
products, pharmaceuticals, and health care informational 
materials. The Cuban Government has agreed to hold this 
exhibition in January 1999.
    Reportedly, there is an unannounced agreement with respect 
to overflights of the U.S. territory by Cuban air carriers. 
Cuba already permits overflights of its territory by U.S. air 
carriers. The Clinton administration has considered 
reactivation of direct mail service. Direct mail service, 
including package delivery services such as those provided by 
United Parcel Service and other companies, would reduce costs 
associated with transactions, sales, and donations currently 
authorized.
    The Clinton administration has considered the authorization 
of regularly scheduled direct charter flights beginning next 
month in Newark, New Jersey, as well as from Miami, Florida, 
and perhaps other cities.
    Last week, the Prensa Latina News Agency published a story 
that began with the words ``Thanks to the Interests section in 
Havana.'' Unfiltered commercial information from Cuba is being 
provided on a more timely basis by an ever-increasing variety 
of sources. No longer is a company surprised to receive a 
facsimile or e-mail directly from Cuba. A member of the U.S.-
Cuban Trade and Economic Council recently received an order, 
via facsimile, worth more than $100,000 for medical devices.
    During the biannual meetings to discuss immigration issues, 
the Cuban delegation includes an immigration attorney who is 
also the negotiator for the asset claim settlements between 
Cuba and Canada, France, Spain, and other countries. Why, I 
asked an official of the Ministry of Foreign Affairs, and I was 
told just in case the United States wishes to discuss the issue 
of decertified claimants, we are ready.
    There remain, however, divisions amongst those who 
determine policy and those who implement policy, both in 
Washington, DC, and in Havana. Only during the last 8 months 
has there been a visible effort by the Departments of State, 
Treasury, and Commerce, which has made considerable progress, 
to make more accessible, more accurate, and more timely 
information and guidance regarding authorized commercial 
transactions.
    The policy of the Clinton administration continues to shift 
from seeking a reason to say no to seeking a reason to say yes.
    Some Cuban Communist Party officials, military officers, 
government officials, and company managers seem to prefer an 
incremental change in the commercial and economic relationship 
with the United States. These individuals would view 
substantial and immediate change in the overall commercial and 
economic relationship to be an effort by the United States to 
undermine the commercial and economic structures that currently 
exist within Cuba. One result could be Cuba erecting immediate 
barriers.
    Cubans have one of the highest levels of awareness and 
preferences of U.S. product and service brand names, making 
Cuba an attractive export market of 11 million consumers, 
almost the same as the State of Illinois. The value of 
unrestricted United States-Cuba trade has been estimated to 
range from $3 to $7 billion. U.S. companies in the bulk food 
commodity sectors would find substantial opportunities in the 
short term, medium term, and long term. Cuba currently imports 
powdered milk, soy, corn, rice, wheat, cooking oil, and 
poultry, among other products. In 1997, Cuba's bulk food 
commodity imports totaled approximately $800 million.
    U.S. health care companies would have marginal short-term 
opportunities due to the fact that Cuba currently has limited 
resources to import products, has existing product supply 
channels, which are often less expensive than similar products 
from the United States, and considerable resources have been 
spent during the last 6 years to develop domestic production 
capabilities, especially in pharmaceutical and limited-function 
medical equipment.
    In the long term, Cuba's health care sector is a potential 
annual market of $500 million to $1 billion.
    Thank you.
    [The prepared statement follows:]

Statement of John S. Kavulich II, President, U.S.-Cuba Trade and 
Economic Council, Inc.

    Mr. Chairman, Mr. Rangel, and members of the Subcommittee, 
thank you for the opportunity to appear before this hearing on 
``U.S. Economic and Trade Policy Toward Cuba.''
    In 1994, an estimated 500 United States business executives 
and representatives visited the Republic of Cuba. In 1995, an 
estimated 1,300 United States business executives and 
representatives visited the Republic of Cuba. In 1996, an 
estimated 1,500 United States business executives and 
representatives visited the Republic of Cuba. In 1997, an 
estimated 2,000 United States business executives and 
representatives visited the Republic of Cuba. In 1998, an 
estimated 2,500 United States business executives and 
representatives will visit the Republic of Cuba.
    In total, perhaps 100,000 individuals subject to United 
States law will visit the Republic of Cuba in 1998--both with 
authorization and without authorization from the Office of 
Foreign Assets Control (OFAC) of the United States Department 
of the Treasury. Most of these individuals will be of Cuban 
descent who reside within the United States and who are 
visiting relatives within the Republic of Cuba. An estimated 
20,000 individuals subject to United States law are expected to 
visit the Republic of Cuba in 1998 without authorization.
    Prior to ``Helms-Burton'' becoming law, interest toward the 
Republic of Cuba was primarily the domain of small and medium-
sized United States companies who sent executives and 
representatives to the Republic of Cuba to obtain information 
and to learn what authorized commercial activities could be 
conducted immediately. Large United States companies gathered 
information about the Republic of Cuba, but generally did not 
seek to conduct commercial activities--even those authorized by 
the Office of Foreign Assets Control (OFAC) of the United 
States Department of the Treasury and by the Bureau of Export 
Administration (BXA) of the United States Department of 
Commerce.
    Since March 1996, when President Clinton signed the 
``Helms-Burton'' legislation into law, there have been two 
substantive changes with respect to the manner by which the 
interest of the United States business community toward the 
Republic of Cuba has been manifested.
    Within weeks of ``Helms-Burton'' becoming law, small and 
medium-sized United States companies changed from seeking to 
conduct commercial activities to gathering information and 
large United States companies changed from gathering 
information to seeking to conduct commercial activities. Small 
and medium-sized companies believed that they would not be able 
to access the Republic of Cuba marketplace, without 
restriction, in the immediate future, so they refocused their 
limited resources. ``Helms-Burton'' caused large companies to 
believe that they would be able to access the Republic of Cuba 
marketplace, without restriction, in the immediate future. 
``Helms-Burton'' created for large companies a justification to 
discuss publicly their interest toward the Republic of Cuba 
while simultaneously discussing their concerns about the use 
and effect of unilateral trade sanctions.
    The basis of the justification was primarily due to 
provisions within the ``Helms-Burton'' law that were perceived 
by United States companies to be potentially harmful to their 
ability to operate in other countries and 1) no United States 
company with a claim certified by the Foreign Claims Settlement 
Commission in Washington, D.C., publicly lobbied on behalf of 
the ``Helms-Burton'' legislation 2) no United States company 
with a certified claim announced that it would seek to use 
remedies provided by the ``Helms-Burton'' law 3) United States 
company executives, including Mr. Dwayne Andreas of Archer 
Daniels Midland Company, Mr. Oscar Wyatt of The Coastal 
Corporation, Mr. Curtis Carlson of Carlson Companies, Mr. Ted 
Turner of Time Warmer, Mr. Donald Fites of Caterpillar, and Mr. 
James Perrella of Ingersoll-Rand among many others, permitted 
themselves to be quoted about their interest toward the 
Republic of Cuba; visited or had executives of their companies 
visit the Republic of Cuba; met with H.E. Dr. Fidel Castro Ruz, 
President of the Republic of Cuba; and provided funds to 
partisan and nonpartisan organizations focusing upon the 
Republic of Cuba 4) national business organizations opposed to 
the ``Helms-Burton'' law 5) the media opposed the ``Helms-
Burton'' law and 6) President Clinton, although he signed the 
``Helms-Burton'' legislation into law, was widely viewed, 
correctly as time would confirm, that he would implement 
provisions of the law with constraint instead of expansively.
    Since the visit of the Pope to the Republic of Cuba in 
January 1998, there has been an exponential increase in the 
number of United States companies requesting information about 
the Republic of Cuba. The U.S.-Cuba Trade and Economic Council 
has not witnessed such a sustained increase in interest since 
the period June 1995 to February 1996. The U.S.-Cuba Trade and 
Economic Council has sustained a higher percentage increase in 
annual membership since ``Helms-Burton'' became law than during 
each of the previous two years.
    The government of the United States and the government of 
the Republic of Cuba continue to triangulate with the United 
States business community. Each government is taking unilateral 
actions toward the United States business community, then 
creating value from the resultant bilateral effects of their 
unilateral actions. A recent example was the participation of 
the United States business community with the visit of the Pope 
to the Republic of Cuba in January 1998. Members of the U.S.-
Cuba Trade and Economic Council provided approximately 
US$100,000.00 in products and services--from aircraft to 
communications equipment to carpeting. The Office of Foreign 
Assets Control (OFAC) of the United States Department of the 
Treasury issued licences quickly and the Ministry of Foreign 
Affairs of the Republic of Cuba was efficient with their 
logistical support. The result was reported as positive in 
Washington, D.C., and in Havana.
    During the last two years, the Clinton Administration has 
both taken initiatives and responded to external pressures, 
resulting in expanded opportunities for United States 
companies--in terms of what can be done within the Republic of 
Cuba and the means by which to conduct transactions within the 
Republic of Cuba. The two most substantive changes have been 1) 
to authorize representatives of United States health care 
product companies to visit the Republic of Cuba and to 
transport, if desired, samples of their products. Members of 
the U.S.-Cuba Trade and Economic Council received the first of 
these licenses. 2) The authorization for a Connecticut-based 
company, which is a member of the U.S.-Cuba Trade and Economic 
Council, to organize a trade exhibition to be held in the 
Republic of Cuba, the purpose of which is to promote the sale 
of medical equipment, medical instruments, medical supplies, 
medicated products, pharmaceuticals, and healthcare 
informational materials. The government of the Republic of Cuba 
has agreed to hold this exhibition from 26 January 1999 to 30 
January 1999. No earlier dates were available at locations 
within the city of Havana with the required quantity of space.
    Reportedly, an agreement between the government of the 
Republic of Cuba and the government of the United States is 
expected to be announced soon with respect to overflights of 
United States territory by Republic of Cuba air carriers. The 
Republic of Cuba permits overflights of its territory by United 
States air carriers.
    Reportedly, the Clinton Administration is considering the 
reactivation of direct mail service between the United States 
and the Republic of Cuba. Direct mail service, including 
package delivery services such as those provided by United 
Parcel Service and Federal Express, could reduce costs 
associated with commercial transactions (export sales and 
import sales of products and donations of products) currently 
authorized by the Office of Foreign Assets Control (OFAC) of 
the United States Department of the Treasury and the Bureau of 
Export Administration (BXA) of the United States Department of 
Commerce between United States companies and Republic of Cuba 
entities.
    On 29 April 1998, the Republic of Cuba government-operated 
Prensa Latina News Agency, published a story that began with 
the words ``Thanks to the United States Interests Section in 
Havana . . .'' The occasion was the screening of the motion 
picture Amistad. California-based DreamWorks SKG had provided 
the motion picture to United States diplomatic missions in many 
countries. This was the first time in more than thirty-five 
years that the Republic of Cuba government-operated Cuban 
Institute of Art and Cinematography (ICAIC) and the United 
States Interests Section held a jointly-sponsored cultural 
event. The screening for Republic of Cuba nationals was at the 
Charlie Chaplin Theater in the city of Havana.
    Commercial information from the Republic of Cuba requested 
by United States companies is being provided on a more timely 
basis by an ever-increasing variety of sources. No longer is a 
United States company surprised to receive a facsimile or E-
mail directly from a Republic of Cuba government-operated 
company, joint venture, economic association, or non-Republic 
of Cuba-headquarterd company with an office within the Republic 
of Cuba.
    A member of the U.S.-Cuba Trade and Economic Council 
recently received an order worth more than US$100,000.00 for 
medical devices. In November 1997, the company delivered 
product brochures. Executives of the company have received a 
license from the Office of Foreign Assets Control (OFAC) of the 
United States Department of the Treasury to visit the Republic 
of Cuba.
    Washington, D.C.-based diplomats from the Cuban Interests 
Section are now traveling throughout the United States to meet 
with United States business executives with such frequency that 
they can benefit from membership in various United States 
airline frequent flyer programs.
    The government of the Republic of Cuba's increased focus on 
commerce with English-speaking countries such as Canada and the 
United Kingdom, benefits United States companies. English-
language publications include the ETECSA Telephone Directory, 
newspapers such as Negocios en Cuba and Opciones, magazines 
such as Business TIPS on Cuba and Acuarela de los Habanos, and 
the 302-page Directorio Turistico de Cuba.
    When the government of the Republic of Cuba and the 
government of the United States have bi-annual meetings to 
discuss immigration issues, the Cuban delegation includes an 
attorney who, besides handling immigration, was the negotiator 
of the asset claim settlements between the Republic of Cuba and 
Canada, Spain, France, and other countries. Why does a dual-use 
attorney attend these meetings I asked an official of the 
Ministry of Foreign Affairs of the Republic of Cuba, ``Just in 
case,'' I was told, ``the United States wishes to discuss the 
issue of the certified claimants. We are ready.'' In a 
subsequent letter to me, the United States Department of State 
wrote that the United States government will negotiate the 
issue of the certified claims when the Cuban government makes a 
``serious'' proposal. When asked to define ``serious,'' the 
United States Department of State declined to provide such a 
definition because, I was informed, it might provide value to 
the Cuban government.
    There remain, however, divisions amongst those who 
determine policy and those who implement policy--both in 
Washington, D.C., and in Havana.
    Only during the last eight months has there been a visible 
effort by the United States Department of State, United States 
Department of the Treasury, and the United States Department of 
Commerce (which has made considerable progress) to make more 
accessible, more accurate, and more timely, the information and 
guidance provided to United States companies regarding 
authorized commercial transactions relating to the Republic of 
Cuba. The policy of the Clinton Administration continues to 
shift from seeking a reason to say ``no'' to seeking a reason 
to say ``yes.''
    Discussions with Republic of Cuba Communist Party 
officials, officers in the military, government officials, and 
with government-operated company managers present a preference 
for an incremental change in the commercial and economic 
relationship with the United States. Some of these individuals 
would view substantial and immediate change in the overall 
commercial and economic relationship between the United States 
and the Republic of Cuba to be an effort by the United States 
to undermine the commercial and economic structures that 
currently exist within the Republic of Cuba. Any sudden and 
substantial change in the commercial and economic policies of 
the United States toward the Republic of Cuba could result in 
the Republic of Cuba erecting immediate barriers.
    If the United States could not defeat the revolution in the 
1960's with military action, if the United States could not 
defeat the revolution in the 1970's and 1980's with 
international pressure, if the United States could not defeat 
the revolution in the 1990's with laws, now the United States 
would be using business and tourism as weapons.
    Why are small, medium, and large United States companies 
interested in the Republic of Cuba market? Because the Republic 
of Cuba has 11 million citizens. If the Republic of Cuba were a 
state within the United States, it would rank 7th in 
population--after the State of Illinois.
    The Republic of Cuba is the largest Caribbean Sea-area 
country, larger than nearly all of the islands within the 
Caribbean Sea-area combined, and with nearly one-third of the 
combined populations. Nearly as large as the State of 
Pennsylvania and approximately as long as the State of Florida.
    As of May 1998, the estimated value of announced 
investments within the Republic of Cuba by private sector 
companies and government-controlled companies from twenty-five 
countries is US$5.636 billion, of which US$1.756 billion is 
estimated to have been committed and/or delivered.
    The citizens of the Republic of Cuba have one of the 
highest levels of awareness of United States product and 
service brand names of any non-English speaking country. The 
citizens of the Republic of Cuba have one of the highest levels 
of preferences for United States product and service brand 
names of any non-English speaking country. For a company to 
develop a new market, or redevelop a previous market, the two 
greatest cost components are a) the creation of brand awareness 
and b) the creation of brand preference. In the Republic of 
Cuba, these two significant cost components are reduced, thus 
making the Republic of Cuba an immensely attractive export 
market.
    The value of unrestricted annual United States-Republic of 
Cuba trade has been estimated to range from US$3 billion to 
US$7 billion--with, perhaps, 70%, or US$2.1 billion to US$4.9 
billion being exports from the United States to the Republic of 
Cuba.
    According to the United States Department of Commerce, for 
each US$1 billion in United States exports, 20,000 new 
employment opportunities can be created. United States-Republic 
of Cuba trade could be responsible for creating perhaps 100,000 
or more new jobs for United States citizens.
    Unrestricted access of United States companies to the 
Republic of Cuba market would result, in less than four years 
time, of, perhaps, 80% or more of the Republic of Cuba's Gross 
Domestic Product resulting from its bilateral trade, financial 
services flow, and tourism with the United States. The Republic 
of Cuba will most certainly be the recipient of a Puerto Rico-
type of favorable production and tax/tariff relationship with 
the United States. The Republic of Cuba's already established 
Free Trade Zones will become more attractive as their 
infrastructure develops and operational restrictions lessen. 
United States companies, especially those who seek relatively 
skilled labor for assembly operations, may find the Republic of 
Cuba to be a cost-effective production base. United States 
companies will not, however, find that the Republic of Cuba 
will have a low-cost labor force in the future. Today, The 
Republic of Cuba has an under-employment problem and as this 
situation is resolved, Republic of Cuba nationals will demand 
to be paid at a rate in comparison with the value of the 
product or service that they are employed to produce or 
provide. Republic of Cuba nationals are seeking and receiving 
U.S. Dollar bonuses from Republic of Cuba government-operated 
companies as inducements to increase production.
    United States companies in the bulk food commodity sectors 
would find substantive opportunities in the short term, medium 
term, and long term. The Republic of Cuba currently imports 
powered milk, soy, rice, wheat, cooking oil, and poultry among 
other products. In 1997, Republic of Cuba bulk food commodity 
imports totaled approximately US$800 million.
    United States health care companies (medical equipment, 
medical instruments, medical supplies, medicated products, 
pharmaceuticals, and informational materials) would have 
marginal short term opportunities. This is due to 1) the 
Republic of Cuba's health care system has limited resources to 
import products on a cash-and-carry basis, if United States-
based financing were available for such imported products, 
sales opportunities could be increased 2) the Republic of 
Cuba's health care system has current other country supply 
channels for products which, in a large number of instances, 
are less expensive than similar products from the United States 
3) the Republic of Cuba's health care system has spent 
considerable resources during the last six years developing 
production capabilities, especially in pharmaceuticals and 
limited function medical equipment. In the long term, the 
Republic of Cuba's health care sector is a potential annual 
market of US$500 million to US$1 billion.
    Thank you for this opportunity to appear before the 
Subcommittee on Trade of the Committee on Ways and Means of the 
United States House of Representatives.
      

                                


    Chairman Crane. Thank you.
    And our last distinguished witness is our former colleague, 
Michael Barnes.

  STATEMENT OF HON. MICHAEL BARNES, PARTNER, HOGAN & HARTSON, 
 L.L.P., AND FORMER MEMBER OF CONGRESS, ON BEHALF OF USA ENGAGE

    Mr. Barnes. Thank you very much, Mr. Chairman.
    I'm a partner in the law firm of Hogan and Hartson, and our 
firm has the privilege of serving as counsel to an organization 
called USA Engage. USA Engage is a group of business 
organizations and companies, now about 670 members, including 
the National Foreign Trade Council, the U.S. Chamber of 
Commerce, Grocery Manufacturers of America, the American Farm 
Bureau Federation, the National Association of Manufacturers, 
the National Grange, and, as I say, approximately 670 others 
that are involved in this organization.
    Last year, Mr. Chairman, I had the privilege of 
participating in a delegation to Cuba organized by the U.S. 
Association of Former Members of Congress. Six of us went, 
three Republicans, three Democrats--a very wide spectrum of 
ideology. And I think we came back with a total consensus, a 
view, that U.S. policy with respect to Cuba needs to be 
reassessed and that we are likely--more likely to achieve the 
objectives of American policy, which is the democratization of 
Cuba, through engagement rather than continuing the 39-year 
effort to isolate Cuba.
    We were struck by the tragic situation of the people of 
Cuba--their political persecution, the economic deprivation, 
the terrible social situation in that country. We were also 
quite surprised when we met with Cuban dissidents, the 
opposition to Castro, many of whom had spent many, many years 
in prison to learn from them that they felt that U.S. policy 
was counterproductive. A number of them referred to the Helms-
Burton law as Helms-Burton-Castro because they argue that it 
facilitates Castro's objective to remain in power and to 
continue the repression of the people of that country. And they 
urged us, as former, and at that time two current sitting 
Members of the House and one former Senator, to come back to 
Washington and urge a reassessment of American policy in order 
to promote more contact with the Cuban people and more 
engagement between the United States and Cuba.
    Last week, I participated in a conference of the Inter-
American Dialogue, and we heard a speech by Cardinal Bernard 
Law, from Boston, who accompanied the Pope on his historic 
visit to Cuba. Cardinal Law said in his remarks last weekend: 
``If there is going to be a significant change in Cuba, there 
must be a significant change in U.S. policy.'' And he went on 
to say that we should lift the ban on the export of food and 
medicine from the United States to Cuba and also that we 
should--and I quote him--``encourage travel to Cuba.''
    USA Engage believes that we are more likely as a nation to 
achieve our foreign policy objectives in Cuba by following the 
advice of the Pope, the advice of Cardinal Law, and the advice 
that I, as a former Member with five of our colleagues heard 
from the Cuban opposition when I was there last year, and that 
is to change our policy to promote interchange between the 
United States and Cuba, both on the commercial level and 
generally through the visits of American citizens. So I'm here 
today to encourage lifting the ban on the export of food and 
medicine to Cuba and also lifting the ban on travel by American 
citizens to Cuba.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Hon. Michael Barnes, Partner, Hogan & Hartson, L.L.P., and 
Former Member of Congress, on Behalf of USA Engage

    Mr. Chairman, thank you for the opportunity to appear 
before this Subcommittee to discuss U.S. economic and trade 
policy toward Cuba. I am here today on behalf of USA Engage, a 
coalition of 670 small and large businesses, agriculture 
groups, and trade associations working to seek alternatives to 
the proliferation of unilateral U.S. foreign policy sanctions 
and to promote the benefits of U.S. engagement abroad.
    The time has come for serious reconsideration of U.S. 
policy toward Cuba. Our unilateral trade embargo is an outdated 
relic of the Cold War. In almost 40 years, the embargo has 
failed to bring about positive change in Cuba: the Castro 
regime remains brutally repressive and solidly in control. Our 
policies--particularly the Helms-Burton law--have given Castro 
a convenient excuse for the effects of his own failed economic 
policies. They have put America at odds with our closest 
allies. And in recent months, the U.S has been criticized by 
some of the leading international voices for human rights. That 
includes Pope John Paul II, who condemned the embargo as 
``unjust and ethically unjustifiable'' during his recent visit 
to Cuba.
    Cuba is rapidly approaching a crossroads. Castro cannot 
live forever, and a new government will take the reins in the 
near future. America has a vital interest in promoting a 
peaceful transition to freedom, democracy, and the rule of law. 
The problem is that the current embargo blocks off all avenues 
of American influence. To be ready when the inevitable change 
in government comes, we must now reopen the flow of American 
ideals and values into Cuba. We should start by reaching out 
directly to the Cuban people. The pending legislation to allow 
humanitarian sales of food and medicine is a good example. We 
can build on that by easing travel restrictions and allowing 
cultural, academic, and scientific exchange. Our best chance to 
help Cuba rejoin the international community is engagement at 
every level: political, diplomatic, economic, charitable, 
religious, educational, and cultural.
    I would like to spend a few moments discussing the reasons 
that the time is right to re-evaluate our policy toward Cuba 
and then turn to the steps that we should take now.
    First, the world has changed dramatically since we first 
imposed the embargo. Thirty-eight years ago, America had good 
reasons to try to isolate and contain Cuba. Soviet economic and 
military backing posed a direct threat to our national 
security. Cuba was a foothold for communism in the Western 
Hemisphere. We feared that it would succeed in exporting 
Marxist ideals throughout the region. Strategic considerations 
virtually necessitated the embargo. Today, those considerations 
no longer exist. Within the past ten years, the Berlin Wall has 
come down and the Soviet Union has crumbled. Cuba no longer 
benefits from a massive Soviet subsidy. During the last twenty 
years, democracy has taken root in Latin America and South 
America. Cuba is politically isolated and economically ruined; 
it no longer poses a threat to our security or our neighbors. 
In short, we won the Cold War, and it is time to adjust our 
policies to a new era of international relations.
    Second, Cuba itself is ripe for change. In December 1996, I 
was privileged to visit Cuba as member of a bipartisan 
delegation of current and former members of Congress. We met 
with Cuban citizens from every walk of life: ministers, 
bureaucrats, farmers, dissidents, church leaders, and rising 
young political leaders. The view from the ground lead us to 
make a unanimous recommendation that the United States should 
re-examine its Cuba policy.
    That conclusion is even stronger in the wake of Pope John 
Paul II's visit to Cuba this year. The crowds that met him at 
every stop showed that the Cuban people are open to the outside 
world. They are ready to embrace new people, ideas, and 
information. The visit also sent a signal that the Cuban 
government--Castro himself--may be looking for a way to bring 
Cuba back within the community of nations. It remains to be 
seen whether Castro bends to Pope John Paul's call for an end 
to his repressive practices. Either way, the Pope's visit 
touched the Cuban people and may be a catalyst for change at 
the grass roots.
    Third, the embargo simply has not worked. Cuba would appear 
to be an ideal case for unilateral sanctions. It is a 
vulnerable target: a small island country just 90 miles from 
our shores Yet after 38 years, it still appears that Castro 
will remain in power until death or infirmity removes him.
    Ironically, far from removing or reforming the Castro 
government, the embargo has served as a convenient scapegoat. 
Year after year, the Cuban government has blamed the U.S. 
embargo for the poverty and depravation caused by its own 
failed policies. During the 1996 visit of former and current 
members of Congress, we were struck by the success of this 
ploy. It has instilled a defiant nationalism in the Cuban 
people. There is unmistakable pride among the ruling class in 
the country's ability to withstand the U.S. embargo. Ordinary 
Cubans share that pride, and even the dissident community does 
not support our policies. As the delegation's report stated:

          A policy to resist U.S. domination resonates in Cuba, 
        although there is little ill will toward the United States, 
        rather a general puzzlement about current policy toward Cuba. 
        This attitude, articulated by officials, provincial workers, 
        farmers, university students and others, is shared to an extent 
        by the independent democrats and dissidents.

    Fourth, the Castro Government successfully has exploited 
Helms-Burton to rally public opinion. One of the most striking 
features of Cuba's attitude toward the United States is the 
public reaction to Helms-Burton. We were impressed that the law 
is well known among ordinary Cuban citizens; far more so than 
in the United States. The high level of public awareness comes 
from a concerted propaganda campaign. Castro orchestrated 
public demonstrations against the law and staged national 
meetings to discuss its impact on the country. Of course, 
Helms-Burton is cited as proof that the U.S. wants to destroy 
Cuba. It has become an effective rallying point for the Cuban 
government. The exploitation of Helms-Burton has been so 
successful that several political dissidents we met referred to 
it as the ``Helms-Burton-Castro Act.''
    Fifth, there are signs that international opinion is 
turning against the United States. From the beginning, the 
United States has stood alone on the embargo of Cuba. At first, 
that was necessary and appropriate. Today, we face an increased 
risk of isolating ourselves and losing our leadership role in 
the international community. Some of our closest friends and 
allies are moving toward increased engagement of Cuba. The 
Pope's visit and his direct appeal to the Cuban people is one 
example. The April visit of Canadian Prime Minister Jean 
Chretien is another. Castro effectively exploited both visits 
to show himself aligned with respected world leaders and to 
paint the United States as outside the international consensus. 
Friction with our closest allies over issues like Helms-Burton 
has been an equal boon to Castro. As you know, we narrowly 
avoided a WTO showdown with the European Union over that issue.
    There also are signs that some human rights leaders are 
beginning to take a negative view of the embargo. This year, 
for the first time since 1992, the United Nations Human Rights 
Commission failed to pass a resolution condemning Cuba's human 
rights practices. Diplomats who reported to the Commission 
acknowledged the brutality of the Cuban regime. At the same 
time, however, they criticized the U.S. embargo as contributing 
to intolerable conditions there. The Pope's criticism of the 
embargo is another example. If we are going to have any success 
in promoting democracy and freedom in Cuba, we need the support 
of our allies and the entire international community. As it 
stands, we are running the risk of losing that support and our 
leadership role.
    Even within Cuba, democratic opponents of Castro question 
U.S. policies. The delegation of former and current members of 
Congress met with a group of political dissidents in Havana. 
The majority strongly opposed Helms-Burton. Many also 
questioned the utility of the embargo today. In contrast, the 
dissidents praised the European approach of both exploring 
economic opportunities and supporting the democratic movement. 
The Cuban dissidents called for an economic opening as the best 
catalyst for political change in Cuba.
    For all of these reasons, the time has come for a more 
nuanced U.S. policy toward Cuba. To advance peace and freedom 
during the inevitable changes ahead, America must begin now to 
open channels of influence with the Cuban people. The report of 
the delegation of former members of congress put it this way:

          The time is ripe to look for opportunities to open up the 
        country to people, ideas, and information. We need to play 
        cards that will open the avenues to a peaceful transition. In 
        the likelihood of a nomeklatura takeover after Castro, lacking 
        the mystique of Castro, they will have to demonstrate their 
        success in economic terms. As soon as the economy starts to 
        move forward, the people will begin to become ``economically 
        enfranchised'' and supply and demand pulls will start to shape 
        domestic policy. The engagement by non-American Western 
        investors, tourists and students will begin a process which 
        could lead to the establishment of a civil society and a 
        peaceful transition to not only an economic but also a 
        political open society. This may take ten years, but it is an 
        option than can be achieved with limited, if any, violence.

    How do we restore the lines of communication? President 
Clinton's decision to allow increased family-to-family support 
and renewed direct charter flights to Cuba was a good first 
step. It restores an important link in the chain of physical 
and moral support between Cubans in this country and in Cuba. 
We should not underestimate the role that the Cuban-American 
community can play in helping to bring about peaceful change 
when Castro finally leaves power. Cubans in this country are 
the best messengers of American ideals to their friends and 
family members in Cuba. We should promote exchange between the 
two sides as much as possible. The President's earlier actions 
should now be followed by lifting the prohibition on travel by 
U.S. citizens to Cuba.
    Allowing sales of food and medicines is an important second 
step. Congress should move quickly to pass the legislation 
proposed last year to allow humanitarian sales into Cuba. That 
simple change would undercut Castro's efforts to paint the U.S. 
as the root cause of Cuba's economic plight and point the blame 
back toward the Cuban government. It also will go far to 
restore our leadership standing on human rights in Cuba and 
establish closer alignment with internationally respected 
proponents of engagement including Pope John Paul II.
    And we should consider future steps to facilitate a 
dialogue with the Cuban people. Encouraging academic and 
scientific exchanges would help foster direct communication. So 
would increased support for academic and scholarship programs. 
We also should begin to identify areas in which we have shared 
interests with Cuba. We then can explore the possibility of 
cooperation and collaboration. That has been the approach of 
the Inter-American Dialogue's Task Force on Cuba. Focusing on 
issues like the environment, the Task Force encourages changes 
that are necessary for Cuba to return to the inter-American 
community.
    This past weekend I had the privilege of participating in a 
meeting of the Inter-American Dialogue. At that conference we 
heard from Cardinal Bernard Law of Boston who accompanied Pope 
John Paul II on his historic visit to Cuba. Cardinal Law said 
in his remarks: ``If there is going to be a significant change 
in Cuba, there must be a significant change in U.S. policy.'' 
The Cardinal noted that the Catholic Bishops of Cuba after the 
visit of the Pope issued a formal statement that the Pope's 
visit ``must not be an isolated event.'' He went on to say ``we 
should lift the ban on food and medicine'' and ``we should 
encourage travel to Cuba.''
    Let me close by reiterating that it is in the interest of 
promoting change in Cuba that we should lift the ban on travel 
to Cuba. The American people are a powerful voice for the 
blessings of freedom and democracy. By allowing travel to Cuba, 
we would allow their message to reach the Cuban people and lay 
the foundation for future relations.
    Mr. Chairman, I will happily respond to any questions you 
may have.
      

                                


    Chairman Crane. Thank you.
    I have a couple of questions here I'd like to throw out to 
the panel, and as many of you as wish, please respond.
    First of all, what impact does Helms-Burton have on the 
willingness of foreign firms to establish U.S. subsidiaries, 
and thereby employ U.S. workers? Anybody have any thoughts?
    Mr. Berry. Could you repeat the question?
    Chairman Crane. Right. What impact does Helms-Burton have 
on the willingness of foreign firms to establish U.S. 
subsidiaries, and thereby employ U.S. workers?
    Mr. Berry. Well, Mr. Chairman, we did--in the study that we 
completed last fall. What we found in the survey of 42 
companies was that--and it looked at specific sanctions 
measures, let's say, like title IV or title III or the export 
control laws or whatever--is that sanctions--what would happen 
is that the United States became a less attractive investment 
destination. And, therefore--and also we found that some of 
them rather than establishing new investments of new operations 
in the United States might do it in one of the NAFTA partner 
states. The--and the impact of specific sanctions, the first 
thing for foreign subsidiaries was that they would cut jobs. 
The second was that they would probably close existing 
operations. And the third is that they would relocate existing 
investment.
    Chairman Crane. What's been the experience of subsidiaries 
of U.S. firms overseas who are required, under U.S. law, to 
comply with the U.S. embargo on Cuba as well as blocking 
legislation enacted by our major trading partners which 
prohibit them from doing so?
    Mr. Berry. I'll take that question too if no one else does. 
What we--I had mentioned in my testimony the example of Wal-
Mart and what happened in that case where the subsidiary was in 
the middle between both the U.S. Helms-Burton law and the 
Canadian blocking statute is they ended up abiding by Canadian 
law. That is a common practice, but it is really hard to know 
how most companies would line up on this because they don't 
want to talk about it.
    Chairman Crane. Do you believe that the enactment of the 
Helms-Burton legislation has succeeded in increasing the 
pressure on Castro's regime or do you believe that it has 
focused attention primarily on U.S. disputes with our major 
trading partners over sanctions policy?
    Mr. O'Leary. I think that question can be answered very 
straightforwardly. The results of Helms-Burton has simply been 
to deteriorate our relationships with our trading partners, and 
it has had no beneficial effect that can be measured in any 
substantive way.
    Mr. Barnes. I would just add, Mr. Chairman, that what we 
see at USA Engage is the isolation of the United States. The 
objective of Helms-Burton was to isolate Cuba. But, in fact, it 
has rallied many in the international community to Cuba's 
defense, unfortunately. The objective of Helms-Burton was a 
good one: To remove the repressive regime in Cuba. But it seems 
unfortunately to have had the opposite effect. Part of the 
problem is that it's a unilateral sanction. We're all alone 
here. If there were--as the sanctions were on South Africa or 
Haiti or in some other instances--global sanctions, enacted by 
the United Nations and everybody got together and participated 
it would be a very, very different situation. But the United 
States is acting alone in this situation, and, in fact, pushing 
some of our friends in the international community into the 
Cuban orbit in a way that was never intended, clearly.
    Mr. Kavulich. Mr. Chairman, the Helms-Burton legislation or 
law has had an effect upon Cuba. It has increased their cost of 
borrowing. It has also caused some companies that were looking 
to do business there, whether it be import-export investor 
provider services, to reconsider. So it has had some effect. 
The Cuban Government has said it has. The question, though, 
remains has it had the effect that those who supported the 
Helms-Burton law said that it was intended to have. And at the 
end of the day, if memory serves me, those people who initially 
supported the Helms-Burton legislation said that its primary 
goal was to help resolve the issue of the certified claimants. 
And so, in answer to that question, I think my colleagues up 
here would agree that we haven't seen much movement there.
    Mr. Muse. I'm not sure I agree--that it was a rationale for 
the law to solve certified claims. We were vigorously opposed 
to it. And I don't want to disagree with my copanelist, but I 
don't recall that ever having been one of the bases of the law.
    In fact, what it did was elevate a group of non-U.S. 
nationals to claimant status in order to try to create a 
blockade on foreign investment into Cuba to accomplish a set of 
foreign goals with respect to that island. But in doing so, it 
diminished American standing in the world by violating 
international law.
    Mr. Kavulich. Yes, I didn't mean to suggest that that was 
what it--what the people intended. I was saying that that's 
what the people who were supporting it said. I mean, that's 
what they were going around saying that this was for the 
benefit of the claimants. The claimants didn't support it.
    Mr. O'Leary. Mr. Chairman, in our statement that's been 
submitted for the record, we have undertaken a detailed 
analysis of the stated objectives of Helms-Burton and our 
observed consequences thereof, which would invite your 
attention. I won't bore you with repeating it.
    Chairman Crane. Thank you very much.
    Mr. Neal.
    Mr. Neal. Thank you, Mr. Chairman.
    Members of the panel, I think you were all here to hear the 
first panelists, including the Members of the House. How do you 
respond to the argument that they offered today that this isn't 
about economics, it's about human rights?
    Mr. O'Leary. Mr. Neal, in the first instance, we would 
fully agree. It is about human rights. And we are frankly 
embarrassed by the conduct of the United States in the punitive 
measures that we've imposed on 11 million people without having 
made one substantive step forward in what we say our goal is.
    Mr. Neal. The other panelists?
    Mr. Barnes. I would agree with that. I think that we've 
tried for 39 years to--we've tried a certain policy for 39 
years, to isolate Cuba, to impose an embargo. It's time to 
consider a different approach, one that, in the judgment of the 
670 members of USA Engage, has more likelihood of success. I 
once heard Lek Walensza, the successful anticommunity freedom 
fighter in Poland, when he was asked what advice he would give 
to open up Cuba, and he said, ``open up.'' He said a Communist 
regime cannot withstand openness. And if large numbers of 
American citizens--students, businesspeople, clergy, labor 
workers--all kinds of people were visiting a regime that's only 
90 miles away, it would be very difficult for that Communist 
regime to keep the lid on.
    We asked that very question--our congressional delegation--
former Members asked that very question of the dissidents. 
Would the Castro regime be able to withstand a total influx of, 
you know, millions of Americans? It's only 90 miles away. It 
would be pretty easy to get there. They said it wouldn't last 6 
months.
    Mr. Muse. I don't think the invocation of the phrase human 
rights ought to shield U.S. policy toward Cuba from an inquiry 
as to what its costs are to the nation at large, that is, to 
all U.S. citizens. What are the costs to the United States and 
the world, in terms of our relations with other nations? I 
don't think anyone disagrees that human rights is a goal worth 
pursuit. But it's the means whereby we pursue that goal that 
ought to be a subject of discussion.
    Mr. O'Leary. Mr. Neal, I would just add that in the years 
I've spent in business, it would be fair to say the American 
business community rarely has a single view on any subject. We 
are as diverse and divided, if you will, in opinions. On this 
particular subject, we just know of no substantive objection by 
any part of the business community to the position the Chamber 
has advanced on these issues. We have a failed policy. And we 
should get on with things which are in the interest of the 
Cuban and in the interest of the American economy.
    Mr. Neal. Mr. Barnes, based upon your visit and your 
experience, would you disagree with Mr. Menendez that the 
Pope's entree is similar in fact to what happened in Eastern 
Europe since you quoted Walensza?
    Mr. Barnes. I wasn't there for the Pope's visit, but I've 
talked to a lot of people who were. And I heard last weekend 
from Cardinal Law, who was there with him, that the Pope's 
visit was an extraordinary experience for the hundreds and 
hundreds of thousands of Cubans who went out to hear him. The 
Cuban bishops issued a statement some weeks after the Pope's 
visit, saying that the Pope's visit should not be an isolated 
incident; that there needs to be an ongoing approach of other 
people coming to Cuba. They're clearly calling for engagement 
by the international community with Cuba to follow up on the 
extraordinary visit, the historic visit of the Pope.
    Mr. Neal. Thank you. Thanks, Mr. Chairman.
    Chairman Crane. Do you have questions?
    Mr. Rangel. Yes.
    What do you think we can do to organize the business 
community to speak out? I don't ever recall where so few people 
can support such a broad general foreign policy, as has 
happened with Helms-Burton. I was so glad to see the U.S. 
Chamber of Commerce come out at least partially. But there's 
something wrong when we don't hear on a regular basis American 
businessmen speaking out against something that is so un-
American and so antibusiness.
    Mr. O'Leary. Well, Mr. Rangel, I accept your criticism, 
except I don't share your view. We have consistently pressed 
this case. We undertook every effort we could to demonstrate to 
the Congress that Helms-Burton was bad policy. It was misguided 
and it was counterproductive. I will be frank to say that 4 or 
5 years ago, when we addressed ourselves with a comprehensive 
effort on these questions, a number of my business colleagues 
were unwilling to subject themselves to the sort of emotional 
allegations, which we observed earlier in this session. And 
quite frankly, what I now sense is--the conclusion is, enough 
is enough. Let's get on with it.
    Mr. Barnes. Mr. Rangel, I have here a copy of a full-page 
ad that appeared in the Wall Street Journal just a few weeks 
ago, taken out by this organization, USA Engage--670 business 
organizations and companies. I won't read the whole thing, but 
I'll read just one little bit of it: ``We believe the time is 
right to explore new initiatives to promote freedom in Cuba. As 
a first step, we urge that you publicly commit''--this is an 
open letter to President Clinton, Speaker Gingrich, and 
Majority Leader Lott--``that you publicly commit in the State 
of the Union Address and the Republican response to end the ban 
on the export of U.S. food as well as lift the restrictions on 
the sale of medical products. We would hope that this opening 
will produce further opportunities for improved relations. 
Leadership is something all Americans respect. We stand ready 
to support you in a new policy of engagement with Cuba. 
Sincerely.''--and then the list of the principal organizations. 
So they're trying, and this kind of thing will continue from 
the business community.
    Mr. Rangel. Well, let me thank all of you for your 
continued engagement, and let's hope that the group gets 
stronger and more effective.
    Chairman Crane. I want to express appreciation to you all 
too for coming and testifying today. And with that, we shall 
introduce our next panel: Thomas Quigley, policy advisor, 
United States Catholic Conference; Silvia Wilhelm, executive 
director, Cuban Committee for Democracy; Craig Fuller, 
cochairman, Americans for Humanitarian Trade with Cuba; Brad 
Gary, member, board of directors, Medical Device Manufacturers 
Association; and Dan Gerdes, chairman of U.S. Wheat Associates.
    And we will proceed in the order that I introduced you.
    Mr. Quigley.

STATEMENT OF THOMAS E. QUIGLEY, POLICY ADVISOR, LATIN AMERICAN 
    AND CARIBBEAN AFFAIRS, UNITED STATES CATHOLIC CONFERENCE

    Mr. Quigley. Thank you, Mr. Chairman.
    My testimony will focus largely on the role and status of 
the Catholic Church in Cuba and the stated views of that church 
as they relate to the themes of these hearings. The prepared 
testimony reviews some of the recent history of that church, 
which may help provide a context for discussion of the 
sanctions policy.
    Coming to the present, those who witnessed the tremendous 
outpouring of enthusiasm and active participation by hundreds 
of thousands of Cubans in the papal Masses might be excused for 
thinking that this is a strong, vibrant, confident community 
that has history clearly on its side. And they would be right 
up to a point. But it would be wrong to imagine that this 
community or its leadership could think of asserting the kind 
of independent action, even dissident activity, even if it were 
so inclined, that some here seem to think it should.
    The potential for the Catholic Church in Cuba to further 
accelerate the already existing process of positive change is 
limited by at least two factors: The statistical reality of 
that church, that is, the very limited number of pastoral 
workers, whether clerical, religious, or lay, who are able to 
play a more active role in the larger society; and second, the 
inadequate degree of solid formation in the life and teachings 
of the church, especially with respect to its social teachings.
    The Catholic Church in Cuba today is the largest single 
institution in that country completely free of control by the 
party; the religious body that has probably suffered the 
greatest persecution by the state over the past three decades; 
a church that is presently enjoying a high degree of cohesion, 
self confidence, and hope for the future; and yet a church that 
is largely deinstitutionalized and resource poor, especially in 
terms of personnel. The active church is a relatively small 
group of bishops. There are 13 at present. Priests--some 290 or 
so. Religious sisters--something over 530, and committed 
laypersons, some of whom who have lived through these nearly 40 
years, but most who have known only the present government. 
These and the other numbers represent a great increase when one 
considers that, for most of the past three decades, there were, 
at any given time, about 200 priests and 200 religious sisters 
as contrasted with the roughly 800 priests and well over 2,000 
sisters at the time of the revolution. But still a woefully 
inadequate number of church professionals, for over 4 million 
Catholics, never mind the 11 million-strong Cuban population.
    In addition to the limited numbers, the debilitating 
effects of three decades of oppression and marginalization 
should not be ignored. In reading the recent social documents 
of the Cuban church, one is struck by the strong emphasis given 
the great need for formation of the church's social teaching. 
The concern for the human rights and dignity of every person, 
especially the poorest, is a recurring theme. In no way, 
however, should the growing numbers of Christian social 
activists be confused with the explicitly political dissidents 
who are the focus of attention of international human rights 
groups. And it would be a mistake to interpret the church's 
strong defense of human rights activists as an endorsement of 
widespread dissidence or a call for active opposition to the 
present regime. It would not only be a mistake, but a very 
dangerous misinterpretation of how the church views its role in 
today's society.
    The written testimony speaks of the church's view of this, 
including its mission to provide material assistance to the 
poor and needy and of the work of Caritas, the church's 
development and relief agency. Some in this country would 
apparently like to see Caritas assume a larger task in Cuba, 
such as overseeing the distribution of much greater amounts of 
donated food stuffs and medicines, or serving as end-use 
monitor for U.S. authorized sales of such. Caritas will do all 
it can to alleviate the very real sufferings experienced by 
many in Cuba today. But it has made clear that it will not and 
can not be harnessed to a political program, whether in support 
of or in opposition to the present government. And it has also 
made clear that its own institutional limitations make any 
rapid increase in its workload problematic.
    Among other conditions, sanctions should be applied only 
after less coercive measures have been tried and failed. The 
harm caused by them should be proportionate to the goals 
sought. They should be temporary in nature, targeted against 
the aggressor and not directly against innocent civilians and 
should always be a part of a larger political and diplomatic 
effort to seek a peaceful resolution to the conflict.
    Few will argue today that the U.S.-imposed embargo against 
Cuba meets these or other criteria. They have been in effect 
for an inordinately long time and apparently have achieved 
little of their intended effect and have almost certainly 
contributed to the worsening of the standard of living of the 
average Cuban citizen. What they have done, according to many 
analysts, is provide convenient cover for the regime by 
enabling every shortage of food, medicine, and other basic 
commodities to be blamed on the U.S. embargo.
    In 1992, the Cuban bishops said that embargoes that affect 
the flow of products essential for the people, including food 
and medicines, ``are morally unacceptable, are generally in 
violation of the principles of international law, and are 
always contrary to the values of the Gospel.''
    In conclusion, Mr. Chairman, the United States Catholic 
Conference urges Congress to take steps to end the present 
restrictions at least on the sale of food and medicines. Cuban 
people need access to such commodities without excessive 
prohibitions and restrictions. As Archbishop McCarrick said 
last January, ``The present sociopolitical system, privileging 
those with power and ready access to hard currency but leaving 
great numbers of the poor with inadequate access to food and 
medicine, will not be changed overnight. The demands of 
elementary social justice, however, call upon us to do what we 
can to alleviate the suffering of the Cuban people, especially 
the poorest and most vulnerable. Ending the restrictions on the 
sale of food and medicines, as legislation currently in both 
Houses of Congress calls for, would be, in our view, a noble 
and needed humanitarian gesture and an expression of wise 
statesmanship on the part of our elected leaders.''
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Thomas E. Quigley, Policy Advisor, Latin American and 
Caribbean Affairs, United States Catholic Conference

    Thank you, Mr. Chairman, for the opportunity of presenting 
testimony on behalf of the United States Catholic Conference. 
My testimony will focus largely on the role and status of the 
Catholic Church in Cuba and the expressed views of that church 
as they relate to the themes of these hearings. Of the four 
focus points for the hearings listed in the Committee advisory, 
I will confine my comments to just two: the question of the 
impact on the Cuban people of the present United States policy, 
and the matter of humanitarian assistance to the Cuban people.
    To do this, I would like first to relate to the current 
debate on U.S. sanctions and U.S. policy toward Cuba by noting 
something of the recent history of the Catholic Church in Cuba, 
a history that has seen its most dramatic moment in the visit 
of Pope John Paul II to the island nation last January. Some 
observations about that Church both before and following the 
Castro revolution may help to provide a context for this 
discussion.

                  The Church in Pre-Revolutionary Cuba

    In the years just prior to the 1959 accession to power of 
Fidel Castro, the Catholic Church had both great strengths and 
considerable weaknesses. Although the vast majority of the 
population was at least nominally Catholic, the number of 
clergy and religious ministering to the people was severely 
limited and, as in many other Latin American countries of the 
time, heavily dependent on personnel from abroad. However, by 
the early '50s, the various religious orders in the country 
were outstanding for their educational and social service 
activities. They not only conducted several hundred schools 
throughout the country but staffed over 250 charitable 
institutions, including 52 homes for the elderly, orphanages 
and hospitals.
    Despite the strong participation of many active Catholics, 
including clergy and religious, in the efforts to overthrow the 
Batista dictatorship--bishops had called on Batista to resign 
and had initially welcomed what they hoped would be the re-
establishment of democratic rule of law--relations between the 
Church and the new regime deteriorated very rapidly. The 
bishops early on protested the brutality of the hurried show 
trials and the immediate execution of many accused of criminal 
behavior during the Batista years, and increasingly found 
themselves forced to criticize, and eventually denounce, the 
excesses of certain laws imposed by the state as well as the 
growing influence of the communist party.
    In May of 1961, just 37 years ago, following the disastrous 
Bay of Pigs invasion the previous month (during which Catholic 
schools, convents and rectories were occupied), all private 
schools in the country were definitively shut down and their 
properties expropriated. In September of that year, 131 priests 
and religious, including the auxiliary bishop of Havana, Mons. 
Eduardo Boza Masvidal, were rounded up and summarily expelled 
on the Spanish liner Covadonga. Much of the Catholic Church in 
Cuba was effectively shut down, and it was completely shut out 
of any participation in the life of the larger society. The 
Church was ostracized, denounced, ridiculed; media campaigns 
against the Church, and religion in general, became common. So-
called scientific materialism, atheism, became part of the 
state-imposed curriculum in all the schools. To attend Mass, to 
have one's children baptized or confirmed, to have any open 
contact with the Church became dangerous, and consequently only 
small numbers of the most dedicated or courageous Catholics did 
so. Hundreds, then hundreds of thousands, left, taking with 
them much of the Church's most active membership. The Catholic 
Church was reduced to a shadow of its former self.

                        The Church in Cuba Today

    Those who, last January, witnessed the tremendous 
outpouring of enthusiasm by hundreds of thousands of Cubans and 
their full-throated participation in the public Masses 
celebrated by the Holy Father, might be excused for thinking 
that this is a strong, vibrant, confident community that has 
history clearly on its side. And they would be right, up to a 
point. But it would be wrong to imagine that this community, or 
its leadership, could think of asserting the kind of 
independent action and even dissident activity--even if it were 
inclined to do so--that some in the United States seem to 
believe it should. As U.S. policy makers contemplate the 
potential for this community, the Catholic Church in Cuba, to 
greatly accelerate the already existing process of positive 
change in Cuba, two factors should be kept in mind. One is the 
statistical reality of that church; i.e., the very limited 
number of pastoral workers, whether clerical, religious or lay, 
who are able to play the more active role in the larger society 
that some here seem to be calling for; the second is the 
inadequate degree of solid formation in the life and teachings 
of the Church that most of today's Catholic Cubans yet possess. 
This is especially true with respect to the social doctrine of 
the Church.

                     Profile of the Church in Cuba

    What exactly do we understand by the Catholic Church in 
Cuba? It is, at one and the same time, the largest single 
institution in the country that is not under the control of the 
Communist Party; it is the religious institution that, with the 
possible exception of the much smaller Jehovah's Witnesses, has 
suffered the greatest persecution by the State and its 
officially sanctioned atheist ideology over the past three 
decades; it is a church that is presently enjoying--due in good 
measure to the papal visit--an unprecedented sense of cohesion, 
of self-confidence, of hope for the future; and yet it is a 
church that is largely de-institutionalized and relatively 
resource-poor, especially in terms of personnel. The active 
Church of Cuba is a relatively small group of bishops, priests, 
religious and committed laypersons, the last numbering at most 
some few hundreds of thousands, some of whom have lived through 
these nearly forty years, but most who have known only the 
present government, yet yearn as strongly as their elders for a 
different society.
    These are the Cubans we are talking about when we ask if 
the Church can be a force for social change in Cuba. According 
to the generally accepted figures, some four million of Cuba's 
eleven million citizens may be considered at least nominal 
Catholics today. But this reasonably large number of what might 
be called cultural Catholics, while certainly disaffected by 
much of what has taken place under the present regime, confine 
their religious expression largely to the private sphere, to 
their devotion to God as represented, for example, in the image 
of the Sacred Heart of Jesus, which formed such a dramatic 
backdrop for the papal Mass in Havana, and to his mother under 
the essentially Cuban title of Our Lady of Charity of Cobre. 
Popular religiosity, a widespread phenomenon throughout most of 
Latin America, is not to be dismissed as unimportant to the 
ethos of a people, but neither is it easily harnessed in the 
cause of any particular social or political goal.
    Within the eleven dioceses that make up the Church in Cuba, 
there are thirteen bishops, some 291 priests, divided roughly 
equally between diocesan clergy (144) and members of religious 
orders (147). (These figures are from January and so some of 
the new visas granted to foreign clergy and religious in the 
light of the papal visit may be now have pushed the figure over 
the 300 mark--the first time since 1961.) There are some 33 
deacons, that is, members of the clergy but not priests; most 
if not all are married men. There are 26 religious brothers, 
non-ordained members of religious congregations or orders, and 
24 members of secular institutes. And, of great importance, 
there are now some 538 religious sisters. This totals 925 
``official'' personnel of the Church in Cuba.
    Quite an increase when one considers that for most of the 
past three decades, there were at any given time about 200 
priests and 200 sisters, as contrasted with the roughly 800 
priests and 2,000 sisters at the time of the revolution. But 
still a woefully inadequate number of church ``professionals'' 
for over four million Catholics, never mind the now eleven 
million-strong Cuban population.
    Besides the numbers, country of origin is also a relevant 
factor, especially in today's Cuba. Of this total of 925 full-
time church personnel, only 381--less than 40 %--are Cuban-
born. For the clergy, the ratio is more equal, as virtually all 
of the diocesan priests (144) are Cuban-born, as are several of 
the religious priests (147), and recent years have seen a 
fairly dramatic up-tick in ordinations of Cuban seminarians, 
somewhat greater than the numbers lost to death or retirement.
    The foreign-born pastoral workers, coming from 33 
countries, representing the universal charity of the Church, 
are a great sign of international solidarity and provide--as 
they have done for generations--an immeasurably important 
service to the people of Cuba. But their ``non-Cubanness,'' 
especially given the hyper-nationalism of the present regime, 
could potentially represent a problem. The recent decision of 
the Cuban government not to renew the visa of the American 
Capuchin, Fr. Patrick Sullivan, obliging him to leave the 
country at Eastertime, offers a telling illustration. No 
charges were, or could be, brought against him; but because his 
behavior was considered as not conforming sufficiently to what 
is tolerable for foreigners, he was invited to leave.

                      Formation of the Cuban Laity

    In addition to the limited personnel resources of the 
Church, the debilitating effects of three decades of oppression 
and marginalization cannot be ignored. The reforms and renewal 
in the Catholic Church effected by the Second Vatican Council 
(1962-65), and the extraordinary meetings of the Latin American 
episcopates in Medellin (1968) and Puebla (1979), were slow in 
penetrating the protective covering the Cuban authorities had 
thrown up around their island.
    Cuba's bishops, priests and religious, of course, were 
fully attuned to these developments but their ability to convey 
them to the masses of the faithful was severely limited.
    After the 1979 Third General Assembly of the Latin American 
Episcopates in Puebla, Mexico, the Cuban bishops determined to 
set in motion a process of ecclesial reflection and analysis 
that would result in a kind of ``Puebla meeting'' for the 
Church in Cuba. This event, called ENEC, the Cuban National 
Church Gathering (Encuentro Nacional Eclesial Cubano), took 
place in 1986. It was the first major church event of its kind 
since the Catholic Congress of 1961 and has been followed, most 
notably, by three national ``social weeks,'' convened by the 
Cuban Justice and Peace Commission. The documents from these 
meetings offer an important window onto the social and 
political thinking of some of the most active members of the 
Church in Cuba.
    One is struck, in reading them, of the strong emphasis 
given to the task of formation in the Church's social 
teachings, of the need to continue strengthening the work of 
formation at the level of the Christian base communities, of 
formation in solidarity, of building up the Christian 
community. The concern for the human rights and dignity of 
every person, especially for what are termed the ``new poor, 
which exist in every society'' is a recurring theme In no way, 
however, should these Christian activists be confused with the 
explicitly political dissident activists who are the focus of 
attention of international human rights groups.

                       Dissidents and the Church

    Church leaders with whom I have spoken have the greatest 
respect for these individuals, many of whom have served long 
sentences in Cuba's jails for their dissident activity, often 
confined solely to their expressed opinions. These are the 
people the Pope spoke for in his moving remarks on the ``world 
of suffering'' at the leprosarium of San Lazaro: ``These 
prisoners of conscience suffer an isolation and a penalty for 
something for which their own conscience does not condemn them. 
What they want is to participate actively in life with the 
opportunity to speak their mind with respect and tolerance. I 
encourage efforts to reinsert prisoners into society.'' It 
would be a mistake, however, to interpret the Church's strong 
defense of Cuba's human rights activists as an endorsement of 
widespread dissidence or a call for active opposition to the 
present regime. It would not only be a mistake but a very 
dangerous misinterpretation of how the Church views its role in 
today's society.
    Since the mid-80s, the Church (as well as other sectors of 
the society) has enjoyed an increased freedom and ability to 
function more openly than in the previous decades. Except for 
the brief set-back in the early 90s, following the events in 
Eastern Europe, the dissolution of the Soviet Union and the 
subsequent ``special period'' of economic hardship, the 
``space'' available to the Church has continued to widen. Large 
numbers of people throughout the island have been re-
discovering their religious roots or approaching the churches 
for the first time--this is true for all religious bodies in 
Cuba--and it is once again acceptable for people to express 
their faith commitments openly.

                          The Role of Caritas

    The Catholic Church repeatedly refers to its threefold 
mission in society: its liturgical function, that is, the 
freedom to worship God freely and openly; its charitable 
function, the right to provide material assistance to the poor 
and needy; and its prophetic function, that of proclaiming the 
Gospel in all its dimensions, including the denunciation of 
evil, including evil for which the state is responsible. 
Throughout the revolutionary period, the Church has enjoyed a 
relative freedom of worship; public processions and other 
religious expressions have been proscribed, but most of the 
churches have remained open. The once outstanding role of the 
Church in providing help to the poor and infirm had been 
greatly reduced until the early 1990s when the state welcomed 
the development of the Caritas offices in each of the nation's 
provinces. Caritas is the Church's development and relief 
agency and is part of a worldwide network of such agencies, 
many of which provide donations of food, medicine, building and 
other materials to Caritas Cubana, thus enabling the Church in 
Cuba to resume more of its traditional role in providing direct 
help to the needy. It is arguably the largest, completely 
independent non-governmental organization in Cuba today.
    Some in this country would like to see Caritas assume a 
much greater role, perhaps oversee the distribution of large 
amounts of privately donated foodstuffs and medicines, or serve 
as an accepted end--use monitor for U.S. authorized sales of 
such items. Caritas is prepared to do what it can to alleviate 
the very real sufferings experienced by many in Cuba today, but 
it has made clear that it will not and cannot be harnessed to a 
political program, whether in support of or in opposition to 
the present government. And it has also made clear that its own 
institutional limitations (there are barely 30 full-time 
Caritas workers throughout the island at present) make any 
rapid increase in its workload unlikely.

                   The Church and Economic Sanctions

    It is well known that the Church supports the imposition of 
sweeping embargoes only under very strict conditions. As 
aggressive acts, embargoes are required, in Catholic social 
teaching, to meet stringent requirements. Among other 
conditions, they should be applied only after less coercive 
measures have been tried and failed; the harm caused by 
sanctions should be proportionate to the goals sought; they 
should be temporary in nature, targeted against the aggressor 
and not directly against innocent civilians, and should always 
be part of a larger political and diplomatic effort to seek a 
peaceful resolution to the conflict.
    Few will argue today that the U.S.-imposed embargo against 
Cuba meet these or other criteria. They have been in effect for 
an inordinately long time, they have apparently achieved little 
of their intended effect, and have almost certainly contributed 
to the worsening of the standard of living of the average Cuban 
citizen. What they have done, according to many analysts, is 
provide convenient cover for the regime by enabling every 
shortage of food, medicine and other basic commodities to be 
attributed to the United States ``blockade.''
    In 1992, the Cuban bishops wrote: ``Total embargoes that 
affect the flow of products essential for the people, including 
foods and medicines, indispensable for the population, are 
morally unacceptable, are generally in violation of the 
principles of international law, and are always contrary to the 
values of the Gospel.'' While the U.S. embargo may not qualify 
as a ``total'' embargo, its deleterious effect on the flow of 
goods essential for the people seems undeniable.
    In their major pastoral letter of 1993, the bishops 
deplored ``the sad experience of foreign interventions in our 
national affairs,'' both that of the Soviet bloc, the end of 
whose subsidies had by then become the major source of the 
``special period'' of austerity, and that of the United States, 
whose ``embargo, trade restrictions, isolation, threats and the 
like'' continue to disadvantage the average Cuban. ``We bishops 
of Cuba,'' they went on, ``reject any kind of measure that, in 
order to punish the Cuban government, serves rather to 
aggravate the problems of our people.'' And following the 
passage of the 1996 ``Libertad'' Act (Helms-Burton), the 
bishops expressed their concern that the law runs the risk of 
``making even more difficult the likelihood of finding peaceful 
means to lead to the reconciliation of all Cubans.''
    Finally, as we know, the Holy Father twice made reference 
to economic sanctions during his visit to Cuba in January. Both 
instances placed equal if not greater criticism on similar 
limitations on people's freedom imposed by the Cuban 
government, but the sharp criticism of the U.S. sanctions was 
unmistakable. The Cuban bishops highlighted the point in their 
post-visit assessment: ``In the same line of his social 
teaching, in referring to the restrictive economic measures 
imposed on Cuba from outside, [the Pope] called them clearly 
unjust and ethically unacceptable.''

                               Conclusion

    The U.S. Catholic Conference urges the Congress to take 
appropriate steps to end the present restrictions at least on 
the sale of food and medicines to Cuba. The Cuban people, as 
Archbishop Theodore McCarrick said in his January 30, 1998 
``Statement on Cuba in the Light of the Papal Visit,'' need 
access to such commodities as food and medicine from abroad 
without excessive prohibitions and restrictions. ``The present 
socio-political system,'' he wrote, ``privileging those with 
power and ready access to hard currency but leaving great 
numbers of the poor with inadequate access to food and 
medicine, will not be changed overnight. The demands of 
elementary social justice, however, call upon us to do what we 
can to alleviate the suffering of the Cuban people, especially 
the poorest and most vulnerable. Ending the restrictions on the 
sale of food and medicines, as legislation currently in both 
Houses of the U.S. Congress calls for would be, in our view, a 
noble and needed humanitarian gesture and an expression of wise 
statesmanship on the part of our elected leaders.''
    Thank you, Mr. Chairman.
      

                                


    Chairman Crane. Thank you, Mr. Quigley.
    Ms. Wilhelm.

    STATEMENT OF SILVIA WILHELM, EXECUTIVE DIRECTOR, CUBAN 
            COMMITTEE FOR DEMOCRACY, MIAMI, FLORIDA

    Ms. Wilhelm. Before starting my remarks, I need to make a 
small but I think significant correction to a statement made by 
a Member of the Subcommittee a little while ago that there was 
no Cuban-American representation on the panel. Wilhelm, my last 
name, is nothing more than a result of 26 years of a wonderful 
marriage to a third-generation German-American. I am a Cuban-
American from Miami and the executive director of the Miami and 
Washington-based Cuban Committee for Democracy.
    First of all, I want to thank the Members of this 
Subcommittee for giving me the opportunity to speak not only on 
behalf of the organization I represent but also on behalf of 
thousands of Cuban-Americans who believe that a reevaluation of 
U.S. economic policy toward Cuba is long overdue.
    The Cuban Committee for Democracy is a nonprofit 
organization that opposes the Castro government and believes 
that a peaceful, negotiated transition to democracy in Cuba 
could be better accomplished through constructive engagements 
rather than fruitless isolation that contributes to the misery 
of the Cuban people. We also believe that the major blame for 
the disastrous situation that Cuba faces today is a result of a 
failed internal economic and social policy. Yet, U.S. policy 
has provided the excuse that the Cuban Government has used to 
blame their problems on such an embargo. Isn't it time to make 
them accountable? However, the U.S. embargo of food and the de 
facto embargo of medicine is causing further deterioration and 
misery and should not continue to be enforced.
    I left Cuba in January 1961; smuggled out of the country at 
the inception of the Pedro Pan Program which eventually 
provided escape for over 20,000 Cuban children whose parents 
believed that it was in their children's best interest to leave 
Cuba rather than to be raised under a Communist system. As most 
Cuban-Americans of my generation, I was supportive of the 
isolation policy of the United States toward Cuba and 
specifically the trade embargo on the island. But in 1994, I 
made a very difficult decision to visit relatives who had 
remained in Cuba and were experiencing tremendous economic 
hardship. My experience from that trip dramatically changed my 
opinion of U.S. policy and helped make my decision to actively 
work to modify such policy. Specifically, a policy that places 
restrictions on the sale of food and medicine to the Cuban 
people. I was haunted by the lack of proper nutrition; lack of 
basic vitamins and medicines; and the presence of significant 
parasite infection in the population which were affecting many 
of the people I met including members of my family.
    My physician-husband accompanied me on my second trip to 
Cuba in 1996. We took the time to visit hospitals and witness 
the scarcity of medicines in Cuba. My uncle, an American 
trained physician who lives in Cuba, contracted cancer and 
shared with us the trouble he was having getting access to 
American-made x-ray film and high-tech drugs to treat his 
deteriorating condition. Other American physicians who have 
visited the island have come back with similar observations.
    I returned to Cuba last January as a member of a group of 
pilgrims led by a Cuban-American priest from Tampa to witness, 
along with the people of Cuba, the historic visit of His 
Holiness, John Paul II. Also traveling with the group was the 
president of the Cuban Committee for Democracy, Dr. Eliceo 
Perez Stable. We listened as he asked the Cuban Government to 
continue opening much needed spaces within Cuba so that human 
rights can be a reality. We heard him denounce the U.S. 
economic sanctions against Cuba as unethical and immoral and 
asked all Cubans in and out of Cuba to find ways of 
reconciliation. We witnessed a world religious leader, champion 
of human rights and a staunch anti-Communist crusader who 
recognizes that the best way to pave the way for a peaceful 
transition to democracy in Cuba is the way of engagement by 
responding to the slow movement of the Castro regime.
    Following the Pope's admonition, open discussions within 
the Miami community as to how to bring about much needed 
reconciliation between the people of Cuba and those of the 
Diaspora have started to take place. The once accepted rhetoric 
of revenge is now giving way to a rhetoric of reconciliation. A 
day doesn't go by in Miami that I'm not approached by Cuban-
American friends of mine who have disagreed with my views 
toward dealing with the Cuban dilemma and are now telling me 
they are planning their trip to Cuba this summer, this fall, 
next spring. The longstanding U.S. policy of economic sanctions 
against Cuba which at the time of inception was viewed as the 
most effective way to deal with the Communist threat posed by 
the Castro government has not brought about its original intent 
which was the overthrow of such government. The embargo has not 
worked.
    The embargo of food and the de facto embargo of medicine 
are the only ones of its kind. Even current embargoes against 
Iran, Libya, and Iraq do not ban the sale of foods to those 
countries. Politics should never interfere with health and 
nutrition especially when the people are the most vulnerable. 
They are the ones who bear the brunt of such sanctions.
    The United States has a longstanding record of supporting 
humanitarian causes. This record should continue in its 
dealings with Cuba. We wholeheartedly support the President's 
recent initiatives, but humanitarian support is not enough. 
Humanitarian aid addresses the few and not the many. It 
increases dependency in an era of market-driven forces. Cubans 
must learn the value of capitalistic trade and business 
practices and should not be dependent on the charity of the 
United States or their relatives abroad. This policy needs to 
be evaluated now.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]
Statement of Silvia Wilhelm, Executive Director, Cuban Committee for 
Democracy, Miami, Florida

    To the Honorable members of the Subcommittee on Trade of 
the Committee on Ways and Means, members of the press and 
general public gathered here today:
    My name is Silvia Wilhelm. I am a Cuban American resident 
of Miami and the Executive Director of the Cuban Committee for 
Democracy. It is indeed an honor to have been invited to appear 
in front of you today as a witness on a hearing that will re-
evaluate U.S. economic and trade policy toward Cuba. The Cuban 
Committee for Democracy, founded in 1993, is a non-profit 
organization of Cuban-Americans of all walks of life, including 
professionals, academics and entrepreneurs. We are opponents of 
the Castro government who believe in a peaceful, negotiated 
transition to democracy in Cuba. Like many Cuban Americans, we 
have had to confront the issue of the U.S. economic embargo. 
Our position has been and remains one that believes that the 
goal of promoting a democratic Cuba would be better served by 
constructive engagement rather than by fruitless isolation that 
contributes to the misery of the Cuba people.
    In addition to representing the Cuban Committee for 
Democracy as its Executive Director, I am here to speak as a 
representative for the thousands of Cuban American exiles who 
make up the ``silent'' majority and who believe that a peaceful 
transition to democracy in Cuba is the appropriate resolution 
to the Cuban dilemma.
    I left Cuba as a child in January of 1961 smuggled out of 
the country at the inception of the Pedro Pan program which 
eventually provided escape for over 20,000 Cuban children whose 
parents believed that for them to leave their country of birth 
was more important than their staying and living under a 
communist regime. As most Cuban-Americans of my generation, we 
left behind everything we owned but most important we left 
behind everything we loved. The next 33 years of my life were 
spent as an American citizen getting an education, marrying a 
native-born American physician, raising a family and becoming a 
business woman running my own company in the Miami area. Not 
unlike most Cuban Americans during this time I was supportive 
of the isolation policy of the United States towards Cuba.
    In 1994, I made the very difficult decision to visit 
relatives in Cuba returning for the first time since 1961. My 
relatives had communicated their hardships and I wanted to 
witness them first-hand and help in whatever way was possible. 
What I experienced on that first visit changed dramatically my 
opinion of U.S. policy and helped make my decision to actively 
work to modify such policy, specifically a policy that places 
restrictions on the sale of food and medicines to the Cuban 
people. On this first of my three trips to Cuba, I was haunted 
by the lack of nutrition, lack of commonly available vitamins 
and medicines, and the presence of significant parasite 
infection in the population, conditions that were affecting 
even members of my family.
    My nephews, who live in Centro Habana, a densely populated 
area of old Habana, with extremely poor water systems and 
dilapidated housing, all had contracted intestinal parasites. I 
had to bring with me the appropriate drugs from Miami to help 
them take care of the situation. One of their children, three 
years old at the time, was suffering not only from parasites 
but from vitamin deficiency and malnutrition. As I am sure all 
of you are aware, there are countless reports from agencies 
like the World Health Organization, the Pan American Health 
Organization, the New England Journal of Medicine and other 
scientific organizations that link the effects of the long-
standing U.S. trade embargo to these conditions of 
malnutrition, vitamin deficiency and water bourne diseases due 
to severe water contamination in Cuba. I am not qualified to 
speak on that but I have witnessed these conditions in members 
of my family still remaining in Cuba.
    I returned to Cuba in 1996 accompanied by my physician 
husband. Among other reasons, I returned to visit an uncle who 
is an American trained physician and who had elected to 
practice medicine in Cuba and now was suffering from cancer. 
During this visit my husband and I were able to experience 
first hand the scarcity of medicines and technology in Cuba. 
During a visit to a primary care facility in Pinar del Rio we 
noticed that due to the lack of appropriate medicines, herbal 
therapy was the main stay of treatment. Observations made 
during the treatment of my uncle for cancer showed that 
American technology, such as X-ray films, high-tech drugs and 
procedures were not available. Spare parts for American made 
medical equipment was nowhere to be found. The lack of these 
many times leads to less than optimal medical outcomes. My 
uncle had no qualms in blaming the U.S. embargo for the lack of 
these available drugs, technology and very needed equipment. In 
conversations with other American physicians who have also had 
an opportunity to visit Cuba similar observations have been 
made with confirmation of the negative impact on medical 
outcome. It was obvious to myself, my husband and my physician 
uncle that the ``de facto'' embargo of U.S. technology and high 
tech drugs was having a negative impact on the health of the 
Cuban people.
    As part of a group of Cuban Americans led by a Cuban 
American priest from the Tampa Bay Area, I returned last 
January to Cuba to witness along with the people of Cuba the 
historic visit of his Holiness Pope John Paul II. I listened to 
him as he exhorted all Cubans in and out of the island not to 
be afraid--afraid of changes currently occurring in the island 
for those inside it and afraid of engaging Cuba for those 
outside. I listened to him as he exhorted the Cuban government 
to continue opening spaces within Cuba so individual rights 
could be guaranteed, so that freedom of expression could be 
heard, so that freedom of association could one day become a 
reality. I heard him denounce the U.S. economic sanctions 
against the island as unethical and immoral. I witnessed the 
people of Cuba as they rejoiced with his visit and for one 
brief moment regained a long-lost sense of hope for the 
possibility of a better future. I witnessed a world religious 
leader, champion of human rights, anti-Communist crusader who 
recognized that the best way to pave the way for a peaceful 
transition to democracy in Cuba is the way of engagement by 
responding to the slow movements of the Castro regime. Who 
better than him to encourage such a policy? A man who witnessed 
his beloved Poland's reality at its time of change and now 
tries to understand the Cuban reality and impact it 
brilliantly.
    On returning to Miami it was obvious that the Pope's 
historic visit to Cuba had raised questions within the Cuban 
American community as to whether a continued policy of 
isolation towards Cuba should still apply. It also stimulated 
open discussions within this community as to how to bring about 
much needed reconciliation between the people of Cuba and those 
in the Cuban Diaspora. Prior to the Pope's visit, a Florida 
International University poll had shown that 56 percent of 
Cuban Americans polled favored allowing companies to sell 
medicines to the island while 44 percent favored the sale of 
food. Yet a poll conducted by Univision following the recent 
measures of the Clinton administration to ease some of the 
sanctions, like streamlining procedures for the sale of 
medicine and medical supplies to Cuba, the approval of direct 
humanitarian flights to the island and the legalization of 
limited remittances from Cuban Americans to relatives in Cuba, 
88% of Cuban Americans polled favored such measures. This is a 
direct indication that the Cuban American community is looking 
for other initiatives to deal with Cuba and that the once 
acceptable rhetoric of revenge is now a rhetoric of 
reconciliation. A day doesn't go by in Miami that I am not 
approached by Cuban American friends of mine who had disagreed 
with my views towards dealing with the Cuban dilemma and are 
now telling me they are planning their trip to Cuba this 
summer, this fall, next Spring. To use an unusual statement, 
``The Pope made it Kosher''
    The U.S. policy of economic sanctions against Cuba, which 
at the time of inception was viewed as the most effective way 
for the United States to retaliate against Castro's 
totalitarian government and the threat this posed to the 
national security of this country in the context of cold war 
tactics has not brought about its desired goal which was the 
overthrow of the Cuban government even after 37 years after it 
was initiated. The embargo of food and the ``de facto'' embargo 
of medicine against Cuba are the only one of its kind, even 
current embargoes against Iran, Libya and Iraq do not ban the 
sale of food to those countries. There are nutritional deficits 
among the Cuban population which in the past have contributed 
to significant illnesses; water-bourned diseases abound hurting 
those most vulnerable, like the Cuban children. The lack of 
high powered drugs to combat cancer, lack of replacement parts 
for U.S. manufactured medical equipment, making medical 
diagnosis and treatment almost impossible, and the lack of 
films for X-ray machines are just a few of the U.S. patented 
products items Cubans lack. Even though we believe that the 
major blame for the disastrous situation that Cuba faces today 
is directly related to a failed economic and political system, 
there are serious questions as to the extent of the impact that 
the U.S. embargo places on an already beleaguered and suffering 
people.
    Politics should never interfere with the health and 
nutrition of a people especially when the innocent are already 
subjected to the abuses of a totalitarian regime. These 
sanctions constitute in fact a war against a people not against 
a government. The people of Cuba are the ones that bear the 
brunt of the economic burden that these policies were designed 
to inflict. In addition, this policy has provided the excuse 
that the Cuban government has brilliantly used to blame all of 
Cuba's problems on the U.S. embargo of the island. Isn't it 
time to make them accountable? Isn't it time for them to have 
to recognize that the economic and social disasters they now 
face are on the most part manifestations of internal problems?
    The United States has a long-standing record of supporting 
humanitarian causes. This record should continue and we 
wholeheartedly support the President's recent initiatives 
towards Cuba in this direction. But humanitarian support is not 
enough. Humanitarian aid addresses the few and not the many. 
Humanitarian aid increases dependency in an era of market 
driven forces. Cubans must learn the value of capitalistic 
trade and business practices and not be dependent on the 
charity of the United States or their relatives abroad. The 
words of a Hindu proverb say it best, ``If you ever see me 
hungry at the edge of a river, do not hand me a fish, teach me 
how to fish.'' Trade and aid will pave the way for the eventual 
democratization of Cuba. These changes have to occur now. The 
continued deterioration of Cuba's economic and social order 
will make the transition to democracy much harder and could 
leave the nation in a serious state of confusion and chaos in 
case of an abrupt change in leadership.
    H.R. 1951, The Cuban Humanitarian Trade Act, gives Congress 
the opportunity to take the first steps in opening certain 
trade policies still in place and this change can help the 
Cuban people develop skills that will help them get ready to 
face a much needed Democracy, which in my opinion is 
inevitable. This is the way of the world as it approaches the 
21st Century. Cuba must be inserted into this system and should 
not continue to be isolated by the most powerful and richest 
nation in the world.
      

                                


    Chairman Crane. Thank you.
    Mr. Fuller.

    STATEMENT OF CRAIG L. FULLER, COCHAIRMAN, AMERICANS FOR 
                  HUMANITARIAN TRADE WITH CUBA

    Mr. Fuller. Thank you very much, Mr. Chairman. I've 
submitted my statement for the record, and much of it has been 
touched upon, and I thought I might just speak a bit more 
informally with you for a few minutes.
    It was my great privilege to spend 8 years in the White 
House with President Reagan and as Chief of Staff to Vice 
President Bush. During that time, we traveled, I think, if my 
count is right, to some 60 different countries. Many of those 
countries did not have a leader elected as we know ``elected 
leaders.'' Many of those countries engaged in policies that 
were in conflict with our own human rights standards, but all 
of those countries including the Soviet Union which President 
Reagan called the evil empire, including China which had 
violated many principles of human rights and democracy that 
George Bush knew so well. All of those countries we engaged 
with, and through our engagement, both economic and diplomatic, 
we've seen changes occur that for those of us who came to this 
town in 1981 we would never have imagined in this hemisphere.
    I come before you today, now, as a private citizen. 
Somebody asked me when I told them I'd be testifying before the 
Subcommittee, ``Who's your client?'' I said, ``I have no client 
on this issue.'' Others said, ``Well, then, what's your 
business interest?'' And I said, ``I'm an executive recruiter 
now. I have no conceivable business interest in this.'' I 
really come before you for sort of that old-fashioned reason: I 
simply believe what I'm advocating. I believe it's wrong for us 
to use, as a great Nation, food and medical supplies as tools 
to pursue a foreign policy change in Cuba, and what I 
discovered in the last several months, a year or so, is a great 
many other people share that view; people who have served in 
Republican administrations and esteemed Members of Congress in 
both the Republican and Democratic side: Frank Carluchi, Carla 
Hills, Malcom Wallop on part of our Americans for Humanitarian 
Trade with Cuba. Our cochairman is your esteemed former 
colleague Sam Gibbons from Florida who shares this view, and 
the view is shared by a much wider group, many of whom you've 
heard today, but it is a compelling case. It brings together 
people from a variety of sides on this a fundamental issue that 
it's time to cease denying Cubans food and medical supplies 
from this country which they would like to purchase in order to 
pursue foreign policy objectives.
    Now, I think we probably all share a common view of what 
we'd like to see happen in Cuba; that really is not the issue. 
If you do nothing, change is likely to occur, but it's likely 
to take a great deal of time. Sam Gibbons and I were in Cuba 
just a few months ago on a fully hosted visit, and if we had 
conviction before we went--and this was our first visit--our 
conviction was multiplied several times by visiting a 
children's hospital. Mr. Thomas, I guess, was asking earlier 
about the distribution system, and it's a fair question. The 
children's hospital is part of a state-owned entity and a 
state-owned complex, but the physicians there are very brave 
and courageous individuals who are fighting to save lives 
everyday, but it is shocking; it's embarrassing to go there and 
hear that they fight to keep leukemia patients alive because 
they can't get the medicines we have here to treat those 
patients or to go to the ward where the premature babies are in 
incubators and learn that of those incubators six are being 
cannibalized to keep the other six working so that they can 
save the lives of children. Why? Because they can't get a ready 
supply of parts from America to keep those incubators working, 
and if they get the parts, they get them through a third 
country at an extraordinarily high price. To be sure, the 
distribution system is not our system; it's not what we would 
ideally want, but, in fact, medical services are given to Cuban 
people free of charge. They don't have to pay dollars for 
medicine. They don't have to pay for medicine. The problem is 
if you're a child with asthma and you enter that hospital 
wheezing and having difficulty breathing, you may not be able 
to get the medication we could sell them from America because 
we simply won't allow it to be sold, and if they do get it, it, 
again, comes through a third country at a very, very high 
price.
    We do hope that you'll address this one issue. I know 
there's many complicated issues facing Cuba, but we do hope 
that you will lend your support as so many of your colleagues 
to legislation that would relieve us of this embargo of food 
and medical supplies. Americans for Humanitarian Trade with 
Cuba is an organization that's growing everyday and is growing 
around the country everyday, and to Mr. Rangel's point, we 
certainly will continue to raise our voices in support of the 
legislation and in support of this policy.
    Thank you very much.
    [The prepared statement follows:]

Statement of Craig L. Fuller, Cochairman, Americans for Humanitarian 
Trade with Cuba

    Chairman Crane and members of the Committee, thank you for 
this opportunity to present the views of a broad based, 
bipartisan citizens group called Americans for Humanitarian 
Trade with Cuba.
    As a group, we support the immediate lifting of the US 
embargo on the sales of food and medicine to Cuba, as outlined 
in the legislation. We commend the committee for reviewing a 
wide range of issues concerning economic and trade relations 
with Cuba; however, my objective is to discuss the one vital 
element of our relationship with Cuba which Americans for 
Humanitarian Trade with Cuba was formed to address.
    You will surely hear from people having considerably more 
experience with US policy towards Cuba. My involvement has been 
a recent phenomenon sparked by a straightforward conviction 
that whatever rationale our policy of denying Cubans the 
opportunity to engage in trade with the United States for 
desperately needed food and medical supplies once had, that 
rationale simply does not exist any longer following the fall 
of the Soviet Union.
    My conviction is based on the fundamental belief that we 
can gain far more through constructive engagement with Cuba, 
especially engagement that brings necessary food and medical 
supplies to those most in need. The fact that we deny children 
in Cuba the asthma medication they need for treatment or heart 
patients with pacemakers cannot be acceptable to fair minded 
rationale Americans. Thus, while a legitimate debate takes 
place over larger trade and economic policy questions between 
the United States and Cuba, I and the members of Americans for 
Humanitarian Trade with Cuba hope you will agree on the need to 
advance legislation lifting the embargo on trading food and 
medical supplies with Cuba.
    Without going into a deep historical analysis, it is 
important to understand a few key points that seem to have been 
forgotten in recent debates about the sales of food and 
medicine to Cuba. Cuba's problem procuring food and medicine 
really began after 1992, when the Cuban Democracy Act cut off 
all trade between Cuba and US subsidiaries located in third 
countries. In 1991, that trade amounted to $719 million, 90% of 
which was food and medical products. The Cuban Democracy Act 
also mandated a shipping ban that meant any vessel that docked 
in Cuba, even ships delivering food and medicine, were banned 
from calling at a U.S. port for six moths. Many of you will 
remember that there was deep concern expressed here in Congress 
about the possible negative health impact such previously 
untested restrictions would imply. But the bill's co-sponsors 
argued that such admittedly draconian measures would be short-
lived. They said that the then recent fall of the Soviet Union 
justified the toughest of measures, that the Cuban people would 
rise up against Castro and the regime would topple within six 
months. Six years later, we are still waiting. The point is, 
these inhumane measures, in the words of their own authors, 
were never meant to last this long.
    You will find wide acceptance for this position. Among the 
groups supporting the lifting of the embargo against food and 
medical supplies are: the Catholic church; the National Council 
of Churches; Jewish leaders; the United Auto Workers; the 
National Health & Human Services Employees Union; the 
agricultural community; the US Chamber of Commerce and many 
individual organizations. Perhaps the members of our group we 
are most proud to have with us are Cuban Americans. More than 
20,000 Cuban Americans from Miami alone have signed a petition 
supporting the legislation, and much more support is gathering 
nationwide everyday. Also significant is major human rights 
groups' endorsement of the food and medicine legislation, such 
as Human Rights Watch. These groups argue that the U.S. cannot 
justify calling for respect for human rights in Cuba while 
violating international human right accords itself by 
prohibiting the sale of food and medical products to Cuba. 
Attachments provide a list of our members and support groups.
    And, significantly, the legislation is supported by Cubans 
(still living in Cuba)--the head of Caritas, the Catholic 
church's aid arm in Cuba, supports the legislation as do all of 
the Cuban Bishops. And even in official meetings in Cuba 
arranged by the U.S. interest section in Havana, political 
dissidents across the board express little enthusiasm for the 
embargo but deep support for measures that would free the sale 
of food and medicine to the island.
    I firmly believe the reason for such widespread support is 
the recognition that continuing to deny the Cuban people the 
ability to purchase US medical supplies and food is doing 
nothing to further the foreign policy objectives of the United 
States.
    It was my privilege to travel to over 60 countries while 
serving as a member of the White House staff during the Reagan 
Administration, including the four years I served as chief of 
staff to Vice President Bush. During that time, while I rarely 
saw embargoes work, I never saw a situation where we denied 
people the opportunity to purchase food and medical supplies. 
To take this virtually unprecedented step with a country just 
90 miles from our shores is certainly, at the present time, 
wholly unwarranted.
    My concerns and those of my co-chairman of Americans for 
Humanitarian Trade, former Congressman Sam Gibbons, are not 
just based on philosophical grounds. Earlier this year we 
traveled together to Cuba. We met with the physicians in a 
children's hospital in Havana. We learned that the hospital has 
hundreds of emergencies each week--the majority of the cases 
involve children with asthma. The tragedy is that medication is 
readily available in the United States that can virtually 
eliminate the life threatening symptoms of asthma. However, the 
hospitals medical staff cannot get a reliable supply of the 
medications. Often, when they are available, they come at 
highly inflated prices through third countries.
    At this same hospital we visited the ward where the 
premature infants are cared for. While there are modern 
incubators in the ward to care for these most vulnerable of 
infants, nearly half of the units are being cannibalized to 
keep the rest of the equipment working since spare parts are 
difficult to acquire.
    I also was told of situations where Cubans awaiting heart 
surgery to receive a pacemaker had their surgeries postponed 
when American companies acquired the foreign manufacturer of 
the pacemaker and the life sustaining pacemaker and service 
arrangements were terminated with Cuba by the ``new owner,'' an 
American company.
    Since Americans for Humanitarian Trade with Cuba was 
launched, I have been encouraged by the wide support from a 
variety of people. Still, some people object, saying that Cuba 
only has Castro to blame for these conditions. We don't 
disagree, but putting children at risk in Cuba hardly seems to 
be a policy acceptable to Americans.
    Some people suggest that humanitarian aid, not trade, is 
the desirable alternative. If we recognize the need for aid, 
why object to engaging in trade?
    This view is supported by all major humanitarian aid groups 
currently sending donations to Cuba, such as Catholic Relief 
Services and Global Links of Philadelphia, all of whom support 
the sales of food and medicine. And, it is pointed out that 
companies can trade in medical supplies with permission from 
the State Department. However, this is at best an inefficient 
means of meeting the demands of 11 million people. But the 
reality is as described in the recent report by the 
Congressional Research Service finding that there really have 
been no significant sales to Cuba since the passage of the 
Cuban Democracy Act in 1992.
    The passage of legislation allowing Americans to engage in 
the trade of food and medical supplies with Cuba, would show 
the Cuban people our humanity. Why not show the Cuban people we 
do care for those in their society who are most vulnerable. 
Maybe, just maybe, this may be the greatest challenge we could 
offer Fidel Castro.
    Thank you for the opportunity to share my views.
      

                                


    Chairman Crane. Thank you, Mr. Fuller.
    Brad.

  STATEMENT OF W. BRADFORD GARY, MEMBER, BOARD OF DIRECTORS, 
            MEDICAL DEVICE MANUFACTURERS ASSOCIATION

    Mr. Gary. Mr. Chairman, Mr. Rangel, my name is Brad Gary. I 
appear before you this afternoon as a member of the board of 
directors of the Medical Device Manufacturers Association. 
Joining me here is Steve Northrup, our executive director.
    MDMA is a national trade association created in 1992 by a 
group of medical device company executives who believed that 
the innovators and entrepreneurs in the medical device industry 
did not have a distinct voice in Washington. The smaller 
companies in our industry, 80 percent of which have fewer than 
50 employees, are the companies that oftentimes develop the 
most significant breakthroughs in medical device technology.
    Our domestic medical device industry is the world leader in 
advanced medical technology. We produced equipment worth $65 
billion in 1997. Of that, we exported nearly 14 billion 
dollars' worth of medical products and supplies to other 
countries. The largest companies in our industry have overseas 
manufacturing plants and international distribution networks. 
This enables those companies to do business with hospitals and 
health professionals worldwide.
    On the other hand, there are smaller companies, less than 
$10 million in annual sales, that do not have the resources to 
compete on a global scale with these international 
conglomerates. Therefore, the possibility of expanded trade 
with Cuba, a nation of 11 million citizens just 90 miles 
offshore, intrigues the smaller companies of our industry.
    On behalf of our association, I joined a delegation of 
business executives in March; we visited Cuba; met with a 
number of Ministers of Health and the Government Central 
Procurement Agency of MediCuba. This is the bureau that's 
actually responsible for acquiring medical products for 
hospitals, clinics, and physicians. Now, as you've heard from 
several witnesses today, Cuban health care facilities face a 
shortage of medical equipment and supplies. Although in our 
judgment, Cuban physicians are well trained by any 
international standard, they do not have the modern medical 
equipment and supplies necessary to treat effectively many 
disease states. Although the European equipment we saw in Cuba 
appeared to be of recent vintage, the U.S. medical equipment 
that we saw dated back to the fifties; truly museum quality. 
Cuban health care professionals are often forced to reuse 
common medical supplies, believe it or not, including surgical 
instruments and surgical gloves.
    With few exceptions, the vast majority of Cuban people have 
not benefited, in our view, from the last four decades of 
American advances in therapeutic and diagnostic products. 
Although the Cuban Democracy Act of 1992 does permit export of 
medical products to Cuba, the act's requirements for special 
export licenses and the onsite verification of product use have 
essentially rendered this permission meaningless. In addition, 
the provision of the act that extended general prohibition on 
trade with Cuba to offshore subsidiaries of U.S. firms has 
given foreign firms--and by foreign firms, I mean especially 
European companies--a significant advantage in this important 
regional market. With regard to medical technology, our current 
trade policies toward Cuba are confused, contradictory, and 
hurt U.S. business interests in the region.
    Now, our association commends President Clinton and the 
administration for announcing last month they will develop 
procedures to simplify and expedite licenses for the sale of 
medicines and medical equipment to Cuba. We eagerly await the 
details from the Department of Commerce and the Bureau of 
Export Administration. We hope that the process will be both 
simple and transparent for our members, most of which I have 
mentioned are truly small companies that do not have the 
resources to hire lawyers and lobbyists to press their cases in 
the halls of Congress or the Department of Commerce.
    We recently tested the BXA system, and our conclusion is 
that the bureau needs to adopt a more user-friendly approach to 
smaller U.S. medical exporters. We called BXA and asked if a 
certain general class of product could receive an export 
license. We were told by BXA that we had to submit a full 
application before BXA could judge whether the product was 
eligible for licensure. The BXA staff either could not or would 
not judge the probable export status of the particular class of 
medical products. As the Department of Commerce and BXA develop 
guidelines for expedited licensure, MDMA encourages Commerce 
and BXA to produce a clear outline of the requirements and 
restrictions on trade with Cuba. BXA should establish telephone 
contact numbers that will provide small business with real-time 
guidance on export licensure for this market.
    In concluding our testimony, I want to suggest that U.S. 
trade with Cuba may also spark the struggling economies of the 
Commonwealth of Puerto Rico and the independent countries 
throughout the Caribbean, a matter to which this Subcommittee 
has devoted substantial attention. The Subcommittee knows well 
the economic difficulties in the Antilles region, particularly 
in the Dominican Republic, Haiti, and Jamaica.
    Puerto Rico, for example, is facing an economic slowdown 
with the phaseout and eventual termination of section 936, a 
tax incentive often reviewed by this Committee. We have high 
unemployment in Puerto Rico, over 20 percent in the west of the 
island. The Puerto Rico ``Twin Plant'' proposal, so 
thoughtfully crafted by this Committee a number of years ago, 
unfortunately has fallen short of our hopes and expectations 
for a true regional linkage.
    A limited medical market opening in Cuba might begin a 
positive, new economic force in the Caribbean region. At least, 
we should all analyze how a medical market opening will 
advantage our citizens and medical manufacturing capacity in 
Puerto Rico where we have so many medical products plants that 
are running at half capacity. Perhaps, the day will come when 
products manufactured in San Juan or Armagueros will make the 
short trip across the Windward Passage to the new medical 
market of Cuba.
    Relaxation of the trade embargo against Cuba, a country 
with a population about the same as the State of Illinois, 
would truly encourage the renewal of the Puerto Rican economy. 
The effects of a revitalized Puerto Rico, in turn, could ripple 
through the economies of the Caribbean neighbors to the benefit 
of all.
    On behalf of the Medical Device Manufacturers Association, 
I thank you for the opportunity to testify on our support for 
relaxing the restrictions on trade of medical technology.
    Thank you, Mr. Chairman, Mr. Rangel.
    [The prepared statement follows:]

Statement of W. Bradford Gary, Member, Board of Directors, Medical 
Device Manufacturers Association

    Good afternoon, Mr. Chairman and members of the 
subcommittee, and thank you for the opportunity to testify on 
behalf of the Medical Device Manufacturers Association (MDMA) 
at today's hearing on U.S. economic and trade policy toward 
Cuba. I am Bradford Gary, a member of the board of directors of 
MDMA. I am also a member of the Potomac Research Group and a 
trustee of Caribbean Latin American Action. Joining me at the 
witness table is Stephen Northrup, executive director of MDMA.
    I appear before you today to represent the views of the 130 
members of MDMA. MDMA is a national trade association that was 
created in 1992 by a group of medical device company executives 
who believed that the innovators and entrepreneurs in the 
medical device industry needed a distinct voice in Washington. 
As you may know, the smaller companies in this industry, 80 
percent of which have fewer than 50 employees, develop most of 
the significant breakthroughs in device technology. MDMA works 
to improve the quality of patient care by advocating policies 
that foster an environment in which these innovative companies 
can flourish and grow.
    Our domestic medical device industry is the world leader in 
advanced medical technology, producing equipment worth $65 
billion in 1997 and exporting nearly $14 billion worth of 
medical products and supplies to other countries. The largest 
companies in the industry have overseas manufacturing plants 
and international distribution networks that enable these 
companies to do business with hospitals and health 
professionals worldwide. On the other hand, MDMA member 
companies, the majority of which have less than $10 million in 
annual sales, do not have the same resources to compete on a 
global scale with these international conglomerates. Therefore, 
the possibility of expanded trade with Cuba, a nation of 11 
million citizens just 40 miles from the shores of Florida, 
intrigues the smaller companies in our industry.
    On behalf of MDMA, I joined a delegation of business 
executives who were invited by the Cuban government to visit 
Cuba and meet with President Fidel Castro and his top 
ministers. During our visit, we toured Cuban health care 
facilities and met with officials of the Ministry of Health and 
of MediCuba, the government bureau responsible for acquiring 
medical products for Cuban hospitals, clinics, and physicians.
    We found that Cuban health care facilities face a severe 
shortage of medical equipment and supplies. Although Cuban 
physicians are well trained by international standards, they do 
not have the modern medical equipment and supplies necessary to 
treat effectively many diseases and conditions. Although the 
European equipment we saw on our tour seemed to be of recent 
vintage, the U.S. medical equipment dated back to the 1950s. 
Cuban health professionals are forced to re-use common medical 
supplies, including surgical gloves. With a few exceptions, the 
vast majority of the Cuban people have not benefited from the 
last four decades of American advances in therapeutic and 
diagnostic products.
    Although the Cuban Democracy Act of 1992 permits exports of 
medical products to Cuba, the Act's requirements for special 
export licenses and the onsite verification of the products' 
use have essentially rendered this permission meaningless. In 
addition, the provision of the Act that extended the general 
prohibitions on trade with Cuba to offshore subsidiaries of 
U.S. firms has given foreign firms--primarily European 
companies--a significant advantage in this important regional 
market. With regard to medical technology, our current trade 
policies toward Cuba are confused and contradictory, which 
hurts U.S. business interests in the region.
    MDMA commends President Clinton for announcing last month 
that his administration will develop procedures to simplify and 
expedite licenses for the sale of medicines and medical 
equipment to Cuba. We eagerly await the details from the 
Department of Commerce and its Bureau of Export Administration 
(BXA).
    We hope that the process will be both simple and 
transparent for MDMA members, most of which, as I have 
mentioned, are small companies without the resources to hire 
lawyers and lobbyists to press their cases in the halls of 
Congress or the federal bureaucracies. Our recent ``test'' of 
the BXA system, however, suggests that the bureau needs to 
adopt a more ``user-friendly'' approach to smaller U.S. 
exporters.
    We recently called BXA and asked if a certain general class 
of product could receive an export license. We were told by BXA 
that we had to submit a full application before BXA could judge 
whether the product was eligible for licensure. The BXA staff 
either could not or would not judge the probable export status 
of this particular class of medical products.
    As the Department of Commerce and the BXA develop 
guidelines for an expedited licensure process for trade with 
Cuba, MDMA encourages Commerce and BXA to produce a clear 
outline of the requirements and restrictions on trade with 
Cuba. Commerce and BXA should also establish telephone contacts 
that will provide small businesses with ``real-time'' guidance 
on export licensure for this market.
    In concluding our testimony, I want to suggest that U.S. 
trade with Cuba may also serve to spark the struggling 
economies of the commonwealth of Puerto Rico and the 
independent countries throughout the Caribbean. This 
subcommittee knows well the economic difficulties in the 
Antilles region, particularly in the Dominican Republic, Haiti, 
and Jamaica. Puerto Rico is facing high unemployment and an 
economic slowdown that is exacerbated by the phase-out and 
termination of the Section 936 tax incentive for businesses 
with manufacturing facilities on the island.
    The relaxation of the trade embargo against Cuba, a country 
with a population nearly equal to that of Illinois, could 
encourage the renewal of the Puerto Rican economy. The effects 
of a revitalized Puerto Rico, in turn, could ripple through the 
economies of its Caribbean neighbors, to the benefit of both 
the Caribbean people and U.S. business.
    On behalf of the Medical Device Manufacturers Association, 
I thank you for this opportunity to testify to our support for 
a relaxation of the restrictions on trade of medical 
technology, equipment and supplies with Cuba. We also commend 
you, Mr. Chairman, and your subcommittee for engaging in this 
thoughtful reconsideration of U.S. trade policy and its effects 
on both the Cuban people and U.S. business. I would be pleased 
to answer any questions you might have.
      

                                


    Chairman Crane. Thank you, Brad.
    Now, correct me if I'm mispronouncing it, Gerdes?
    Mr. Gerdes. Gerdes is correct.
    Chairman Crane. Gerdes. All right, Mr. Gerdes.

   STATEMENT OF DAN GERDES, CHAIRMAN, U.S. WHEAT ASSOCIATES, 
                    NEMAHA COUNTY, NEBRASKA

    Mr. Gerdes. Mr. Chairman and Members of the Subcommittee, 
I, too, want to thank you for the opportunity to appear today. 
My name is Dan Gerdes, and I am a farmer. I operate a grain and 
livestock farm in southeast Nebraska where I farm 1,400 acres 
of wheat, corn, and soybeans. I also am the current chairman of 
the U.S. Wheat Associates, an organization that works to 
develop export markets on behalf of U.S. wheat farmers.
    U.S. agriculture exports produce a large, favorable trade 
balance to the U.S. economy. In fiscal year 1997, the United 
States exported nearly $60 billion of agriculture goods which 
not only benefited agriculture producers but also the rest of 
the U.S. economy. Each year, the U.S. exports about half of the 
wheat grown in this country making the export market imperative 
for U.S. wheat farmers. Among the largest barriers to trade 
U.S. wheat farmers face today are the economic trade sanctions 
imposed by our government including that with Cuba which shuts 
U.S. wheat producers out of a strong potential market right in 
our own backyard.
    According to the President's Export Council Report of 
January 1997, the United States maintains sanctions on 75 
countries representing roughly 52 percent of the world's 
population. Unfortunately, these sanctions are proliferating. 
The United States has imposed sanctions for foreign policy 
purposes 100 times since World War II, and more than 60 of 
these have been imposed since 1993 at a time when the United 
States and the rest of the world have been touting a freer 
trading environment.
    Several growing markets are closed to U.S. commercial wheat 
exports including Cuba, Iran, Libya, and North Korea. Wheat 
imports by these countries are expected to reach well over 7 
million tons in the market year 1997/1998 representing 7 
percent of our global wheat market. Adding Iraq--where our 
wheat is currently allowed only through the Oil for Food 
Program--to this list results in shutting the United States out 
of nearly 11 percent of the world wheat market, the largest 
percentage of global trade from which the United States has 
restricted itself since the 1980 wheat embargo with the Soviet 
Union.
    Not only do sanctions keep wheat farmers out of important 
markets, but they also allow competitors to charge higher 
prices in these markets. They then use these higher margins to 
undercut us in other markets making it difficult for the United 
States to compete in countries even where we can freely trade.
    Our steady customers also begin to wonder anew whether they 
can rely on the United States as a reliable supplier of their 
food needs. Cuba which has no commercial wheat production 
expects the import of approximately 900,000 tons of wheat in 
the 1997/1998 year, primarily from the EU, Canada, and 
Argentina. This figure would likely be up to 1.5 tons if Cuba 
did not ration bread. By conservative estimates in the last 10 
years alone, the United States lost out on wheat sales to Cuba 
of 3.5 million tons, valued at well over $500 million, and this 
is the real conservative estimate. Our exports could well have 
been much higher due to the tremendous freight advantage the 
United States has with Cuba.
    The sanctions have been a disaster for U.S. wheat and for 
other agriculture exports while providing Castro with a ready 
excuse and a scapegoat for Cuba's economic problems. It is time 
to take another look at our Nation's flawed and failed 
unilateral sanctions policy. We understand the State Department 
is undertaking a review of U.S. sanctions policy and its value 
versus its cost. We would welcome a national dialog on the 
sanctions policy and its limits. We urge the administration to 
include plans for an automatic review of existing sanctions and 
their impact; a sunset clause for existing and future 
sanctions, and an annual report along the lines of the National 
Trade Estimates Report which outlines the cost of sanctions to 
the U.S. economy.
    Wheat producers are as patriotic as any other Americans, 
but we do not want to needlessly sacrifice the opportunity to 
export our product. Time after time, our producers have been 
denied access to an export market, and the competition has 
stepped in to fill the gap. The embargo has not kept Cuba from 
the world marketplace. It has simply turned what logically 
should be a U.S. market over to the Canadians, the Europeans, 
and the Argentines. The denial of U.S. food exports has never 
changed a single country's behavior. Cuba is a perfect example 
of this reality.
    In summary, history has shown us that the unilateral trade 
sanctions uniformly failed to achieve the desired results and 
instead hurt American businesses and farmers. For U.S. wheat 
farmers, the U.S. trade embargo with Cuba has meant hundreds of 
millions of dollars in lost sales opportunities. Meanwhile, 
Castro remains in place, our long-term embargo having done 
nothing to help a truly elected Cuban Government to come to 
power.
    Thank you.
    [The prepared statement follows:]

Statement of Dan Gerdes, Chairman, U.S. Wheat Associates, Nemaha 
County, Nebraska

    Thank you for the opportunity to appear before the 
subcommittee today to speak about U.S. economic and trade 
policy toward Cuba. My name is Dan Gerdes, and I am a wheat 
farmer from Nebraska. I operate a grain and livestock farm in 
southeast Nebraska in Nemaha county, where I farm 1,400 acres 
of wheat, corn and soybeans. I also am the current chairman of 
U.S. Wheat Associates, an organization that works to develop 
export markets on behalf of U.S. wheat farmers.
    The U.S. exports a substantial variety and volume of 
agricultural products, and our agricultural exports produce a 
large favorable trade balance to the U.S. economy. In fiscal 
year 1997, the U.S. exported nearly $60 billion of agricultural 
goods, which not only benefited agricultural producers, but 
also the rest of the U.S. economy. Each year, the U.S. exports 
about half of the wheat grown in this country, making the 
export market imperative for U.S. wheat farmers.
    U.S. wheat producers face a variety of trade obstacles in 
the international marketplace. Changes in U.S. legislation and 
in the world marketplace in recent years, including agreements 
among trading nations to reduce export subsidies and eliminate 
trade barriers, have helped to reduce some of these obstacles. 
Given this environment, it is surprising and disturbing that 
among the largest barriers to trade U.S. wheat farmers face 
today are the economic trade sanctions imposed by our own 
government, including that with Cuba, which shuts U.S. wheat 
producers out of a strong potential market right in our own 
backyard.
    According to the President's Export Council Report of 
January 1997, the U.S. maintains sanctions on 75 countries 
representing 52 percent of the worlds population. 
Unfortunately, these sanctions are proliferating. The U.S. has 
imposed sanctions for foreign policy purposes 100 times since 
World War II, and more than 60 of these sanctions have been 
imposed since 1993, at a time when the U.S. and the rest of the 
world have been touting a freer trading environment. With this 
proliferation, there is an equally strong sense that the U.S. 
economic costs of sanctions are significant. This is 
particularly true for wheat producers.
    While the global import demand for wheat is expected to 
increase in 1997/98, U.S. export prospects have not improved by 
a commensurate amount because several growing markets are 
closed to commercial wheat exports, including Cuba, Iran, Libya 
and North Korea. Wheat imports by these countries are expected 
to reach 7.15 million tons in marketing year 1997/98, 
representing seven percent of the global wheat market. Adding 
Iraq, where our wheat is currently allowed only through the Oil 
for Food Program, to this list results in shutting the U.S. out 
of nearly 11 percent of the world wheat market, representing 
the largest percentage of global trade from which the U.S. has 
been restricted due to self-imposed trade restrictions since 
the 1980 wheat embargo with the Soviet Union. Not only do 
sanctions keep wheat farmers out of important markets, but they 
also allow our competitors to charge higher prices in these 
markets, using those higher margins to undercut us in other 
markets, making it difficult for the U.S. to compete in 
countries even where we can freely trade. Our steady customers 
also begin to wonder anew whether they can rely on the United 
States to be a reliable supplier of their food needs.
    Cuba, which has no commercial wheat production, expects to 
import approximately 900,000 tons of wheat in 1997-98, 
primarily from the European Union, Canada and Argentina. This 
figure would likely be higher, up to 1.5 million tons, if Cuba 
did not ration bread, which it does due to a shortage of cash 
to pay for wheat imports.
    Although the U.S. embargo with Cuba prohibits commercial 
food sales, it does allow for some limited donations for 
humanitarian reasons. In February of this year, U.S. Wheat 
Associates and the Kansas Wheat Commission donated 22,000 
pounds of flour through a division of a Catholic Church 
humanitarian relief organization. The donated wheat flour was 
used for a variety of charitable purposes, including making 
bread for residents of a retirement home.
    This relatively small donation is a drop in the bucket 
compared to the amount of wheat the U.S. could have sold to 
Cuba had the embargo not been in place. Estimating exact sales 
amounts is somewhat difficult. However, by conservative 
estimates in the last 10 years alone the U.S. lost out on wheat 
sales to Cuba of 3.5 million tons, valued at more than $500 
million dollars. Our exports could well have been higher due to 
the tremendous freight advantage the U.S. has with Cuba.
    Of course, none of these sales have been realized due to 
the continued trade embargo with Cuba, an embargo that was 
designed to try to bring about changes in Communist Cuba. 
Instead, Fidel Castro has ruled the country for nearly 40 
years. Meanwhile, the sanctions have been a disaster for U.S. 
wheat and other agricultural exports, while providing Castro 
with a ready excuse and scapegoat for Cubas economic problems.
    It is our understanding that the State Department is 
undertaking a review of U.S. sanctions policy and its value 
versus its costs. We have not seen any results of this 
analysis, but we welcome a national dialog on unilateral 
sanctions policy and its limits. We urge the administration to 
include plans in its sanctions analysis for an automatic review 
of existing sanctions and their impact, a sunset clause for 
existing and future sanctions, and an annual report along the 
lines of the National Trade Estimates Report, which outlines 
the costs to the U.S. economy of sanctions against certain 
countries.
    Mr. Chairman, the Pope's recent visit to Cuba provides the 
opportunity and impetus to take another look at our Nation's 
flawed and failed unilateral sanctions policy.
    Wheat producers are as patriotic as any other Americans, 
but we do not want to needlessly sacrifice the opportunity to 
export our product. Time after time our producers have been 
denied access to an export market, and the competition has 
stepped in to fill the gap. The embargo has not kept Cuba from 
the world marketplace; it has simply turned what logically 
should be a U.S. market over to the Canadians, the Europeans, 
the Argentines and the Aussies. The denial of U.S. wheat 
exports has not changed a single countrys behavior, and Cuba is 
a perfect example of this reality.
[GRAPHIC] [TIFF OMITTED] T5762.012

    In summary, history has shown us that unilateral trade 
sanctions uniformly fail to achieve the desired results, and 
instead hurt American businesses and farmers. For U.S. wheat 
farmers, the U.S. trade embargo with Cuba has meant hundreds of 
millions of dollars in lost sales, and also has hurt our 
ability to compete in other markets. Meanwhile, Castro remains 
in power, our long-term embargo having done nothing to help a 
freely-elected Cuban government come to power.
    I appreciate the opportunity to address you today, and 
would be happy to answer any questions.
      

                                


[GRAPHIC] [TIFF OMITTED] T5762.013

      

                                


    Chairman Crane. Thank you. How can we ensure that if U.S. 
policies change to allow the sale of food and medicine to Cuba 
without license from the U.S. Government, that it would not be 
intercepted by Castro and used for his own purposes by being 
sold or made available only to Communist Party elites and 
foreign visitors? Anyone?
    Mr. Fuller. I'll take one crack at it. I think that's a 
very valid question. I guess when you go there and you see the 
commitment of the state-owned enterprises to providing health 
care to 11 million people on an island that's as long as 
California, you come away with the feeling that if they had the 
medical supplies and equipment and spare parts that we talked 
about, they would use them on behalf of their own people.
    I don't know that you can make the decision on whether 
lifting the embargo of food and medical supplies has to require 
an assurance as to how Castro and his government would use 
this. We do not make that requirement of Saddam Hussein and we 
do some $700 million of trade with Iraq in food. I think the 
issue is to change a policy that is unprecedented, in my own 
view, inhumane; provide food and medical supplies for sale, and 
if the behavior is such after a period of time that we feel 
it's not warranted to continue it, change the policy, but I 
think withholding it is so unprecedented as a means of 
conducting foreign policy that it is time, after 38 or 39 
years, to invest in a slightly different approach.
    Chairman Crane. So, if U.S. policies change to lift the 
embargo on the commercial sales of food and lift the 
restrictions on the sale of medicine and medical products, to 
what extent do Cubans have the resources to purchase these 
products?
    Mr. Fuller. Mr. Chairman, I may not be the most experienced 
in this area, but my travels for 4 or 5 days, along with Sam 
Gibbons for some of that time, to a children's hospital; to 
medical clinics; talking to the Minister of Health, convinced 
me that the commitment on the part of the Cuban system is to 
provide free medical care to people whether they're in Havana; 
whether they're in the mountains; whether they're in the 
tourist areas, and while it's quite evident that there are ways 
for people to purchase--there always will be; those who can 
afford to pay some amount of money will get access to certain 
kinds of products--it would be the Cuban state system that 
would purchase the medical supplies and the food and make that 
available to the Cuban people. Again, I think that's something 
you'd have to monitor closely. Others here have had more 
experience with that.
    Mr. Quigley. Mr. Chairman, if I could go back to the 
previous question, I agree with Craig that it's a good one, and 
there is no way of assuring that absolutely nothing gets 
diverted to either military uses or health tourism or those 
other things that are said to be the major beneficiaries of aid 
coming in. But at least from the experience of the humanitarian 
aid that has been given specifically to Caritas through 
international church organizations around the world, 
particularly Catholic Relief Services here in this country, 
that has been fully monitored. There is not only end-use 
monitoring but monitoring all the way through; not to the last 
pill going down somebody's gullet, that's impossible, but there 
is assurance that all of the medicines and medical equipment 
that has been given, designated for this particular clinic or 
that hospital, has, indeed, gone to those places. And it's 100 
percent; not this myth that seems to be abroad about 80 percent 
being siphoned off by the government. In the case of the 
humanitarian aid provided to Caritas, 100 percent goes to the 
designated recipient.
    Mr. Fuller. If I might just make a quick followup, before 
the restrictions were put in place by the Cuban Democracy Act 
in 1992, Cuba did purchase some $720 million, almost three-
quarters of a billion dollars, from the United States; most of 
that, 90 percent of that, had to do with food and medical 
supplies, and I think it's important to think about the order 
of magnitude. We've heard from people who have a different view 
than those of us here. When they added up everything they could 
add up over 6 years, they said it amounted to $2 billion of 
humanitarian aid. Well, I think if you do the math, it's less 
than $2 a person of the 11 million per month over the 6 years. 
I think what we're suggesting is not that we stop humanitarian 
aid; the fact is the people that are providing the humanitarian 
aid and distributing it are supporting this legislation that 
would allow the sale of food and medical supplies. I think what 
we have to do is step up the order of magnitude several times 
in order to make sure we are reaching the Cuban people with the 
food and medical supplies they need.
    Ms. Wilhelm. Mr. Chairman, if I may continue along those 
lines. If, by lifting food and medicine, the Cuban people do 
not get access to food and medicine and if they are not able to 
buy because of the disastrous economic situation facing the 
country, I think you bring forward to the world the failures of 
the Castro government and prevent them from continuing the 
excuse of the embargo as the reason for all their failures. I 
think it is in the best interests of the United States.
    Chairman Crane. Good point.
    Mr. Rangel.
    Mr. Rangel. Thank you, Mr. Chairman. Mr. Fuller, 
notwithstanding the high positions that you held in the 
executive branches of government recently, I gather that you 
didn't have too much input in our foreign policy, especially as 
it relates to Cuba.
    Mr. Fuller. I think that's fair. My job was, in the first 4 
years of the administration, the Assistant for Cabinet Affairs, 
although we did discuss Caribbean Basin Initiatives and various 
trade issues there; second 4 years was as Chief of Staff to 
Vice President Bush, but my principal responsibility was not 
related to the conduct of foreign policy as it pertains to 
Cuba.
    I might also add that during the time, of course, the 
Soviet Union had not yet fallen, so the circumstances were 
quite different than what we have now.
    Mr. Rangel. I have followed this policy since I've been in 
Congress, and I have convinced myself that the embargo has been 
based more on Floridian domestic politics than trade and 
foreign policy. What are your impressions?
    Mr. Fuller. Well, Mr. Rangel, I was involved in politics, 
and I have been to Florida a number of times on behalf of 
people seeking the Presidency, and I have had the chance to 
meet a great many Floridians, most recently, was the short 
Presidential campaign of Governor Pete Wilson in Florida where 
we met with Cuban-Americans and heard their vehement objection 
to some of the kinds of things we've discussed here. My 
impression--and I'm sorry Mr. Shaw's not here to share with 
him--I think about a third of our executive committee on this 
coalition are Cuban-Americans. Some 20,000--as I think you were 
told earlier--Cuban-Americans have signed petitions supporting 
this legislation. As you also heard earlier by some other 
witnesses, the dissidents in Cuba, so-called dissidents, 
support this legislation. I fully respect the Chairman's 
comments about the efforts that were made to bring as many 
people together here, and I commend you for that. I think that 
we're seeing a change in Florida, a political change. I think 
Cuban-Americans of all generations, particularly the younger 
generation, are beginning to ask what this policy has 
accomplished and achieved, and why are we forced to adhere to 
it?
    Mr. Rangel. But you would agree that Miami had more 
influence on us than Havana.
    Mr. Fuller. I think that's fair.
    Mr. Rangel. And was Bernie Aaronson the Assistant Secretary 
of State when you were there?
    Mr. Fuller. During some of the time, yes.
    Mr. Rangel. Would you believe he asked me to support the 
administration in fighting Torricelli on the floor?
    Mr. Fuller. Well, this is an unusual issue, I guess, in 
that regard.
    Mr. Rangel. And then candidate Clinton changed his mind and 
supported Torricelli in Miami, and then all of a sudden Bush 
supported Torricelli in Washington; strange. But, anyway--who's 
the cochair of your group, because I was so proud to be with 
them when they had their press conference with General Shannon 
and Sam Gibbons and so many outstanding Americans, nuns and 
priests? Who cochairs this group?
    Mr. Fuller. It is former Congressman Sam Gibbons from 
Florida.
    Mr. Rangel. He's the cochair?
    Mr. Fuller. Yes.
    Mr. Rangel. And are you based in Washington?
    Mr. Fuller. We are based in Washington, yes. And, actually, 
supported and housed in the U.S. Chamber of Commerce.
    Mr. Rangel. Where?
    Mr. Fuller. The U.S. Chamber of Commerce.
    Mr. Rangel. Very good. Ms. Wilhelm, what group was that? 
The Cuban-American----
    Ms. Wilhelm. Cuban Committee for Democracy.
    Mr. Rangel. No, no, no, no, no, no, no, no, no. It was a 
group that Jorge MasConosa headed when he was alive, the Cuban-
American----
    Ms. Wilhelm. National Foundation.
    Mr. Rangel. National Foundation. Since he's left us, is 
that foundation as strong politically, in your opinion, in 
Miami as it was before?
    Ms. Wilhelm. Well, Jorge MasConosa was an incredible 
leader, and when he died he left an incredible vacuum as most 
incredible leaders do, and no, I would say that the foundation 
is nowhere as powerful and as noticeable as they were in the 
past.
    Mr. Rangel. It seemed like every time he visited the White 
House for a matter with the President, the embargo became 
stronger. I don't know what message he brought from Miami, but 
he was a very influential man.
    Ms. Wilhelm. He obviously brought a very convincing 
message.
    Mr. Rangel. And whoever was in office, it seemed like they 
could almost depend on political support coming out of Miami.
    Ms. Wilhelm. Could you repeat the question, I'm sorry.
    Mr. Rangel. I said, no matter who the President was, after 
a visit with Jorge MasConosa, it would seem like they could 
always depend on the Cuban-American National Foundation for 
strong political support.
    Ms. Wilhelm. I'm sure they could.
    Mr. Rangel. Mr. Quigley, you're counsel to my church, so 
maybe I won't get involved in any sinful trouble, because you 
can't pray against me like Cardinal O'Connor can, so----
    Mr. Quigley. But he could absolve you and I can't. 
[Laughter.]
    Mr. Rangel. Yes, well, I'm waiting for that day to come, 
but I tell you, having been with him in Cuba with the Pope and 
seeing the excitement of the Roman Catholic Church from bishops 
and priests and nuns, I don't think in life I will see anything 
closer to a religious crusade where people who, whether they 
were Catholic or Protestant or nonbelievers, because even the 
Communist driver that we had said that he believed in something 
he couldn't describe, were just taken up by what has happened. 
I always knew that the National Council of Bishops had that 
position against the embargo, and the Catholic Conference would 
have that position, and I suspected that Cardinal O'Connor did, 
and then it became abundantly clear that His Holiness had 
spoken on this issue. How does that work in the local parish et 
al.? How does that message ever get down there, because we get 
quite a few political messages on a variety of legislative and 
foreign policy subjects here from our priest, and they are 
welcome, but on this, I just didn't know, after the Pope 
speaks--I know when the National Council of Bishops speaks, 
that doesn't necessarily speak for the church locally, right?
    Mr. Quigley. It speaks for the bishops, and the bishops are 
the basic teachers in the church, but not every Catholic, 
obviously, follows everything that the bishops say. When 
Archbishop McCarrick, for example, current chairman of the 
Committee for International Policy, issues a statement for the 
conference, he is representing the entire Episcopal Conference; 
that is to say, the bishops' structure. How it gets translated 
to the local parish is with great difficulty. As you well know, 
there's no simple button to push to help things get down there, 
so it's a question of a lot of effort to communicate in various 
ways: Through the media, and so forth. Rarely, though, will one 
hear a homily during the Sunday Mass on a foreign policy issue. 
That just isn't the function of the homily in Catholic worship. 
So, it's a matter of just simply trying to affect public 
opinion wherever one can.
    Mr. Rangel. But when the Cardinal speaks, isn't that more a 
mandate to the local priests whether we deal with Haiti's 
foreign policy, as opposed to when the National Council of 
Catholic Bishops speaks? Would not the Cardinal's message be 
more of a mandate?
    Mr. Quigley. I don't know about a mandate, Mr. Rangel. The 
Cardinal, Cardinal O'Connor speaks for the Archdiocese of New 
York, and he is----
    Mr. Rangel. I meant for the priests within the archdiocese.
    Mr. Quigley. Within the archdiocese but also the bishop of 
a much smaller, less important diocese speaks similarly for 
that diocese. Obviously, Cardinal O'Connor, Cardinal Law, and 
other very prominent churchpersons have a higher visibility, 
and so their voices may carry much further than that of other 
local bishops. But at all times, mentioning those two 
distinguished prelates, there has been a consistent coherence 
with the policy of the Bishop's Conference, especially on the 
Cuba issue, as on other issues as well. Cardinal O'Connor was 
formerly chairman of the same committee that Archbishop 
McCarrick presently chairs.
    Mr. Rangel. Well, we rely heavily on the thoughts of the 
National Council of Bishops and, of course, on old, moral, and 
social grounds, the nuns really have provided a lot of 
leadership for the church historically, and they seem even to 
be more excited about this issue. Today was a great day for all 
of us that had the privilege to have been with the Pope and the 
Cardinal, and we thank you for the great work that you've done, 
and we just have to continue to fight, and maybe after 
November, we'll be able to take another look at this.
    Thank you.
    Chairman Crane. And I want to thank all of you witnesses 
for your testimony. We appreciate it. And that concludes this 
panel, and, now, I would like to invite up our final panel for 
the day: Hon. William Paparian, city council member, Pasadena, 
California; David Cibrian, partner, Jenkens & Gilchrist; Philip 
Peters, senior fellow, Alexis de Tocqueville Institution, and 
Ernest Preeg, William M. Scholl Chair in International 
Business, Center for Strategic and International Studies.
    All right. We will proceed in the order I introduced you.
    Mr. Paparian.

    STATEMENT OF HON. WILLIAM M. PAPARIAN, COUNCIL MEMBER, 
                      PASADENA, CALIFORNIA

    Mr. Paparian. Mr. Chairman, I am the immediate past mayor 
of Pasadena, California and a current council member. I've 
traveled to Cuba six times since July 1996, and I returned from 
my most recent trip on April 17. Most of these trips were for 
the purpose of coordinating the Cuba Relief Project of 
Operation USA, an 18-year-old international relief agency which 
was preparing the first of many shipments to Cuba of medical 
supplies and equipment. During my trips, I was provided with 
extensive briefings on the current status of humanitarian 
assistance from the United States to Cuba. In February, I 
toured the three pediatric hospitals in Havana which will be 
the recipients of the Operation USA shipments and met with 
their directors and medical staff.
    My comments today are not on behalf of the city of Pasadena 
nor on behalf of Operation USA but rather express the outrage 
of one American citizen over the use of food and medicine as an 
instrument of foreign policy. The embargo on Cuba is 
counterproductive and immoral. It's time to lift it. Solid 
medical studies, as you heard earlier today, that were released 
in 1997, demonstrate, clearly, that a health crisis is 
deepening in Cuba and explain how the U.S. embargo contributes 
to the situation.
    The religious community has long decried the embargo's 
effect on the health, welfare, and, indeed, the individual 
freedoms of Cubans, particularly, since the denial of food and 
medicine violates many of the international human rights 
covenants to which our country is a party. These groups have 
long contended that the embargo, which is an act under 
international norms considered one of war, exacerbates 
political oppression in Cuba by keeping the government in a 
constant national security alert.
    Now, opponents say, as you've heard, won't the Cuban 
Government just divert food and medicine to so-called medical 
tourism? How can we be sure that these goods will really get to 
the Cuban people? That argument is patently absurd. As long as 
the embargo on food and the de facto embargo on medicines is 
around, the finger of blame for the growing health crisis in 
Cuba will continue to point at the United States. If we sell 
food and medicine to Cuba and then the Cuban Government diverts 
those goods away from the Cuban people, then the Cuban 
Government, and not the United States, will deserve the blame. 
We cannot control what the Cuban Government does, but we can 
act with moral decency ourselves.
    The State Department says, ``What about all the 
humanitarian aid the United States sends, apparently more than 
any other country? Doesn't that show support for the Cuban 
people?'' Mr. Chairman, charity is no substitute for trade. I 
believe that life-sustaining U.S. goods, particularly patented 
U.S. medical products should be available for purchase to any 
country that needs them.
    The embargo on Cuba plays absolutely no foreign policy 
role. It is a relic of the cold war that reflects solely 
domestic policy concerns. For some years now, the embargo has 
been nothing but a political bone thrown to the most extremist 
factions of the Florida community. There can be no moral 
justification for this obsolete, misguided, and illegal policy 
that denies Cuban citizens basic needs.
    For our country to continue to deny this one group of 
people the food and medicines that are needed to sustain life 
achieves nothing. Forty years of the strongest embargo in our 
history has resulted in an increase in the suffering of the 
people of Cuba while making no change whatsoever in the 
political makeup of the Cuban Government. The American people 
can no longer support a policy carried out in our name which 
causes suffering of the most vulnerable: Women, children, and 
the elderly. That is why I support any and all efforts to lift 
the restrictions on the sale of food, medicines, and medical 
supplies to Cuba.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]
Statement of Hon. William M. Paparian, Council Member, Pasadena, 
California

    I am the immediate past Mayor of Pasadena, California and a 
current Councilmember. I have traveled to Cuba six times since 
July of 1996 and returned from my most recent trip on April 
17th. Most of these trips were for the purpose of coordinating 
the Cuba Relief Project of Operation U.S.A., an 18 year old 
international relief agency which is preparing the first of 
many shipments to Cuba of medical supplies and equipment.
    During my trips I was provided with extensive briefings on 
the current status of humanitarian assistance from the U.S. to 
Cuba in meetings with Enrique Commendario Hernandez, First 
Deputy Minister of the Cuban Health Ministry; Dagmar Gonzalez 
Grau, Director of Aid and Development Assistance for the Cuban 
Ministry of External Assistance and Economic Cooperation; and 
Dr. Noemi Gorrin Castellanos, Medical Coordinator of the Cuban 
Council of Churches who coordinates all Protestant churches' 
reception of medical aid.
    In February I toured the three pediatric hospitals in 
Havana which will be the recipients of the Operation U.S.A. 
shipments and met with their directors and medical staff. The 
three pediatric hospitals are Juan Manuel Marquez Pediatric 
Hospital; William Soler Provincial Teaching Pediatric Hospital; 
and Pediatric Teaching Hospital of Central Havana.
    The U.S. unilateral embargo on Cuba is counterproductive 
and immoral. It is time to lift the embargo against Cuba. As 
practiced, the U.S. unilateral embargo on Cuba contradicts our 
country's stated policy to ``support the Cuban people'' by 
denying them sales of U.S. produced food and medical supplies. 
Solid medical studies released in 1997 demonstrate that a 
health crisis is deepening in Cuba and explain how the U.S. 
embargo contributes to the situation.
    Americans who are aware of the crisis are calling for a 
change of policy in the spirit of the Pope's recent trip to 
Cuba. The Senate and Congress have recently responded to these 
calls by introducing bipartisan legislation allowing sales of 
U.S. produced food and medical products to Cuba.
    The U.S. embargo on Cuba has long concerned a variety of 
groups that approach the topic from different points of view. 
The humanitarian / religious community has long decried the 
U.S. unilateral embargo's effect on the health, welfare and, 
indeed, the individual freedoms of Cubans, particularly since 
the denial of food and medicine violates many of the 
international human rights covenants to which the U.S. is a 
party. These groups contend that the embargo, an act under 
international norms considered an act of war, exacerbates 
political oppression in Cuba by keeping the government in a 
national security alert. These views are supported by former 
political prisoners and dissidents in Cuba.
    Opponents say, won't the Cuban government just divert food 
and medicine to so-called medical tourism? How can we be sure 
these goods will really get to the Cuban people? That argument 
is patently absurd. As long as the embargo on food and de-facto 
embargo on medicines is around, the finger of blame for the 
growing health crisis in Cuba can point at the u.s. If the u.s. 
sells food and medicine to Cuba and the Cuban government 
diverts those basic goods away from the Cuban people, then the 
Cuban government and not the u.s. deserves the blame. We can't 
control what the Cuban government does, but we can act with 
moral decency ourselves.
    The State Department says: What about all the humanitarian 
aid the u.s. sends, apparently more than any other country. 
Doesn't that show support for the Cuban people?
    Charity is no substitute for trade. I believe that life 
sustaining u.s. goods, particularly patented U.S. medical 
products, should be available for purchase to any country that 
needs them.
    We must make it clear that the Cuban embargo plays 
absolutely no foreign policy role. It is an ossified relic of 
the cold war that reflects solely domestic policy concerns. For 
some years now the embargo has been nothing but a political 
bone thrown to the political right and to the most extremist 
factions of the Florida community. There can be no moral 
justification for this obsolete, misguided and illegal policy 
that denies Cuban citizens basic needs.
    For our country to continue to deny this one group of 
people the food and medicines that are needed to sustain life 
achieves nothing. Forty years of the strongest embargo in our 
history has resulted in an increase in suffering of the people 
of Cuba while making no change whatsoever in the political 
makeup of the Cuban government. We can no longer support a 
policy carried out in our name which causes suffering of the 
most vulnerable--women, children and the elderly. That is why I 
support any and all efforts to lift the restrictions on the 
sale of food, medicines and medical supplies to Cuba.
      

                                


    Chairman Crane. Thank you.
    Mr. Cibrian? Am I pronouncing that right?
    Mr. Cibrian. Yes, you are, Mr. Chairman.

 STATEMENT OF DAVID J. CIBRIAN, PARTNER, JENKENS & GILCHRIST, 
                       SAN ANTONIO, TEXAS

    Mr. Cibrian. Thank you very much. I am a partner with the 
Dallas, Texas-based law firm of Jenkens & Gilchrist where I 
specialize in international matters. I had the pleasure of 
being before this Subcommittee in March 1994 to discuss U.S. 
policy toward Cuba, and I appreciate having the opportunity to 
be with you again today.
    To, likewise, respond to the concerns voiced earlier about 
where are the Cuban-Americans, I am pleased to say that we are 
here; we oppose current policy toward Cuba, and we support the 
sale of food and medicine for the Cuban people and the Cuban 
Humanitarian Trade Act, H.R. 1951.
    I am the Miami-born son and grandson of Cuban immigrants 
who fled their country in 1961. The engineers of centralized 
economic planning took everything my family owned. My relatives 
came to this country with nothing but the clothes on their 
back, but they also came with a fierce determination to 
succeed. Once here, they worked 14-hour days washing dishes and 
cleaning hotel rooms. They were exhausted; penniless; unable to 
speak the new language of their new country, and longing for 
the family members and home that they had left behind.
    In Cuba, my grandfather was arrested for the crime of 
owning his own business. He was threatened with execution and 
intimidated with promises that his daughter's safety hung in 
the balance. There has not been a single day in 36 years that 
he has not remembered his Cuba, but the proudest day of his 
life came last year when, at the age of 76, he was sworn in as 
a citizen of the United States.
    The Cuba of today, however, is vastly different than the 
Cuba my grandfather knew and left behind. Unlike the majority 
of Cuban-Americans, I know the Cuba of today because I have 
witnessed it first hand, having traveled there seven times in 
as many years. I have been accompanied on these trips by 
representatives of domestic and international corporations 
interested in doing business in that country. My observations 
today are a result of experiences in Cuba with Cubans. Cubans 
of every walk of life, from the most senior foreign investment 
decisionmaker to the former surgeon who drives a cab because 
the pay is better.
    For 36 years, U.S. policy has had one simple objective: The 
ouster of the Castro brothers from power. The longstanding 
embargo and its progeny, the Cuban Democracy Act and Helms-
Burton law have failed to achieve their objectives. When I came 
before this Subcommittee in 1994, the Cuban embargo was in 
force; the Cuban economy was weak, and Fidel Castro had seen 
better days. Today, more than 4 years later, the Cuban embargo 
is strong; the Cuban economy is stronger, and Fidel Castro is 
stronger. Are we not headed in the wrong direction?
    Our policy toward Cuba needs to be formulated in a manner 
which is commensurate with sound foreign policy judgments; in a 
manner which clearly defines obtainable objectives; defines 
those objectives based on the fact of current circumstances, 
and results in a policy which is not recalcitrant to calibrated 
adjustments as changes in circumstances warrant. This approach 
has been absent from Cuba policymaking since almost its 
inception.
    This is the time when we should be rethinking the efficacy 
of our embargo philosophy toward Cuba. Recent congressional 
initiatives, such as H.R. 1951, would bring us closer to dialog 
with Cuba. This bill would provide economic benefits to U.S. 
business and alleviate the suffering of the Cuban people 
without further burdening the U.S. taxpayer or our foreign aid 
programs.
    U.S. business has already missed substantial economic 
opportunities and the ability to serve as engines of change. In 
my home State of Texas, it is estimated that exports to Cuba 
could range from $200 to $300 million in the first year of 
normalized relations. Texas' estimated 15-percent share of U.S. 
exports to Cuba would be in line with the State's pattern of 
trade with Latin America. The greatest export potential for 
Texas would be in agricultural products; products of the type 
that Cuba once imported from the United States. The Port of 
Houston currently handles more foreign tonnage than any port in 
the United States. Texas business favors trade relations with 
Cuba. For example, American Rice, one of the largest rice 
producers in the country with headquarters in Houston, supports 
H.R. 1951.
    I support the return of democracy to Cuba and so does U.S. 
business, however, our current economic and trade policy 
neither returns democracy to the Cuban people nor permits our 
U.S. businesspersons to serve as catalysts for change as they 
so often have been throughout the world. H.R. 1951 would 
provide the U.S. food and medicine private sectors the 
opportunity to bring change to the needy Cuban people.
    Mr. Chairman, Mr. Rangel, I appreciate the opportunity to 
be heard. Thank you.
    [The prepared statement follows:]

Statement of David J. Cibrian, Partner, Jenkens & Gilchrist, San 
Antonio, Texas

    Mr. Chairman and Distinguished Members of the Subcommittee:
    My name is David J. Cibrian. I am a partner with the 
Dallas, Texas-based law firm of Jenkens & Gilchrist, where I 
specialize in international matters, specifically doing 
business in and with Latin American countries.
    I had the pleasure of being before this Subcommittee in 
March of 1994 for the purpose of discussing U.S. policy towards 
Cuba and I appreciate having the opportunity to be with you 
again today.

                        Personal Nexus with Cuba

    I am a Miami-born Cuban-American and the son and grandson 
of Cuban immigrants who fled their country in 1961. Our story 
exemplifies a tragic moment in the history of Cuba. The 
engineers of centralized economic planning took everything my 
family owned. My relatives came to this country with nothing 
but the clothes on their backs and their hearts in their hands. 
But they also came with a fierce determination to succeed and 
the pride which that entails.
    Once in the United States, they worked 14-hour days washing 
dishes and cleaning hotel rooms in Miami Beach for little or no 
pay. They cried secretly at night, exhausted, penniless, unable 
to speak the new language of their new country and longing for 
the family members and home they had left behind.
    In Cuba, my grandfather was arrested for the crime of 
owning his own business. He was threatened with execution and 
intimidated with promises that his only daughter's safety hung 
in the balance. There has not been a single day in the last 36 
years that he has not remembered his Cuba, but the proudest day 
of his life came just last year when, at the age of 76, he was 
sworn in as a citizen of the United States.
    The Cuba of today, however, is vastly different than the 
Cuba my grandfather knew and left behind.

                    Professional Experience in Cuba

    Unlike the majority of Cuban immigrants and Cuban-
Americans, I know the Cuba of today because I have witnessed it 
first hand on several occasions. I have traveled there seven 
times in as many years, always legally and pursuant to travel 
restriction exemptions. I have been accompanied on these trips 
by representatives of U.S. and non-U.S. corporations and 
organizations interested in investment in Cuba. Therefore, my 
observations today are a result of such first-hand experiences 
in Cuba with Cubans. Cubans of every walk of life, from the 
most senior foreign investment ministry decision maker to the 
former surgeon who drives a cab because the pay is better.

                Prospects for Future Economic Relations

Impact to the U.S.

     Cuba's 11 million people are in need of all forms of 
goods. As a result, studies have concluded that during the 
first year of normalized U.S./Cuba relations, trade between the 
two countries could reach from US$2 to 3 billion. Total trade 
could surpass $7.0 billion in the few years thereafter.

Impact to Texas.

     In my home state of Texas, it is estimated that exports to 
Cuba could range from US$200 to 300 million in the first year 
of normalized relations. Texas' estimated 15% share of U.S. 
exports to Cuba would be in line with the state's patterns of 
trade with most other Latin American nations.
    The greatest export potential for Texas would be in rice, 
cotton, herbicides, industrial machinery, computer equipment, 
petroleum products and technology, and transportation 
equipment, to name a few. Many of these products are of the 
type that Cuba once imported from the U.S. Texas is well suited 
to do significant trade with Cuba due to its proximity to, and 
trading experience with, other Latin American countries. The 
Port of Houston currently handles more foreign tonnage than any 
port in the United States.

Impact to Cuba.

    No sector of the Cuban economy provides greater potential 
for U.S. business and has received greater amounts of foreign 
investment to date than has tourism. This is an industry which 
has provided much needed hard currency to the troubled Cuban 
economy. Feasibility studies and historical data indicate that 
tourism resulted in 1990 total revenues of US$243 million, and 
is expected to result in US$3.12 billion by the year 2000. This 
data does not take into account the U.S. tourist. The impact of 
U.S. tourist travel to Cuba post-embargo is projected by some 
in the travel industry to reach a level as high as 10 million 
visitors annually.
    Given the trade potential which I have just highlighted and 
recent events in and with Cuba, the level of interest among the 
U.S. business community for investment in Cuba has not been 
this significant in many years. Although suffering from the 
uncertainties which passage of the Helms-Burton legislation 
brought in March of 1996, U.S. business interest has clearly 
rebounded since Pope John Paul II's visit to Cuba this January. 
In the weeks following the Pope's visit, I have discussed with 
numerous U.S. companies opportunities in a post-embargo Cuba. 
Some of these now have applications pending before the Treasury 
Department's Office of Foreign Assets Control for ventures 
which they are hopeful might be approved in spite of current 
restrictions.

                          Our Trading Partners

    U.S. business has already missed substantial opportunities which, 
instead, have gone to Canadian, French, Spanish, British and other U.S. 
trading partners.
    Within just the last week, French and Chilean corporations have 
announced substantial additional investments in Cuba. Chile's Ingelco, 
S.A., inaugurated a new milk production unit in central Cuba which was 
the result of an initial US$2.6 million investment. Foreign investors 
committing hard currency to milk production in 1998 is an ironic twist 
given that Cuba nay-sayers predicted in 1990 that Cuba would be so hard 
hit by the Soviet collapse that it would not be able to provide milk 
for its own children.

France.

    With regards to France, French officials are expecting a 30 percent 
rise in 1998 Franco-Cuban trade. This follows an increase in French 
exports to Cuba of 28 percent in 1997 (approximately US$211 million). 
Total French investment in Cuba is estimated at US$100 million.

Canada.

    Canada is Cuba's largest trade partner with a total investment of 
US$427 million. Two-way trade between the countries has been estimated 
at more than US$490 million in 1997. Of the more than 300 foreign 
investment transactions as of the end of 1997, 40 were with Canadian 
firms. Spain had more deals--60, but their value was only US$100 
million, compared to Canada's US$427 million.

Other.

    The commitment of foreign investors continues to grow. Spain has 
committed millions of dollars to the tourism, agriculture, and real 
estate sectors. Spanish companies are also commercializing Cuban 
tobacco products and recording artists. The British government is 
providing financing and the British private sector is investing in a 
variety of industries.

             Helms-Burton's Impact on U.S. Trade Relations

    Not surprisingly, Cuba's major trade partners are also the U.S.' 
major trading partners; partners who have been vocal in their 
opposition to the extraterritorial impact of Helms-Burton. On the eve 
of a European Union/U.S. economic summit, this trade dispute goes 
unresolved. The European Union's efforts to adopt a Multilateral 
Agreement on Investment have been damaged because of France's 
insistence on a Helms-Burton ban. Canada and Mexico have each adopted 
their own versions of Helms-Burton ``antidote legislation'' which puts 
foreign subsidiaries of U.S. companies who attempt to comply with both 
sets of laws in an impossible position. The international community, 
long critics of our Cuban trade embargo, have rallied around opposition 
to Helms-Burton like no other issue in U.S.-Cuba relations.

             Current U.S. Policy Toward Cuba Is Ineffective

    For the last 36 years U.S. policy towards Cuba has had one simple 
objective--the ouster of the Castro brothers from power. The long-
standing trade embargo and its progeny the Cuban Democracy Act of 1992 
and the Cuban Liberty and Democratic Solidarity Act of 1996 (``Helms/
Burton'') have failed to achieve their objective.
    When I came before this subcommittee in 1994 the Cuban embargo was 
in force, the Cuban economy was weak and Fidel Castro was strong. 
Today, more than four years later, the Cuban embargo is stronger, the 
Cuban economy is stronger and Fidel Castro is stronger. Are we not 
headed in the wrong direction?

                     Needed Changes in Cuba Policy

    At some point, our policy towards Cuba will need to be formulated 
in a manner which is commensurate with sound foreign policy judgments. 
In a manner which:
     clearly defines attainable objectives;
     defines those objectives based on the facts of current 
circumstances; and
     results in a policy which is not recalcitrant to 
``calibrated'' adjustments as changes in circumstances warrant.
    This three-pronged approach has been absent from Cuba policy making 
since almost its inception. This is the time when we should be 
rethinking the efficacy of our embargo philosophy towards Cuba. The 
current embargo and Helms-Burton in specific have taken us farther away 
from dialogue with Cuba and, therefore, the attainment of clearly 
defined and attainable foreign policy objectives. Recent initiatives 
such as the Cuban Humanitarian Act (H.R.1951) would bring us closer to 
dialogue.

                               Conclusion

    I support the return of democracy and free market economic 
principles to Cuba and so do the many U.S. business interests which 
want to do business in Cuba. However, our current economic and trade 
policy neither returns democracy to the Cuban people, nor permits our 
U.S. entrepreneurs and business persons to serve as catalysts for 
change, as they have so often been throughout the world.
    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to be heard.
      

                                


    Chairman Crane. Thank you, Mr. Cibrian, and our next 
witness, Mr. Peters.

     STATEMENT OF PHILIP PETERS, SENIOR FELLOW, ALEXIS DE 
          TOCQUEVILLE INSTITUTION, ARLINGTON, VIRGINIA

    Mr. Peters. Thank you, Mr. Chairman, and thank you, Mr. 
Rangel. I worked in the Reagan and the Bush administrations in 
the State Department in the Latin America Bureau. I first 
traveled to Cuba in 1991 as a State Department official. Since 
then, I went to Cuba in 1996 and just in March of this year to 
conduct economic research there. Earlier in my career I worked 
for quite a number of years for Jim Courter, your former 
colleague, and I hope that that training gave me an ability to 
get right to the point when speaking to Members of Congress, so 
I'll try to be as brief as I can.
    The main point I'd like to make to you is that Cuba's 
economy is changing, and markets are starting to function 
there, and rather than express this in jargon, let me just talk 
to you about three people that I've met in Cuba. They're not 
typical because most people are still in the state economy, but 
these people show you the kind of change that's taking place.
    Take Roberto, a man who's 35 years old; he's a sales 
representative for a European company that functions in Cuba, 
and he spends his time trying to make sales. He travels around 
the island; the company's an equipment manufacturer. For his 
work,he earns about five times what a doctor makes in Cuba, and 
he's learning the skills of marketing and how to make sales and 
how to assess what's needed in different places, and he's 
basically working in the international economy, and he's paid, 
by the way, as are many people who work in the foreign 
investment sector in Cuba, both in pesos and in dollars, so 
that's what accounts for the fact that his salary is so high.
    Take a man named Luis, a small farmer. There's an 
agricultural reform going on in Cuba, and he recently tried his 
hand selling his surplus produce in a farmers' market; there's 
about 20 of them in Havana. It didn't work out, so now he's 
going to concentrate all his energy on making as much surplus 
production as he can on his farm to sell, according to the laws 
of supply of demand, in those markets.
    And, last--and this is where I spend most of my time, in 
the small business sector--I'll tell you about a guy named 
Daniel who for the past 2 years has been working as a 
locksmith. There are 160,000 Cubans like him who quit 
government jobs or got laid off, and set up a small business. 
He doesn't particularly make a lot of money. He doesn't really 
make a whole lot more than he used to, but when you talk to 
him, he likes the independence he has. I asked him, ``What's 
the challenge in your job?'' He says, ``Well, I have to learn 
accounting. I have to learn how to track my costs and pay taxes 
and also how to deal with difficult customers.'' He says, 
``These are things that I don't know about and none of them 
mattered when I worked for the state.''
    You sum all this up and what is happening in Cuba is that 
elements of capitalism are starting to function there; the 
beginnings of market activity, and especially in the case of 
small business, there's some economic freedom for the 
individual. In sum, it used to be that where there was nothing 
but the state's planned economy and the black market, now, that 
is not so.
    I want to be very careful and put this in perspective for 
you because the changes or the adjustment or the reforms that 
are going on are small compared to the market economies that 
surround Cuba. The pace of these changes is slow and the 
restrictions on the people that I just talked to you about are 
many, but when you see these things from inside Cuba and when 
you assess the impact it has on people's lives, the 
significance is much more than what we can imagine from afar.
    I'll just give you one example. A colleague and I had an 
opportunity in March to talk with about 150 of these 
entrepreneurs, and they earn, on average, 70 percent more than 
a Cuban doctor earns. So, you can talk about the restrictions; 
you can talk about the taxes and the fact that there's only 12 
seats in a restaurant and all that, but, in the end, those 
people are learning entrepreneurship and making a difference in 
their lives.
    These are not just isolated changes. A hotel maid who earns 
some tips in dollars, she may pay a seamstress who has a home 
business. A miner who gets a pay supplement in dollars probably 
goes to the farmers' market and supports, thereby, the 
development of private agriculture in Cuba. A retiree who may 
get some donations from his relatives abroad may save it and 
give it to his son to start a small business. There are 
multiplier effects in Cuba's economy just as there are here.
    How should we react to this? In my view, we've got profound 
political differences with Cuba, and we should always express 
them forcefully and unequivocally. But we ought to be able to 
have a policy that expresses our political disagreement and, at 
the same time, tries to exercise American influence where some 
positive things are going on.
    And I would respectfully suggest a few measures. First of 
all, to promote change. Until 2 years ago, U.S. policy, as set 
forth in the law that the Congress passed, was to encourage the 
changing of sanctions ``in carefully calibrated ways''--as the 
law said--``in response to positive developments in Cuba.'' 
Today, our law freezes our sanctions in place until Cuba's 
Government no longer includes Fidel or Raul Castro, and it 
directs the President to appoint new officials and committees 
to ``promote market-based development in Cuba'' but only when a 
total political change has occurred. I would argue that the 
previous law was a more useful foreign policy tool. It would 
allow sanctions to be modified as conditions change in Cuba. I 
think that's the essence of a practical diplomacy.
    Two other thoughts for you: Right now, Cuban-Americans have 
the right to travel to Cuba. Why not extend that right to all 
Americans? Cuban-Americans have the right to make donations to 
Cubans. Why not extend that right to all Americans? If we would 
do that, we would help the small business sector which in part 
feeds off of contact from outside, and then that would have 
multiplier effects throughout the rest of the small business 
sector. We would be providing humanitarian assistance. And we 
would create thousands of people-to-people contacts. That is 
something that our law and the administration have tried, but 
we haven't succeeded through a government program of people-to-
people contact. I think the way to do that is to just free the 
American people to travel to Cuba. It's a simple and certainly 
less bureaucratic way to do it.
    And this final comment: I deeply respect those who have a 
different view of this situation and who oppose any measure 
that might lift the controls on American contact with Cuba or 
that might permit dollars to flow to Cuba. And I acknowledge 
that many of these folks believe that the value of engagement 
might be outweighed by some perception that contacts with Cuba 
by Americans is somehow going to imply endorsement of the 
Government in Cuba.
    I respectfully disagree, and I'll just tell you that in my 
hundreds of conversations in Cuba, I've never met a single 
Cuban in Cuba who wants his or her country's economy to 
deteriorate, or who expects economic hardship to bring 
political change to Cuba, or who views travel or investment 
from abroad as political statements in support of Cuba's 
Government.
    So, I raise those few ideas deliberately to give you a 
sense of some of the things that could be done without touching 
the core issue of the embargo. I endorse a lot of the comments 
that have been made today, that engagement will do much more to 
promote our values and our interests in Cuba than the policy 
we're pursuing now.
    Thank you.
    [The prepared statement follows:]

Statement of Philip Peters, Senior Fellow, Alexis de Tocqueville 
Institution, Arlington, Virginia

    Mr. Chairman, Members of the Committee:
    I welcome the opportunity to join you as you review the 
situation in Cuba and American economic and trade policy toward 
Cuba. I run research projects on Cuba and other topics at the 
Alexis de Tocqueville Institution, but the views I express here 
are my own.
    I'll summarize my statement as follows: Cuba's economy has 
survived the shock inflicted by the end of the Soviet Union, 
and it has begun to recover; one means of recovery has been to 
change its economic policies, including the introduction of 
market-oriented reforms; these reforms offer clear benefits to 
the Cuban people, and they create opportunities for the United 
States to encourage further reform; to seize those 
opportunities, the United States would have to move from a 
policy that promotes the isolation of Americans and Cubans from 
each other to a policy that accepts some degree of engagement 
as a means of promoting American values.

                    Surviving the post-Soviet shock

    I'll begin by offering some perspectives on the Cuban 
economy based on my research and travel there.
    The end of the Soviet bloc deprived Cuba of subsidies 
equaling one fourth of its GDP, and it broke trading 
relationships with the USSR and Eastern Europe that accounted 
for over two thirds of Cuba's foreign commerce. As a result, 
the economy was at a near-standstill by 1992-1993, when GDP had 
contracted by over a third, international credit and reserves 
were collapsing, and Havana's streets were often devoid of 
vehicular traffic.
    Today, Cuba is no economic paradise; many goods are scarce, 
peso salaries provide weak purchasing power, and infrastructure 
is in need of renewal across the board. But there has been 
improvement: growth has been restored (7.8% 1996, 2.5% 1997), 
and the currency has been stable at about twenty pesos to the 
dollar for over a year.
    In Havana, there are traffic jams, and one sees some 
construction projects in progress. Perhaps the most unique 
feature of Cuba's economy is its duality; two economies work 
side by side, one in pesos, one in dollars, and many Cubans 
operate in both.
    A number of factors account for Cuba's recuperation, 
including austerity, remittances from abroad, and policy 
changes that are generating new sources of income and 
employment.
    Some of these policy changes adapt the current system 
without changing it fundamentally. State enterprises are not 
being privatized, but they are being forced to meet financial 
targets, and their subsidies are being phased out. Ministries 
and state enterprises have laid off workers. The military has 
been downsized by about half, and a report from Havana last 
week indicates that about half Cuba's military personnel are 
engaged in agriculture or other civilian production. (That may 
be one reason why the Commander in Chief of the U.S. Southern 
Command, General Wilhelm, noted in an interview last week that 
Cuba no longer poses a military threat to the United States.)

                        Market-oriented reforms

    But other reforms are more significant because they are 
introducing elements of capitalism to Cuba's socialist economy.
    I want to be careful to place these reforms in context. 
Cuba is surrounded by market economies, and for the past decade 
and more, many of these Caribbean and Latin American nations 
have worked to make their economies more open to competition 
and investment, both domestically and internationally. Compared 
to policies in place in these neighboring countries--indeed, 
compared to the liberalizing policies that many of us would 
argue would best bring prosperity to Cuba--Cuba's reforms to 
date are carefully limited and their pace is very measured.
    But seen from inside Cuba, the changes brought by these 
reforms are far more significant than they appear from here, 
and their impact on the lives of individual Cubans is far more 
important than we can imagine from afar.
    Foreign investment is one example. Total foreign investment 
in Cuba is relatively small--one analyst, Maria Werlau, 
estimates that total inward investment between 1990 and 1995 
was less than half Chile's investment in Argentina during that 
period. Because of Cuba's legal and regulatory environment and 
other factors, in most areas Cuba is not a strong competitor 
for inward investment in the Caribbean basin.
    But after a three-decade drought, the impact of new 
investment on the economy and on the workforce is significant. 
A growing tourism sector has attracted, according to official 
data, over a million tourists annually for the past two years. 
As a result, hotels, restaurants, and retail shops are being 
built. Tourist spending is sustaining some small businesses, 
and contributing to the restoration of Old Havana. Foreign 
investment has boosted mineral production. It has improved 
telecommunications for the average Cuban and for Cuba's 
international business community, providing better service, 
modernizing infrastructure, and diversifying services.
    These investments take the form of joint ventures with 
state entities, so they do not represent a devolution of 
decision-making to a private sector. Cuban government plans 
dictate which kinds of projects are pursued, and which joint 
ventures are brought to fruition.
    But in many ways, these investment projects, or ``mixed 
enterprises,'' as they are called in Cuba, are bringing parts 
of the Cuban workforce into a more capitalist world. Many 
receive training, whether in international business practices, 
customer service in hotels, or mining methods and safety. They 
also receive better pay than Cubans working for the state, 
because in addition to their standard peso salary, many receive 
pay supplements, either in dollars or in kind. Significantly, 
some of these supplements come in the form of monthly bonuses 
tied to production levels.
    For example, I met a 35-year-old Cuban sales representative 
for a European manufacturer of industrial equipment who is paid 
250 pesos plus $100 per month--for a total of five times a 
Cuban doctor's salary. This man loves his work; he travels from 
province to province building sales leads, taking orders, 
learning how to work in a multinational company as he helps to 
modernize his country's industry.
    Agricultural reform is also having an impact. Management 
structures are changing on Cuban state farms and cooperatives, 
and more significantly, some market mechanisms are being 
introduced.
    On some cooperatives, farmers who work individually or 
collectively are no longer working exclusively for the state. 
They still receive their seeds, equipment, fertilizer, and fuel 
from the state, and in return they fulfill a production quota 
for delivery to the state. However, once the quota is 
fulfilled, they grow crops of their own choice, either for 
their own consumption or for sale on the market.
    This quasi-private surplus production is the source of 
supply for the farmer's markets that operate throughout Cuba, 
about twenty in Havana alone. At these markets, prices are high 
for Cubans earning pesos only (a pound of pork costs five 
percent of a doctor's monthly salary, about fifteen percent of 
a worker's pension), but they bustle with customers, and they 
are competitive. A local economist measured a six percent drop 
during 1997 in the cost of a basic market basket of goods.
    From our point of view, and surely from the point of view 
of many Cubans, these reforms have a long way to go. To take 
just one example, all agricultural inputs are procured, held, 
and distributed by the state. But for the first time in over a 
decade, Cuba is decentralizing decision-making in agriculture, 
some farmers are having a greater say in their work and gaining 
the opportunity to profit from their surplus, that surplus has 
generated a network of markets that operate by supply and 
demand, and those markets are generating private employment for 
producers, truckers, and vendors.
    Small business has made a start in Cuba. Among Cuba's 
reforms, this one represents the most significant grant of 
autonomy to individuals. Simply put, it was illegal five years 
ago for a Cuban citizen to quit a job and set up shop as a 
carpenter, food vendor, locksmith, restauranteur, or mechanic. 
Today it is legal, and over 150,000 Cubans have business 
licenses, and are working entrepreneurs.
    I'll hasten to add that this is not a small business 
economy of the kind that you or I would set up if we were 
writing the rules. Most are one-person businesses, prohibited 
from hiring employees. Restaurants are limited to twelve seats. 
For most, there is no wholesale supply market. Cuban officials 
say that future policy changes may address these issues, but it 
is not clear when these changes will be debated, or when they 
would take effect.
    I was in Cuba in March, following up on research I did on 
Cuba's small businesses in December 1996. This time, I was 
joined by Professor Joseph Scarpaci of Virginia Tech, and 
together we had the opportunity to interview 152 entrepreneurs.
    Many chafe at the limitations imposed on their business 
activity, and they openly complain. They do not like paying 
income taxes, which were re-instituted in Cuba two years ago 
after being abolished for 36 years. They dislike regulations, 
some dread inspectors, and some tell stories of arbitrary 
decisions by inspectors enforcing regulations.
    Still, they take advantage of the opportunity before them. 
And many succeed. On average, after taxes and business expenses 
are paid, they take home seventy percent more than doctors, who 
are very high in the peso salary structure. (That is an 
underestimation, I believe, because some work only part time, 
and many probably understated their earnings to us.) They like 
their autonomy; ``Here, I am the boss,'' they say, like 
entrepreneurs everywhere. They are re-learning the arts of 
entrepreneurship and service, giving new vitality to cities and 
towns that were devoid of commerce just five years ago. And 
they have created a clear example that an economic reform of 
this type can succeed.
    ``Self-employment,'' as they call this small business 
activity, is a new path for recent graduates, retirees, laid-
off state workers, mid-career people who opt for independence. 
About four percent of the labor force is in small business, 
many more if unlicensed businesses are counted. For some, it's 
a part-time endeavor to supplement pension income, but for 
many, it's the way they support their families, and it's a very 
conscious step into a new, unplanned economy.

                      Implications for U.S. Policy

    ``New economy'' may seem too strong a description when one 
considers that socialism still reigns in Cuba. But consider 
that whereas a decade ago Cuba had nothing but the state's 
economic apparatus and the black market, today a legal, private 
economy is emerging, much of it denominated in dollars and 
working according to market incentives.
    In my view, while Cuba's economic reforms are limited, but 
they have a positive impact on many thousands of individual 
Cubans and their families, and the United States could adopt 
policies that would spur growth of the new economy, while 
encouraging further reforms.
    However, this would require a significant change in our 
political approach to Cuba.
    Current U.S. policy aims to deny hard currency to the Cuban 
government, and seeks to limit or block dollars flowing to Cuba 
through remittances, investment, or tourism. Many of these 
funds clearly do reach the government, through taxes or 
receipts in the state's retail enterprises. Some are kept in 
dollar savings accounts, generating capital for small-scale 
investment projects.
    But these funds also sustain Cuba's new economy. The hotel 
maid who earns dollar tips may pay a seamstress who has a home 
business. A miner may spend his dollar pay supplement in a 
farmer's market, supporting the non-state side of Cuban 
agriculture. A retiree may save his relatives' remittances and 
gives his son seed capital to start a mechanic's shop. I 
recently received a report from Cuba that a hotel joint 
venture, seeking to replace imports, is contracting with a 
private farmers' cooperative to supply produce. So in Cuba as 
elsewhere, private economic activity has multiplier effects.
    How could U.S. policy react to these developments?
    Clearly, Americans agree that our foreign policy should 
reflect our values, and as long as Cuba maintains its current 
political system, we should express our disagreement with that 
system.
    But it is not clear to me that the principal means we have 
chosen to express that disagreement--a policy that isolates the 
Cuban and American people from each other, and that clearly 
seeks to bring political change by harming Cuba's economy--is 
the best way to achieve that goal. It is not a policy we 
pursued toward other communist countries, even at the height of 
the Cold War. And our policy is not welcomed by those it is 
intended to benefit. Cuba's bishops long ago called it 
``cruel,'' Cuba's dissidents disagree with it, and Cubans one 
meets on the street, even those who criticize their government 
always seem to ask when relations will normalize.
    In my view, we should be able to craft a policy that 
continues to express our fundamental political differences, but 
does not block broad contacts between America and Cuba, and 
that recognizes and encourages any positive developments 
occurring on the island.
    I would respectfully suggest a few measures that meet those 
criteria. They represent a shift from a policy of isolation to 
one of engagement. They would begin to supply an element that 
is missing from current policy: a sense of confidence that 
greater contact between American and Cuban societies would 
transmit American values and advance American interests.

Promoting change.

    Until two years ago, U.S. law encouraged sanctions in 
carefully calibrated ways in response to positive developments 
in Cuba. Today, current law freezes U.S. economic sanctions 
until Cuba's government ``does not include Fidel Castro or Raul 
Castro.'' It directs the President to name new U.S. officials 
and committees to promote ``market-based development in 
Cuba''--only after Cuba's political system has undergone 
systemic change.
    I would argue that we would do better to encourage positive 
economic change even in the absence of political reforms. In 
that sense, the previous law was a more useful foreign policy 
tool--it would allow sanctions to be modified as conditions 
change in Cuba. It thus made sanctions a tool to promote 
change, and it gave that tool practical value not just in a 
situation where Cuba changes radically, but also in scenarios 
where there are positive, gradual changes that we want to 
encourage.

Travel.

    Instead of limiting travel to Cuba to a few categories 
licensed by the Treasury Department (journalists, researchers, 
family visits by Cuban-Americans), all Americans should be 
permitted to travel to Cuba.
    One immediate and visible impact would be growth of Cuba's 
small business sector, as I described earlier.
    In addition, it would create thousands of people-to-people 
to contacts. In the past, Congress and the Administration have 
attempted to achieve this goal through a government program 
that screens Americans who wish to visit Cuba, and grants 
licenses to some. This program is as cumbersome to the citizens 
who experience it as it is to the federal employees who 
administer it.
    In fact, we do not need this government program. We should 
simply free the American people to travel to Cuba.
    Some Americans would make one-time visits as individuals, 
just to learn about Cuba. There will be increased interest 
among academic, cultural, and other private organizations. Some 
will seek to establish ongoing contacts; some will succeed, 
others will fail. But freed of government restrictions, private 
American contacts with Cuba would be broader, more spontaneous, 
more diverse, and more numerous--in fact, more reflective of 
America itself--than those that result from a government 
program.
    Regarding travel by Cubans to the United States, we should 
also permit a greater degree of freedom. To take one example, 
two months ago Cuba's economy minister was denied a visa to 
attend a conference at Harvard. It is not clear to me that we 
accomplish any foreign policy purpose by denying Americans the 
opportunity to hear--and to challenge--a senior Cuban official. 
It is true that American officials seldom have opportunities to 
address audiences in Cuba, and we should seek to change that. 
But we should not use Cuban restrictions on the free flow of 
information to impose restrictions of our own. Our argument for 
broader U.S. official access to Cuban audiences will be 
stronger, and we will stop needlessly denying Americans access 
to information that they seek, if we simply relax our 
restrictions.

Donations.

    Cuban-Americans are permitted to donate up to $1200 per 
year to their families in Cuba. All Americans should have that 
privilege, and we should consider raising or eliminating the 
$1200 limit. This will increase humanitarian assistance to 
Cuba. It will provide seed capital for small business, and it 
will have other positive effects on the new economy I described 
above.
    These are but three of many constructive policy options. I 
realize that Congress is debating certain aspects of the U.S. 
trade embargo, but I deliberately avoid that issue here, so as 
to illustrate the range of available options that do not touch 
on that core issue.
    I recognize that many in the United States are inclined to 
oppose any measure that might lift the controls on American 
contact with Cuba, or that might permit dollars to flow more 
easily to Cuba, even for humanitarian purposes. I also 
acknowledge that many believe that the benefits of engagement 
would be far outweighed by the perception that contacts may 
imply approval of Cuba's government.
    I respectfully disagree. In my hundreds of conversations in 
Cuba, I have never met a single Cuban who wants his or her 
country's economy to deteriorate, or who expects economic 
hardship to bring political change, or who views travel or 
investment from abroad as political statements in support of 
Cuba's government.
    In March, a Havana priest told me that ``governments always 
find a way to survive'' economic sanctions. Referring to United 
States policy, he said, ``There is nothing positive in 
isolating a people.''
    Mr. Chairman, as Cuba's government prepares to celebrate 
forty years in power at the end of this year, this is a good 
time to question the assumptions that have long guided our 
approach to Cuba. We should summon the confidence that this 
priest and many other Cubans already have in us--that in Cuba 
as elsewhere, Americans will do more for our own values as 
protagonists rather than as spectators.
    Thank you.
      

                                


    Chairman Crane. Thank you, Mr. Peters.
    Mr. Preeg.

   STATEMENT OF ERNEST H. PREEG, WILLIAM M. SCHOLL CHAIR IN 
INTERNATIONAL BUSINESS, CENTER FOR STRATEGIC AND INTERNATIONAL 
                            STUDIES

    Mr. Preeg. Thank you, Mr. Chairman, Mr. Rangel. It's an 
honor to be here; and a special honor to serve as anchorperson 
on this long distinguished list of witnesses. In that context, 
let me just say, for the record, approximately one-half of 1 
percent of the American population are Cuban-Americans, and I 
count 5 out of 20 witnesses, or 25 percent Cuban-Americans, so 
I don't agree that they're underrepresented in this particular 
hearing.
    I'd like to comment just briefly on the four issues that 
you listed to focus the discussion today. First, what is the 
adverse impact of the U.S. embargo on the Cuban people? My 
estimate is that the Cuban economy loses $1 to $2 billion a 
year from the embargo. That compares with total Cuban imports 
of $4.2 billion in 1996; quite substantial. This adverse 
impact, though, comes mainly from the prohibition on U.S. 
exports and U.S. travel to Cuba, tourism most of all. Cuba 
loses, probably, at least $1 billion a year from the 
prohibition on travel. Also, Cuba could export to the United 
States fruits, vegetables, cigars, rum, shrimp, and so forth, 
another substantial loss.
    In contrast, the prohibition on U.S. exports to and 
investment in Cuba, is having little adverse impact on Cuba. 
Others can export instead of U.S. exporters. On the investment 
side, my assessment is that Helms-Burton has had very little 
impact on reducing investment. There's not that much investment 
that's good investment now, but hotels are not covered, not 
expropriated property. For nickel, Sherritt International, a 
Canadian company, goes ahead and ignores the law, and the 
buyout of the important big domestic telephone system by an 
Italian-led consortium has avoided Helms-Burton by making a 
private settlement with the U.S. claimant.
    As to the Pope's visit, second point, it certainly 
strengthens the Catholic Church within Cuba as a vehicle for 
positive change, social, economic, and political, but, in 
addition, it has highlighted, as we've heard today, the 
suffering of the Cuban people from the embargo; from what is 
going on in Cuba, and it has caused a much more important 
visible debate in this country, including today. One specific 
policy result is growing support within the Congress for the 
proposed legislation to raise the embargo on exports of food 
and medicines. To me, that's a win-win proposal. It takes away 
from Castro the unjustified propaganda argument that it is this 
export embargo that is causing the shortages there. It doesn't 
give Castro any significant additional dollars; and it would be 
a very visible humanitarian gesture for the United States to do 
this, so I would hope that some time--maybe this year, maybe 
next year--that this can be brought to a vote with a majority 
favorable bipartisan support.
    The third issue you raised, the humanitarian assistance to 
Cuban people, we've heard a lot about today. There's been a 
broad reaction. Most of this support comes from the United 
States. The Catholic Church organization, Caritas, is out front 
in getting food to the people, but this amount of nongovernment 
organization aid is small compared with the very rapid growth 
over the last 3 years in remittance payments--dollars from the 
Cuban Diaspora, mostly Cuban-Americans, back to Cuba. This has 
been estimated at $600 to $800 million a year by two sources. 
This is a very large amount of money. It equates to more, in 
terms of net dollar inflow, than either tourism or sugar 
exports in terms of the impact on the Cuban economy and on the 
Cuban people. However, at the same time, it creates a dilemma 
for Cuban-Americans, for those who, on the one hand, strongly 
support an embargo whose only intent is to cause economic pain 
on the Cuban economy, on the Cuban people, while, at the same 
time, they're sending money there that offsets and undermines 
the very impact that they claim they want to have.
    And, finally, the fourth point, what is the impact on U.S. 
relations with trading partners? There are two effects, 
somewhat in contradiction. The first one is what they do. Third 
country competitors simply displace U.S. exports in the Cuban 
market. I estimate that the embargo causes in the order of 
export loss $3 to $4 billion a year compared with trade 
relationships in other countries in the Caribbean Basin where 
we are the dominant trading partner. That's the relationship 
compared with a normal relationship. The investment loss is 
harder to quantify, but, obviously, if an American company had 
gotten that contract on the internal telephone system, it would 
be a big payoff over many years with U.S. technologies instead 
of European.
    The second impact on our trade relations is the conflict we 
have with other countries who officially oppose the embargo; 
who have raised disputes over Helms-Burton in the World Trade 
Organization, which has reduced U.S. influence and leadership 
in that important organization, and has also reduced U.S. 
public support in our country for our longstanding liberal 
trade policy. In fact--my final comment--the failure of 
President Clinton to obtain fast track legislation last year 
reflected a public opinion that has turned against the 
longstanding U.S. liberal trade policy, and the many attacks by 
Helms-Burton supporters on the WTO as undermining U.S. 
sovereignty has contributed significantly to that failure.
    Thank you, Mr. Chairman and Mr. Rangel.
    [The prepared statement follows:]

Statement of Ernest H. Preeg, William M. Scholl Chair in International 
Business, Center for Strategic and International Studies

    Thank you, Mr. Chairman, for this opportunity to appear 
before the Subcommittee on Trade and to state my views about 
U.S. economic and trade policy toward Cuba. I hold the William 
M. Scholl Chair in International Business at the Center for 
Strategic and International Studies in Washington, where my 
work is heavily involved with trade policy and the Cuba 
relationship, including my works, Cuba and the New Caribbean 
Economic Order (1993), and From Here to Free Trade: Essays in 
Post-Uruguay Round Trade Strategy (1998). I am currently 
engaged in a CSIS project on unilateral economic sanctions, for 
which I am doing several country case studies, including Cuba.
    This hearing is especially timely because circumstances 
influencing U.S. Cuba policy have changed substantially over 
the past year, both in Cuba and in the United States, and I 
believe a fundamental reappraisal of U.S. Cuba policy is in 
order. You have highlighted four issues as the focus for this 
hearing, which I will address in turn.

         1. The Impact of the U.S. Embargo on the Cuban People.

    The U.S. embargo had little impact on the Cuban people for 
the first 28 years through 1989 because the Soviet Union 
provided massive economic aid to Cuba, in the order of $6 
billion per year in the late 1980s, while the Cuban economy was 
isolated from trade with the West. The abrupt cutoff of this 
aid beginning in 1990, however, led the Cuban economy into 
financial crisis and a sharp decline in its gross domestic 
product by half or more, by my assessment, although the Castro 
government claims the reduction was only 35 percent. Widespread 
shortages of food, medicines, and other consumer goods caused 
much suffering for the Cuban people, and although the Cuban 
economy bottomed out in 1993 and shortages have eased somewhat 
since then, the economic deprivation continues for most Cubans. 
Moreover, the prospect is for slow or no growth in coming years 
as the Cuban industrial base gradually crumbles from the lack 
of job-creating investment--gross investment in 1996 was at the 
incredibly low level of seven percent of GDP.
    The issue is how much of this poor economic performance in 
the 1990s--and the related suffering of the Cuban people--is 
caused by the U.S. embargo and how much by the failed 
centrally-planned economy of the communist government. My 
assessment is that the failed Cuban policies are principally to 
blame, but that the U.S. embargo deprives the Cuban economy of 
$1-2 billion per year of hard currency, which is substantial 
compared with total Cuban imports of goods and services in 1996 
of $4.2 billion.
    This $1-2 billion adverse impact on the Cuban economy from 
the U.S. embargo comes principally from the prohibition on U.S. 
imports from Cuba and travel to Cuba by U.S. citizens. The 
tourism sector is hardest hit. Based on a 60 percent U.S. share 
of tourists in other Caribbean island nations, the lifting of 
travel restrictions should increase Cuban tourism revenues by 
more than $1 billion per year within a few years. A lifting of 
the import embargo would also permit significant Cuban exports 
to the United States of fruits, vegetables, cigars, rum, and 
other consumer products.
    In contrast, the embargo on U.S. exports to and investment 
in Cuba is having relatively little adverse impact on the Cuban 
economy. Cuba imports freely from all other countries rather 
than the United States, at only slightly higher prices, and 
this includes food and medicine imports addressed further 
below.
    As for foreign direct investment, at this time Cuba is 
generally not an attractive country in which to invest. Labor 
costs are extremely high because of a two thousand percent tax 
on labor levied through regulated wage payments in pesos rather 
than dollars. In those sectors where investment has been 
attractive--hotels, nickel, and the domestic telephone system--
non-U.S. companies have been quick to invest and the Helms-
Burton legislation of 1996 has not significantly deterred such 
viable foreign investments. The hotels are not on expropriated 
U.S. properties and therefore Helms-Burton does not apply. The 
Canadian company Sherrit International has invested in nickel 
production while ignoring Helms-Burton. And the Italian-led 
investment consortium in the Cuban telephone system avoided 
Helms-Burton by reaching a private settlement with the U.S. 
claimant. Only a few relatively small investments in other 
sectors may have been deterred by Helms-Burton.
    Thus the Cuban economy suffers adverse impact from the U.S. 
embargo through a loss of tourism revenues and potential 
exports to the United States, which in turn is causing economic 
pain principally on the Cuban people. Dollars flowing into Cuba 
are fungible, the Cuban government sets the priorities for 
their use, and imports of consumer goods have a low priority.

           2. Future Prospects in Light of the Pope's Visit.

    The Pope's visit will strengthen the position of the 
Catholic Church as a vehicle for social, economic, and 
political change within Cuba, but the strengthening will be 
incremental. A broader result of the visit was to highlight the 
economic suffering of the Cuban people and to question the 
adverse impact on them from the U.S. embargo. The Pope has long 
opposed all economic sanctions--multilateral and unilateral--as 
having little impact on the behavior of authoritarian 
governments while causing economic pain to the people, and 
often the greatest pain to the poorest people. The media 
reporting during and after the trip focused on this inherent 
dilemma for economic sanctions policy, which has led to more 
intense international debate about the purpose and effects of 
the U.S. Cuba embargo.
    This debate is most important within the United States 
because all other countries agree with the Pope and officially 
oppose the U.S. Cuba embargo. Within the Cuban-American 
community, which has been a forceful advocate for tightening 
the sanctions, an open split has emerged, although the pro-
embargo faction remains in the majority. The U.S. private 
sector has become more organized and forceful in its opposition 
to unilateral sanctions and editorial comments run more heavily 
against the Cuba embargo in the wake of the Papal visit.
    Two specific policy developments in the United States since 
the Pope's visit are President Clinton's actions in March to 
ease restrictions on travel and humanitarian assistance and 
growing support for legislative proposals in both houses of the 
Congress to unilaterally raise the embargo on exports of food 
and medicines to Cuba. Of the President's actions, the most 
significant is the renewal of direct flights from Miami to 
Havana for Americans legally permitted to travel to Cuba, 
principally Cuban-Americans. Reports are that scheduled flights 
are fully booked and that there will be many more flights than 
there were before they were suspended two years ago. Moreover, 
Cuban-Americans traveling to Cuba now are less intimidated by 
the pro-embargo majority, and include younger generation Cuban-
Americans questioning the longstanding embargo policy.
    The legislative proposal to lift the embargo on food and 
medicine exports is a win-win proposition for the United 
States. As noted earlier, it would not provide significant 
additional dollars to the Castro government while taking away 
Castro's unjustified propaganda argument that the embargo on 
these products is a cause of food and medicine shortages in 
Cuba. It would also be a symbolic gesture of understanding for 
the pressing humanitarian needs of the Cuban people. The 
proposals have well over a hundred co-sponsors in the House and 
more than twenty in the Senate. A significant number of these 
have signed on in light of the Pope's visit. I would urge an 
early hearing and vote on this legislation, and hope that a 
bipartisan majority will vote in favor.

        3. Humanitarian Assistance Extended to the Cuban People.

    The financial crisis and economic suffering in Cuba during 
the 1990s have evoked a strong response from abroad to provide 
humanitarian assistance to the Cuban people. A principal 
difficulty in doing this is to assure that such assistance gets 
directly to the people and is not simply acquired by the 
government for its own purposes. Church groups and other non-
governmental organizations (NGOs) are appropriate channels, but 
it can be a slow and difficult process to get established in 
Cuba. The Catholic Church humanitarian assistance agency, 
Caritas, is the largest and most successful NGO conduit by far. 
As to the source of such NGO support, U.S. assistance is far 
larger than all other country contributions combined.
    This church and other NGO humanitarian assistance, however, 
is relatively small by comparison with the surge of remittance 
payments of dollars to Cuban families from the Cuban diaspora, 
principally Cuban-Americans. Such remittances increased from 
the order of $100 million per year in the early 1990s to an 
estimated $600-800 million per year in 1995-97. The U.N. 
Economic Commission for Latin American and the Caribbean 
estimates the remittance level at $600 million in 1995 and $800 
million in 1996, based largely on an otherwise unexplained 
increase in the Cuban current account deficit of more than $1 
billion per year. The Cuban government estimates up to a $700 
million level in 1997 related to sales in ``dollar only'' 
stores, which were established in 1994 in large part to attract 
such dollar remittance flows into Cuba.
    A qualitative advantage of this humanitarian dollar inflow 
is that all the dollars stay in the country to buy basic 
necessities whereas, in contrast, more than half of gross 
tourist receipts are used to pay for tourist-related imports. 
When taking account of this ``gross-net'' differential, the 
estimated remittance payments provide more dollars to the Cuban 
economy than either the tourism sector or sugar exports.
    Remittance payments from the Cuban diaspora are at least 
several times larger than church and other NGO humanitarian 
assistance combined, and as such present a dilemma for the 
Cuban-American community in particular. Many Cuban-Americans 
strongly support the embargo, which is designed to inflict 
economic pain on the Cuban economy, while providing large 
amounts of humanitarian-based remittance payments which negate 
the economic impact of the embargo policy. In effect, the 
remittance payments are a response to the Pope's message that 
economic sanctions hurt the people. Comparing the size of the 
remittance payments to the Caritas program in Cuba, Cuban-
Americans are indeed more Catholic than the Pope!

         4. The Impact on Relations with U.S. Trading Partners.

    The impact of the U.S. embargo on U.S. trading partners 
consists of two elements that are in basic conflict. It is a 
matter of what they do and what they say. The larger impact by 
far is that the unilateral embargo precludes U.S. exporters and 
investors from the Cuban market, while leaving it open to the 
benefit of all competitors. This did not mean much before 1990, 
when the Cuban economy was integrated with the Soviet Bloc, but 
the adverse impact on U.S. commercial interests has since 
become substantial. The United States is the natural market for 
Cuban trade and investment as it is for economies throughout 
the Caribbean Basin, and with normal commercial relations, the 
United States could expect a 60 percent or more share of the 
Cuban market. In 1996, Cuban imports were $4.2 billion, and in 
the absence of the embargo, such imports would rise to $5-6 
billion (from dollar inflows from increased tourist receipts 
and Cuban exports to the United States as explained above). On 
this basis, U.S. export losses would be in the order of $3-4 
billion per year compared with trade relationships elsewhere in 
the Caribbean basin. This market would not be obtained 
immediately for U.S. exports upon the lifting of the embargo, 
but it is a potential target level in a market now totally 
abandoned to third-country competitors.
    The gains to other countries in the area of investment is 
more difficult to quantify. A five-star hotel on a prime beach 
location can involve a $30 million investment (based on a 50 
percent equity share), but the returns over ten or twenty years 
can be far larger. Similarly, the moderate initial investment 
to rebuild the domestic Cuban telephone system, utilizing 
European rather than U.S. technologies, can have a multiple 
future return.
    The second, largely conflicting element of the impact on 
trading partners concerns their stated official opposition to 
the embargo and to the extraterritorial dimension of the Helms-
Burton Act, in particular, which attempts to restrict third-
country investment in properties with outstanding U.S. 
expropriation claims. This has caused bitter disputes 
bilaterally and within the World Trade Organization (WTO). The 
EU called for a WTO dispute panel and the United States 
protested on grounds that the Helms-Burton measures are about 
foreign policy not trade policy, and that if the EU pressed its 
case the United States would claim a ``national security'' 
exemption under Article XXI of the GATT. On both counts, the 
U.S. position is without merit and tends to undermine U.S. 
support within the WTO. Many trade policy measures are related 
to foreign policy but this in itself is not grounds to violate 
WTO commitments. As for GATT Article XXI, the national security 
exemption is only permitted under the narrowly defined 
circumstances of ``war or other emergency in international 
relations,'' and the United States, as the preeminent global 
power, would look foolish and be juridically vulnerable to 
claim such a current relationship with the small, withering 
communist regime in Cuba.
    The United States and the EU are attempting a negotiated 
resolution of the WTO dispute over Helms-Burton and the outcome 
is uncertain. In any event, U.S. leadership within the WTO has 
suffered, as has public support in the United States for the 
WTO, which has been continually criticized by strident 
supporters of Helms-Burton. The failure of President Clinton to 
obtain ``fast track'' legislation last year reflected a public 
opinion that has turned against the longstanding U.S. liberal 
trade policy, and the many attacks on the WTO as undermining 
U.S. sovereignty by Helms-Burton supporters contributed 
significantly to this failure.
    Bringing these two elements of impact on trade relations 
with others together, there is finally the question of whether 
our trading partners--and Fidel Castro--really want the United 
States to lift the Cuba embargo as they say they do. Foreign 
business interests clearly enjoy an inside and now exclusive 
track in a growing market that normally would be dominated by 
the United States. Trade missions to Cuba are actively promoted 
by European governments. The CEO of Sherrit International is 
outspoken in public condemnation of Helms-Burton, but his 
private preference reportedly is for the embargo to continue as 
long as possible in order to broaden investment interests in 
Cuba in the absence of American competitors.
    As for Fidel Castro, my personal assessment, based on 
decades of his highly successful nationalist, anti-U.S. 
posturing, is that the last thing he would want to see is a 
lifting of the U.S. embargo. And if this assessment is correct, 
the entire rationale for current U.S. economic and trade policy 
toward Cuba is open to serious question.
      

                                


    Chairman Crane. Thank you, Mr. Preeg.
    Mr. Paparian, what's been your experience under the 
administration's current process to receive a license to 
provide humanitarian assistance to the Cuban people? Has this 
process been cumbersome?
    Mr. Paparian. Well, we're about to find out. The license 
was finally submitted last week, because we had to, first, 
assemble the medical equipment and supplies that are going to 
be shipped to Cuba and itemize exactly what the items were, so 
until we'd assembled all the items and categorized them in the 
warehouse in San Pedro near Long Beach, California, we weren't 
able to submit the license. We're told that the license process 
takes approximately 5 weeks; that approximately 99 percent of 
the license applications are approved.
    But I do want to point out one thing and that is there 
seems to be a gap between what the U.S. Government is saying is 
going to Cuba and what humanitarian relief agencies are aware 
is going and what the Cuban Health Ministry says is going. The 
last year that we have information on is the year 1996, and 
during that year, the Republic of Cuba received $87 million in 
U.S. dollars of humanitarian assistance from all over the 
world. Of that total, $87 million, only $6 million was from the 
United States. That's according to Cuban Health Ministry 
sources. It might be worthwhile for this Subcommittee in its 
work to take a look, take a hard look, at what the numbers 
really are showing on the total of humanitarian assistance 
coming from the United States.
    Chairman Crane. Mr. Peters, how does the compensation 
earned by Cubans working in joint ventures with foreign firms 
compare to the compensation earned by workers in exclusively 
state-owned firms?
    Mr. Peters. Well, I have not collected systematic data on 
that, but, in general, it's higher. I know from talking to a 
lot of people who work in those joint ventures and to Cuban 
economists and others that, in general, those firms, those in 
the joint venture sector, pay a Cuban peso salary--rather, the 
workers receive a Cuban peso salary directly from the agency 
that employs them, because the foreign company can't hire the 
Cubans directly; they're hired through an agency. So, the 
agency gives them some pesos, but the company also gives them 
some dollars or gives them some payment in kind, and more 
interesting than that, is that in some cases--I know in the 
mining sector and in other sectors too--some of the workers are 
starting to get paid according to production. So, if the mine 
does well in a certain month, they get a higher monthly bonus. 
You asked about workers that work exclusively for the state. 
They get paid in pesos, although, I understand that in some 
cases now, some get payments in kind that are in addition to 
the peso salary. In some ways, this is a response to the higher 
pay that is beginning to be earned in the market-based sector 
of the Cuban economy.
    Chairman Crane. And my next question's for any or all of 
you. Several commentators have described limited market-
oriented reforms underway in Cuba. What has the Castro regime 
said about these policies, and why do you think these reforms 
have been implemented?
    Mr. Preeg. With the abrupt cutoff of the huge Soviet aid, 
$6 billion a year, Castro was forced to take these reforms in 
order to avoid economic collapse in 1992, although by 1993 the 
economy was bottoming out. He was forced to do it to get 
dollars in; tourism, the nickel production--those are the two 
largest sectors affected in the external accounts, and 
internally he gave price incentives to farmers; to farmers' 
markets; to the small businesses that are now in the order of 
100,000, family businesses to provide basic services to the 
people.
    Now, he's trying to hold back the reforms because he knows 
the more this market economy expands, the more difficult it is 
for him to control it, and that's really the big game going on. 
The problem, though, for him is that the market share of the 
economy is growing, and he admits that now 50 percent of the 
people have dollars and are into the market economy, much of it 
in a black market, a gray market; and all the incentives, all 
the imbalances between the peso economy and the dollar economy, 
create pressure to move to the dollar.
    The best example, if you want an enjoyable exposure for 2 
hours rather than listening to the likes of us, is to go see 
the film ``Guantanamara.'' It was made and shown in Cuba; it is 
a hilarious story, but it shows from start to finish the way 
the dollar economy is undermining all of the state-controlled 
relationships and the bureaucracy that are still trying to 
control the Cuban economy.
    Mr. Cibrian. If I could expand on that, Mr. Chairman. I 
agree that the economic reforms we have seen to date, and 
having met with the Foreign Investment Ministry Officials 
there, that they have been implemented out of necessity, but 
they certainly have not gone far enough. Earlier, I believe it 
was Congressman Jefferson who alluded to the question of what 
comes first, economic, religious, or political reforms? And I 
think a clear benefit of engagement between U.S. business and 
Cuba would be to help them learn and help motivate them for 
further economic reforms, and once that occurs, I think it is 
very difficult for political reform not to follow suit; not too 
dissimilar as to what we're seeing happening in Mexico with 
their political process right now.
    Mr. Paparian. Mr. Chairman, let me give you another 
perspective on your question. I was in Cuba in January, and I 
heard the Pope's call for the world to open up to Cuba and for 
Cuba to open up to the world, but the real question for us this 
afternoon, how will Cuba open up to the United States, and how 
will the United States open up to Cuba? Most Americans are 
under the false impression that hostilities between the United 
States and Cuba, military hostilities, ended with the Bay of 
Pigs debacle.
    I would commend for this Subcommittee and for your staff a 
book that was written by Jane Franklin which is a chronology of 
the relationship between the United States and Cuba, going back 
and looking at the newspaper and magazine archives. In fact, 
the hostilities continued on covertly under code names like 
Operation Mongoose.
    The Government of Cuba still has a sense of being under 
siege from the United States. Just last year, there were a 
series of bombings that occurred in tourist hotels, and there 
was the tragedy of an Italian businessman who lost his life. 
The Cuban police apprehended someone who confessed that he'd 
been trained in the United States at a military base and that 
he received assistance from the United States. Just a couple of 
days ago, the New York Times carried the story of what happened 
when a boat was seized by the U.S. Coast Guard; traced back to 
the United States of people on their way to Venezuela to 
assassinate President Castro.
    Most Americans aren't aware of how the Cubans view the 
relationship, and it would be important, I think, for the 
Subcommittee staffers to take a look at this chronology and to 
trace the history. You'll get a sense, then, of how there is 
the resistance to opening up to market reforms when there's a 
sense of being continually under siege. The hostilities from 
the cold war between the United States and Cuba are not over 
yet.
    Chairman Crane. Mr. Peters.
    Mr. Peters. We can't be under any illusions; it's a 
Socialist economy, and the way they put it is that they are 
incorporating some elements of capitalism into their Socialist 
economy. Certainly, the foreign investment is one part; the 
incentive-based parts of agriculture are part of it; the small 
business is another. In the case of small business, one Cuban 
official said to me, ``We decided that we no longer needed to 
plan how every service in the economy would be provided.'' So, 
they allowed Cubans to decide to open small businesses, and 
they provide a lot of services as a result.
    Mr. Ranneberger from the State Department mentioned the 
taxes that have gone on to the small businesses, and they 
certainly have imposed taxes. It would probably be fascinating 
for you, as members of the taxwriting committee, to go and see 
a place where there was no income tax for 36 years, and then 
talk to people who now have paid their first income tax for 2 
years. They're paying them, and one reason it was put on--a lot 
of people interpret it as punitive, and, frankly, the rates are 
higher than you or I would probably prefer, but this is a 
sector of the economy that was prospering and paying no tax, 
and so the government put the taxes on so as to avoid income 
inequality and to be able to say, ``Yes, these people are 
prospering, but those of you who aren't making as much money--
at least they're paying a tax to contribute.''
    There are some ideas under consideration that might allow 
the small business sector to expand--such as the creation of 
small- and medium-size businesses, to allow some of these sole 
proprietors to have partnerships or employees, or to establish 
wholesale markets so that they have access to wholesale 
supplies. I would hope that the fact that they have now put a 
tax system into place and they see the people are paying taxes 
and they're collecting a lot of money from it, might make some 
of these officials comfortable enough to allow some of these 
other measures to allow the small business sector to expand.
    Chairman Crane. Thank you.
    Mr. Rangel.
    Mr. Rangel. Mr. Cibrian, I get the impression that for 
those who support the embargo and, indeed, love Cuba, hoping 
that we will cause so much economic pain that the Cuban people 
on the island would somehow overthrow the government, is that 
basically the objective as you discussed this with those who 
support the embargo?
    Mr. Cibrian. As I mentioned, Mr. Rangel, I've had the 
opportunity to travel there over a span of 7 years now, and I 
have met with Cubans of all walks of life, and that is not the 
case, and it is not an attainable objective.
    Mr. Rangel. No, but I'm asking for those who support the 
embargo, I mean, they just don't want to cause pain to their 
people in Cuba. They just don't want to be mean-spirited, and 
it's not just an anti-Communist thing, don't they explain that 
they would want the Cuban people to uprise against the 
Communist government? Is that basically----
    Mr. Cibrian. That is one of the rationalizations used for 
their support of the policy, yes.
    Mr. Rangel. Because I can't get clear answers, and I 
thought maybe they might be a little more honest with you being 
Cuban-American. How do they intend to overthrow the Army that's 
down there? I mean, the poor Cubans may get annoyed, but even 
if they did want to get rid of Castro, how do they share that 
they're ready to do that when Castro has one of the stronger 
armies in the region?
    Mr. Cibrian. Well, I can assure you, Mr. Rangel, that many 
of the proembargo Cubans have been very honest with me about 
their views given mine. I think it's just very difficult for 
them to reconcile how you can achieve that goal, that uprising. 
Unfortunately, unlike the situation in Czechoslovakia or 
Poland, there is currently no Vaclev Havel in Cuba. Many of 
those Cubans left in 1961.
    If we were to be able to adopt a policy of engagement of 
being able to teach them about economic reforms and economic 
change, we would be able to achieve that. Currently, there is 
an absence of that in Cuba, in the country. So, I don't 
understand how they can get to an uprising of the Cuban people 
by inflicting the pain which is a byproduct of this policy 
whether it's intentional or not, but the fact of the matter is 
that it is what is occurring to the Cuban people.
    Mr. Rangel. And, so when my colleague had difficulty 
supporting liberalizing Cuban-American's travel to Cuba or 
Cuban-Americans sending dollars back to Cuba, all of this is a 
part of trying to create a frustration that is supposed to 
cause the Cuban people to be sicker, more poor, more 
frustrated, then move on to the revolution against President 
Castro.
    Mr. Cibrian. That's a correct assessment, but let me tell 
you, time and time again, my conversations in Cuba with Cubans 
have made it clear that the Cuban nationals are not blaming 
Fidel Castro for their situation; they are blaming the Cuban-
American National Foundation, the Cuban exile community for 
keeping this policy in place.
    Mr. Rangel. Now, because we have to really work with people 
who all want the same objectives: An open and free market in 
Cuba and democracy as they would enjoy it, and a more friendly 
relationship and cultural and social economic exchange, what 
would drive a person to use this method of pain and misery in 
order to say that they love Cuba more than someone else? Where 
is the common sense involved in proceeding in a policy that 
clearly has not given us any hope that it could possibly be 
effective?
    Mr. Cibrian. I agree that it's nonsensical, and it's 
illogical and doesn't comport with foreign policy that we have 
in other countries. Unfortunately, it's a very emotional issue; 
a very passionate issue for those who had to leave their 
country, but I think, unfortunately, there is a silent majority 
of Cuban-Americans in this country who until recently have not 
had an opportunity to speak out either because they were afraid 
to speak out or just did not feel that they would be able to 
have an impact.
    I'll tell you, when I was before the Subcommittee in 1994 
and you were at the time chairman, Mr. Rangel, my father and I 
share the same name. He is fairly moderate in his views about 
our policy toward Cuba. Shortly after I testified here, my name 
was on the Miami media. He received both correspondence and 
phone calls threatening him and my family which lived in Miami. 
I can assure you that his views toward the Cuban exiles that 
adopt that view and his moderation toward policy toward Cuba 
was significantly helped by that; it backfired. He was 
threatened for something he didn't even do; I was the one who 
testified. So, there's been a lot of scare tactics, a lot of 
threatening that has gone on. It has affected my family as a 
result of my position on this issue and before this 
Subcommittee in the past.
    Mr. Rangel. That's a new twist on dissent of the son, 
falling on the father. There's something, too, Mr. Chairman, 
that occurred to me last year. A young fellow came up to me and 
said that he admired my legislative positions except as they 
related to Cuba, and I asked him what was it that I was doing 
as relates to Cuba that annoyed him, and he said it was not 
supporting the embargo, and I said, ``Well, what's wrong with 
it? Why do you object to that?'' He says, ``Well, my 
grandparents had a lot of property in Cuba and when the 
revolution came, Castro took everything.'' I said, ``Well, what 
did he take?'' And he looked at me and he stared. He said, 
``You know, nobody's ever asked me that before.'' He said, 
``And I don't know whether there was anything really for him to 
take, but you're not going to take away my legacy.'' And so, 
sometimes, I think that it may be popular just to be against 
Castro, and I wish we can find some way to be against Castro 
and at the same time remove the pain that we're causing the 
people.
    I want to thank you for your courage, because I've been in 
Miami and seen people taking video pictures of those people 
that were meeting with me, so I know sometimes it takes a lot 
of courage just to exercise your freedom of speech on some of 
those subjects, but I understand that that is changing 
dramatically in Miami, and I'm glad to hear it.
    And for all of you that are involved in just doing the 
right thing, I guess you have to be patient with us, and maybe 
we'll change the way we read the electoral college in Florida. 
That would have a tremendous impact, I think, on not only 
Presidents, but candidates for President. It's sad to see our 
foreign and trade policy driven like that, but our great 
Republic has survived more than just this, and I'm confident we 
will overcome this as well. Thank you so much for your patience 
today and your testimony.
    Chairman Crane. And, I, too, want to express appreciation 
to all of you. It's been a long day and I want to remind my 
good friend Charlie Rangel that all Democrats are potentially 
salvageable. [Laughter.]
    And, with that, let me remind everyone else that our 
hearing record is open for public comment until May 21. Anyone 
interested in submitting a statement for our records should do 
so by that date, and, with that, the Subcommittee stands 
adjourned.
    [Whereupon, at 5:40 p.m., the hearing was adjourned subject 
to the call of the Chair.]
    [Submissions for the record follow:]

Statement of American Farm Bureau Federation

    Thank you for this opportunity to comment on resumed trade 
with Cuba and sending humanitarian aid to that country.
    The American Farm Bureau Federation represents 4.8 million 
member families in the United States and Puerto Rico. Our 
members produce every type of farm commodity grown in America 
and depend on sales to the export market for over one third of 
our production sales.
    Agriculture, including the wide variety of industries 
involved in farm inputs and outputs constitutes one of the 
largest sectors of the U.S. economy. In 1997 the food and fiber 
industries, which include producers of farming equipment and 
suppliers, processors transporters, manufacturers, retailers 
and the financial and insurance service industries that serve 
them comprised 16-17 percent of the gross national product.
    The agriculture industry is our nation's largest direct and 
indirect employer and for the past several years agricultural 
exports have provided the only positive return to the national 
trade balance. These accomplishments can only be sustained if 
our international markets remain open and new markets are 
created. It has been well documented that unilateral trade 
sanctions are sanctions against U.S. markets and destroy our 
reputation as reliable suppliers.
    Farm Bureau strongly opposes all artificial trade 
constraints such as unilateral sanctions. We believe that 
opening trading systems around the world and engagement through 
trade are the most effective means of reaching international 
harmony, social and economic stability.
    The American Farm Bureau Federation believes that all 
agricultural products should be exempt from all embargoes 
except in case of armed conflicts. This statement holds true 
for U.S. wheat exports to Iran, as well for importation of 
Cuban cigars to the United States, or for trade in any market 
around the world. The only entities that gain from U.S. 
embargoes are our competitors as they take over what should be 
U.S. market share.
    Prior to the shift of Cuban alliances to the Soviet Union 
in the late 1950's, the United States was the key trading 
partner for Cuba. Before the 1959 Cuban revolution, 68 percent 
of Cuban trade was with the United States and 40 percent of all 
investment came from the United States.
    Cuba's abrupt shift to dependance on the Soviet Union ended 
in 1990 with the collapse of the former Soviet Union. Since 
then, Cuba has lost its ``sugar for petroleum'' program and the 
economy has plummeted. The Cuban economy has contracted by over 
40 percent since the demise of the Soviet Union, including a 70 
percent loss in imports. Thus, stiff economic hardship prevails 
throughout the country. Opening of trade with the United States 
would provide critically needed resources and allow for the 
beginning of a rebuilding process between neighbors.
    Cuba appears to have recognized that another shift needs to 
be made to a more open ``market-based'' system, and is slowly 
doing so. Cuba has indicated a willingness to abide by the 
rules of the World Trade Organization (WTO) in international 
trade. But, to become a full fledged member of the world 
community many changes are needed. These changes can be 
promoted by engagement in commerce.
    On March 31, 1998, a conference was held in Washington, 
D.C., on ``The Role of the Agricultural Sector in Cuba's 
Integration into the Global Economy and its Future Economic 
Structures: Implications for Florida and U.S. Agriculture.'' 
This symposium, co-hosted by the University of Florida and the 
University of Havana, provided much food for thought and 
summarized over four years of collaborative research. In 
summary, if the Cuban economy is opened for trade with the 
United States, bi-lateral agricultural sales could run as high 
as $1-2 billion annually after 5-7 years of ongoing relations. 
As expected, some agricultural sectors would have 
``challenges'' and others would see ``opportunities.''
    Following are details by commodity sector:

          1) Citrus: Concerning oranges, the United States' chief 
        competitor is currently Brazil. Cuba would rank only 15th on 
        this list and pose no real threat. Grapefruit would be slightly 
        higher, with Cuba ranking 4th worldwide. The biggest challenge 
        would come from Cuban limes and they could challenge Mexico as 
        a provider of product to the United States. Cuba is in dire 
        need of technology to help this sector of their economy grow.
          2) Vegetables: Cuba will compete with the United States, 
        especially in tomatoes, cucumbers and peppers, and especially 
        with Florida. A key will be the disposition of methyl bromide. 
        Cuba cannot afford many chemicals or pesticides and has to 
        currently rely on mostly organic growing conditions. (Without 
        pesticides, Cuban production is down 40 percent from its peak.) 
        The question concerning Cuba as a competitor becomes, what will 
        happen if investment is made in Cuba and production rises by 40 
        percent?
          3) Fishing: Cuba is an important source for 135 species and 
        is ranked third in the world in ``catch diversity.'' Current 
        focus is on low volume but high value, including spiny lobster, 
        snapper, sponge and pink shrimp. Production is still under 
        government control but competition with Florida would be 
        expected.
          4) Sugar: The potential for Cuba to compete in the world 
        market is tremendous. From 1980-1989, 80 percent of Cuban 
        exports were in sugar. Productivity and technology were lost 
        during the collapse of the former Soviet Union, and production 
        plummeted from 7.5 million tons in 1992 to 4.25 million tons 
        today. Their goal is to return to 7 million tons per year.
          Cuban sugar could not enter the United States without a 
        negotiated sugar quota.

    There is room for U.S. exports to Cuba of beans, rice, 
oils, dairy, wheat and lard. There is also room for U.S. 
investment and exports of fertilizers, herbicides, pesticides 
and tractors.
    Competition will exist with the United States, but 
opportunities will also be at hand. Given that we are not in an 
armed conflict with Cuba, trade should resume. At a bare 
minimum, the United States should resume humanitarian 
distribution of food products to Cuba.
    U.S. economic sanctions on Cuba clearly have not brought 
the intended social or political changes. Engagement through 
open commerce must be resumed if social and economic conditions 
are to improve.
    The American Farm Bureau Federation strongly supports 
passage of H. R. 2708, the Enhancement of Trade, Security, and 
Human Rights through Sanctions Reform Act. This legislation 
will help prevent future embargoes such as the ongoing Cuban 
situation by requiring a reasonable evaluation of the 
consequences of imposing unilateral sanctions before they are 
imposed.
    The administration and Congress should take steps to 
protect the economic stability of American agriculture as well 
as for the nation by beginning the process of removing current 
sanctions and prevent future unilateral trade sanctions.
    Thank you for allowing us to present our views.
      

                                


                                 Center for a Free Cuba    
                                       Washington, DC 20036
                                                        May 7, 1998

The Honorable Philip Crane
US House of Representatives
233 Cannon House Office Building
Washington, DC 20515To

    Dear Representative Crane:

    I learned the day before yesterday about the hearings on Cuba to be 
held by the Subcommittee on Trade this afternoon. At the Center for a 
Free Cuba we welcome the Committee's interest in the Cuban situation. I 
am writing, however, to express my disappointment with the effort to 
manipulate the witness list at today's hearing. To present 14 witnesses 
on one side of any issue without adequately presenting dissenting views 
does a disservice not only to the issue of Cuba but also to the 
credibility of the Committee.
    Many of today's witnesses have in recent weeks expressed a concern 
for the plight of the Cuban people. The Castro regime, however, has 
been in place for almost 40 years. The Subcommittee might want to ask 
the witnesses to provide copies of their appeals and other efforts to 
Castro to respect human rights, to stop the practice of interning sane 
dissidents in psychiatric hospitals, and to end the rapid deployment 
brigades (groups of thugs organized by the regime to beat dissidents 
and their families).
    The principled policy of the President has benefited by having been 
the object of considerable Congressional debate in recent years. The 
Congress has reaffirmed by large margins its support for a policy of 
sanctions.
    Much of the campaign against the lifting of the sanctions against 
Castro is also somewhat dishonest because, for some, the real target is 
the lifting of sanctions against Saddam Hussein and Mu'ammar Qadhafi; 
sanctions that, if lifted, would impact US efforts to promote democracy 
in the Middle East and the security of Israel.
    Enclosed is a recent letter by Major General Donald L. Kerrick, the 
Deputy Assistant to the President for National Security Affairs, 
confirming the President's commitment to a policy of sanctions ``as 
long as [the Castro] regime denies the Cuban people their basic human 
rights.''
    Those who urge a different policy towards Cuba are not calling for 
consistency, but rather for an exception to U.S. policy in the 
hemisphere. The United States supports representative democracy and 
human rights from the Rio Grande to Chile, in Central America and the 
Caribbean, where American lives and treasures where put at risk to re-
establish civilian democratic rule in Haiti. As a matter of fact, one 
of your witnesses this afternoon played a major role in convincing the 
Administration to invade Haiti.
    Lifting sanctions against Castro without significant improvement in 
the human rights situation in Cuba will deny the President a peaceful 
tool to influence events and will increase the likelihood of U.S. 
reliance on military force. The policy of sanctions also has the 
support of the overwhelming majority of the American people.
    The President's policy can only be defeated by ignoring the facts 
of Cuba's medical apartheid, where thousands of dollar-paying foreign 
patients receive the medical attention which Castro denies to the Cuban 
people.
    The President's policy can only be defeated if the anti-embargo 
network, funded to the tune of more than 1 million dollars a year for 
the last 3-4 years, is able to repeat today's congressional spectacle 
of 14 private witnesses in favor of one issue while not allowing other 
voices to be heard.
    I would like to thank you in advance for anything you can do in the 
future to ensure that the flow of information to the Committee is as 
free and unencumbered as possible.

            Sincerely,
                                               Frank Calzon
                                                 Executive Director
      

                                


[GRAPHIC] [TIFF OMITTED] T5762.014

      

                                


Statement of Delvis Fernandez Levy, Ph.D., President, Cuban American 
Alliance Education Fund, Inc.

                 U.S.-Cuba Policy Also Affects Families

    The essential regulations embodied in the U.S. economic and 
trade embargo toward Cuba, built over a period of almost 40 
years and spanning the tenure of 9 U.S. presidents, have had a 
profound negative impact on Cuban Americans and their families 
and friends in Cuba.
    Unlike other U.S. imposed embargoes, the Cuban embargo 
completely bans food sales between the U.S. and Cuba. The free 
flow of medicines and food was allowed in embargoes against 
North Korea, Vietnam, South Africa, Chile, El Salvador, the 
Soviet Union, and Haiti. In recent UN-supported embargoes 
against Iraq and the former Yugoslavia, the UN upheld the 
principle that medicines and food must be allowed to serve the 
basic needs of the civilian population.
    The embargo severely hinders Cuba's import of food staples 
and basic medicines from other nations, due to the fact that 
ships that dock in Cuba are prevented from docking at U.S. 
ports for a period of six months. Moreover, the requirement for 
``on-site verification'' and complicated U.S.-licensing 
procedures discourage U.S. pharmaceutical companies, their 
overseas subsidiaries, and any foreign company using U.S. 
patents from selling medicine and medical equipment to Cuba.
    The trade embargo penalizes American investors. While Cuba 
is opening to investors from all over the world, Americans are 
not allowed to engage in commerce with new generations of 
Cubans and take advantage of business opportunities in 
agriculture and pharmaceuticals, i.e., life-sustaining food and 
life-saving vaccine, medicine and medical equipment.
    The U.S. embargo creates a state of siege in the Cuban 
population, thus handing the Cuban Government a ready excuse 
for any failed economic policy. And as an added consequence, it 
closes doors and possibilities for Cuban Americans in the U.S. 
to address issues of common interest for the good of the Cuban 
nation.
    From a human perspective it causes pain and suffering to 
innocent human beings in Cuba and in the U.S.
     Due to travel restrictions, we are not allowed to 
be with our mothers, brothers or sisters for normal family 
activities--simple gatherings to share our love. These 
restrictions clearly destabilize and injure our loved ones in 
Cuba and in the United States.
     Although President Clinton recently relaxed the 
remittance restrictions in response to the Pope's condemnation 
of the U.S. embargo on his recent visit to Cuba, we, as Cuban 
Americans, are still severely restricted on what help we can 
and cannot give to our families and friends.
    Those of us who migrated to the U.S. strive to assist in 
the support of our relatives back home. The assistance money, 
on which we have paid U.S. taxes, often represents meager 
earnings obtained by the sweat of our brow in jobs shunned by 
the rest of society. This assistance is sent to our loved 
ones--the family and friends who nourished our lives and made 
us the men and women we are today.
    We must not be deprived of our God given right to provide 
assistance to our loved ones. An injury to one family is an 
injury to our entire nation. For what is a nation or a people 
without the protection of our most basic unit of civilization--
the family?
    And finally, in what might be the most egregious violation 
of human rights directed towards the entire Cuban people, here 
and in Cuba, we Cuban Americans and Americans in general, are 
prohibited from selling life-sustaining food, and are virtually 
banned from selling medicine, and much-needed medical equipment 
to people in Cuba. Restrictions on medical commerce and the 
denial of life-saving medicines to ordinary citizens violate 
the most basic international charters and conventions governing 
human rights, including the United Nations Charter, the Charter 
of the Organization of American States, and the articles of the 
Geneva Convention governing the treatment of civilians during 
wartime.
    Subsequent to Pope John Paul II's pilgrimage to Cuba, in 
which he condemned the embargo as unjust and ethically 
unacceptable, we join religious, business, disabled, medical, 
and human rights organizations to press for family rights--
rights that include the lifting of restrictions on humanitarian 
trade with Cuba. There is a rising tide of indignation in the 
Cuban American community, and many of us are saying enough is 
enough--Basta! Stop using us and our families to fight a Cold 
War relic.
      

                                


Statement of Paul F. McCleary, Director, ForCHILDREN, Inc., Arlington, 
Virginia

    By way of introduction, my name is Paul F. McCleary. I am 
President of a humanitarian organization known as ForCHILDREN, 
Inc. My interest in and knowledge of Cuba stems from some 
eighteen visits to Cuba since 1975. As a clergyperson, fluent 
in Spanish, involvement in humanitarian organizations has 
afforded me an opportunity for direct contact with the people 
of Cuba and with the entities which provide them with social 
services. I feel my qualifications to speak on the issue stems 
from this long, continuous contact over 22 years with the Cuban 
people.
    This contact has compelled me, as well as many others who 
work in the field of children's health and welfare, to support 
the sale of U.S.-produced food and medical supplies to Cuba. We 
advocate this change because we know from firsthand experience 
that, despite the Cuban government's dedication to healthcare 
for children, it is these young lives that are most devastated 
by the utter lack of food and medicine from the U.S.
    We have seen too many Cuban children suffer terribly, 
simply because some drugs and medical equipment are unavailable 
to them due to the embargo.
    The government of Cuba has demonstrated a commitment to 
provide medical services to all ages, in the most isolated 
areas and on the lowest end of the economic scale. In order to 
fulfill this commitment, the government has developed a medical 
infrastructure capable of responding to these medical needs.
    Cuba established a system of rural hospitals with 
outpatient clinics and facilities to care for a small number of 
short-stay patients. A referral system to large hospitals 
provides services beyond those available in rural hospitals.
    A network of family doctors serves 100 to 120 families over 
an area stretching from one end of the island to the other. 
This network puts health care within the reach of every 
individual.
    The academic system has been geared to provide technical 
and medical personnel to make these networks operational. 
Medical education is available to those who wish to enter the 
profession. A program of continuing education for medical 
personnel is maintained by the Ministry of Health.
    The government of Cuba has developed, as well, special 
programs to meet health care needs. In order to reduce a 
previously high infant mortality rate, the program of UNICEF 
known as ``Baby Friendly Hospitals'' was introduced in over 40 
participating hospitals. One of the major causes of infant 
mortality was identified as ``preemie babies,'' babies born 
prematurely due to their mothers' suffering from malnutrition. 
The government responded with a network of Maternity Homes to 
which underweight expectant mothers are brought until they 
reflect appropriate weight and health factors. This year, Cuba 
reports its lowest ever infant mortality rate of 7.2 per 1000 
live births. This is a decline from 60-65 per 1000 live births 
in 1960, and puts Cuba on a par with most of the so-called 
``First World'' countries as well as making it number one in 
all of Latin America for the lowest infant mortality rate.
    In the area of children with special health problems, 
similar efforts have been made to respond to these conditions. 
Children and youth who suffer from diabetic and respiratory 
problems whose condition has been identified by his/her doctor 
are enrolled in programs offering special care and medication.
    During the 20 years I have visited Cuba, as a clergyperson 
involved in humanitarian services, it has been heartening to 
see this commitment to the well-being of its citizenry being 
played out in concrete programs of health care for all.
    On the other hand, it has been deeply disturbing to me to 
see the erosion of the services this infrastructure can provide 
due to the strangulation of the embargo, a situation that has 
been greatly exacerbated by the
    In the area of maternal and child health, the food embargo 
has caused an increase in maternal malnutrition. The number of 
expectant mothers needing internment in the Maternity Homes has 
greatly increased in the last five years, and there has been a 
marked increase in the incidence of low-birth-weight babies.
    In terms of healthcare, babies born prematurely are 
especially vulnerable. For example, the American Association 
for World Health Report states: ``Cuba received 25 Preemicare 
Model 105-4 Neonatal Respirators as a donation, but the embargo 
prohibits sale of spare parts, accessories and provision of 
services to train specialists in their use.''; thus these 
donated respirators are in effect unusable.
    Immunization for childhood diseases is a global goal 
established by the World Health Organization in its program 
``Health For All'' and by UNICEF in its Plan of Action of the 
World Summit for Children. Cuba's immunization program includes 
11 infectious diseases. However, its program of immunization 
suffers from fuel shortages to transport vaccines and power 
outages which cut refrigeration. Though Cuba produces all of 
its own vaccines except for polio, domestic production remains 
vulnerable to embargo-related shifts in suppliers. Since 1992, 
mergers of U.S. companies with third-country companies have 
resulted in sudden cancellation of contracts for vaccine 
production inputs.
    In the Family Doctor centers I visited in the Sierra 
Maestra, on the Eastern end of the island, dedicated doctors 
manned centers equipped with examining table, refrigerator and 
other equipment, but with only a handful of medicines on almost 
empty shelves. The contrast was sharp--the knowledge is present 
but the ability to make meaningful use of it is lacking.
    Children suffering from asthma are in a similar situation. 
Cuba has one of the highest incidences of children with asthma, 
with over 14% of the children showing some degree of the 
problem. Cuba has made an effort to produce medicines for 
asthma. But it cannot provide certain types of medication that 
function only with a respirator which must be imported. 
Children with diabetes have benefitted from large donations of 
insulin from the U.S. and other sources. But dependence on 
donations is an insecure lifeline.
    On every front, humanitarian aid alone is unequal to the 
task of meeting the need for pharmaceuticals in Cuba.
    Also of concern to many of us is the psychological impact 
of hunger on children.
    It is well documented that the physical aspects of hunger, 
while important, are not the only consequences of prolonged 
hunger. Studies done during periods of famine, such as those 
experienced in Ireland in the 1840s and in Russia in 1917-18, 
clearly demonstrate that prolonged hunger has a psychological 
impact which leaves a lasting impression on the human psyche.
    Cuba has compensated for the shortage of certain foods by 
rationing and targeting of what food it does have to special 
age groups. Children have been designated as primary recipients 
of such foods as milk. A retired U.S. Marine Corps general, in 
an article in the Washington Post on Saturday, May 2, says, ``I 
talked with mothers who wondered what will happen to their 
children when they reach the age of seven and the family loses 
its milk allotment.'' This comment only begins to reveal the 
stress and dilemma suffered within family units due to food 
shortages.
    In conclusion, it is inhumane for a democracy such as the 
United States to apply an instrument such as an embargo which 
universally and adversely impacts the civil population of a 
country.
    Steps should be taken now to identify with the Cuban people 
and to demonstrate to them the values which Franklin Roosevelt 
claimed as the basic rights of all peoples--freedom from want, 
freedom from fear, freedom of religion and freedom of speech. 
We cannot promote these four freedoms for the people of Cuba 
when we participate in the denial of their most basic needs.
      

                                


Statement of Maria de Lourdes Duke, President, Fundacion Amistad, New 
York, New York

    In my role as President of Fundacion Amistad, and as an 
officer, supporter and long time consultant with The Harbor for 
Boys and Girls of East Harlem, it was extremely interesting for 
me to see on a first-hand basis the services offered to women 
and children in Cuba. It was also of great personal 
satisfaction to me to bring together an outstanding group of 
individuals, eight women and one man, to add their own 
professional opinions and expertise to the visit.
    The delegation had three main purposes:
    1. To provide a report on its findings that can be widely 
distributed.
    2. To provide meaningful input to U.S. government officials 
and Members of Congress in support of humanitarian relief for 
Cuban women and children.
    3. To use its collective networks with other NGO's and 
nonprofits to collaborate on additional seminars, visits, 
relief services, and other identified needs. These will be, in 
part, coordinated through Fundacion Amistad.
    The delegation to Cuba, March 8-15, l998, began an 
assessment of the condition of a representative sample of Cuban 
women and children, in the areas of health care, education, 
social services, and the status of women. In addition, 
identifying the mental health needs of children and adolescents 
was also a high priority. Finally, the role of several non-
governmental organizations were observed.
    Our timing was intended to occur after the historic visit 
of the Pope, to see if the enormous press coverage and actual 
changes brought about in Cuba for his visit would provide the 
promise of more lasting and substantive changes in the way of 
humanitarian concerns.
    Throughout our visit, we observed Cuban pride, its sense of 
its own rich cultural history, and a deep concern for women and 
children. However, the absence or lack of up-to-date equipment 
and supplies struck us all as being a problem to efficient 
handling of the needs of the women and children of Cuba. 
Despite the remarkable emphasis of the Cuban government on the 
needs of young children, the lack of supplies is harmful.
    The children themselves were alert and displayed all kinds 
of abilities, and quickly took advantage of the small gifts and 
supplies we brought to the centers. The teachers were deeply 
appreciative and literally begged our group ``not to forget 
us--your visit gives us strength'' and to send along additional 
needed items such as children's Tylenol.
    This kind of personal contact at such a professional level 
can only enhance good will and practical relationships between 
groups from the United States and Cuba. The negative 
stereotypes between both groups are ameliorated by such 
personal visits, and particularly by those visitors who bring 
vitally needed materials at this critical time in Cuba.

                          Delegation Summary:

    Cuba has an extraordinary system of free and available education 
and health care. In a population of 11 million, there are 60,000 
doctors, or one doctor for every 150 people. Even today, the small 
island nation compares favorably in these areas to most developed 
countries. The infant mortality rate is low, literacy rates 
impressively high and the maladies that effect both the developing and 
developed nations, (death by curable disease, extreme poverty, crime, 
and drug abuse) remain diminished.
    In Cuba today, reduced resources now make it impossible for a Cuban 
citizen to live from a month's supply of government rationed food. In 
order for the average person to survive, extras must now be procured 
with American dollars. The peso now hovers at around 25 to the 
dollar,and the average professor's wage is about $10 a month. Aside 
from those fortunate enough to work in Cuba's tourism industry 
(waitresses, bell hops, cleaners, taxi drivers etc.), everyone we met 
who was willing to discuss the issue had been forced to take on a 
second job. Hence university professors become cake bakers by evening, 
research scientists become taxi drivers; and almost everyone with a 
room big enough--film makers, teachers, engineers and scientists--
become amateur restaurateurs.
    With the recognition of the American dollar as legitimate currency, 
monies sent from family members and friends of native Cubans in the 
United States have helped to ameliorate the sinking standard of living 
of the average Cuban citizen. It is even suggested that such personal 
subsidies provided the single largest block of hard currency to the 
Cuban government with estimates ranging up to $800 million per annum. 
As a professor-turned-baker with no foreign based relatives told us one 
afternoon: ``The American money helps not just the families who receive 
it, but all of us. When I bake a cake, I sell it only for dollars. Most 
often the cake is bought by families with money from the states. I then 
spend that money in exchange for soap or cooking oil. In this way the 
money passes from hand to hand and helps many more people to live than 
the initial relatives themselves.''
    However, the scarcity of basic items such as food, medicines, 
clothing, paper and cleaning materials means that prices remain almost 
unattainably high to the average Cuban citizen. One eighty nine year 
old woman told us that she couldn't remember the last time she had seen 
a piece of fruit. Then she quickly corrected herself and added: ``Well, 
I have seen them of course, but I have not been able to eat them 
because of the price. Dollars are very expensive.''
    Lack of basic materials is dramatically inflicting damage to Cuba's 
social, medical, and academic infrastructure. Though it is still 
illegal to be unemployed in Cuba, guaranteed employment is a thing of 
the past, and as the Cuban people are left increasingly to fend for 
themselves, so the once vaunted advances in education, and health care 
are visibly beginning to deteriorate. Already many university 
professors, doctors and scientists have left the country. Others are 
leaving their jobs for the more profitable tourist oriented trades. 
University places are shrinking, medical facilities are crumbling, and 
the once grand general educational system--whose students are now 
forced to share long out of date text books and scraps of recovered 
paper--is in danger, quite literally, of disintegrating. It is our 
opinion that the current, well educated, Cuban work force can not last 
much beyond a generation under the present circumstances. Cuba's highly 
skilled work force is a genuine and legitimate national resource, and 
we feel strongly urge that changes occur to prevent further 
disintegration.

Conclusions and Recommendations:

    The delegation observed a devastating lack of supplies and a 
weakened infrastructure in the areas of health care, day care, and 
education. The delegation recommends the American Embargo on Trade to 
Cuba be lifted. The delegation also recommends increased cooperation 
between NGOs to deliver necessary supplies to Cuba.
    Over the part five years the average caloric intake in Cuba has 
fallen from 3100 calories per adult per day to 1800. Meat, fish or 
other protein sources are scarce and preventable disease, including, 
for example, the outbreak of Neuropathy with resulting temporary 
blindness in 50,000 adults, was documented between 1992-93 due to lack 
of B vitamins and sulfur containing amino acids.
    General and wide spread shortages of medicines, especially 
children's Tylenol, vitamins, antibiotics, steroids, 
chemotherapeuticals and technological equipment have greatly reduced 
the effectiveness of the medical system.
    Lack of basic necessities such as paper, disinfectants and bed 
linens are undermining effective hospitalization, and access to up to 
date medical information is also hampering effective medical treatment 
of Cuban citizens.
    Lack of paper, pens, crayons, linens, bandages, toys, and cleaning 
materials (detergents, soap etc.) have seriously impacted the state of 
child care and education in Cuba.
    In schools, shortages of building materials have led to overcrowded 
classrooms in substandard conditions. There is a dramatic shortage of 
paper, pens, chalk, copying equipment and other materials. Computers 
are rarely seen. Out of date textbooks are shared by as many ten 
students at a time, even at Cuba's most elite schools and a lack of 
sufficient food supplies mean many children arrive at school without 
having eaten breakfast.
    The delegation observed the need and desire for more interaction 
between American and Cuban professionals in the fields of education and 
medicine. The delegation urgently recommends that the United States 
government increase educational and professional exchanges between the 
United States and Cuba.
    Cuban physicians, though well trained, lack access to the latest 
research and techniques in their fields. Greater interaction with US 
colleagues would expand knowledge in the medical communities of both 
countries.
    Cuban mental health professionals espouse a sophisticated, 
multifaceted approach to the treatment of children and adolescents, yet 
lack necessary supplies. An exchange of research and aid would be 
beneficial to both countries.

                      Education/Child Care in Cuba

Day Care

    Children are of utmost importance in Cuban society. They 
are considered national treasures and are given priorities 
throughout their young lives. Child care is one of those 
priorities. There currently exists a three tier system for the 
delivery of child care services in Cuba: Formal; Informal; and 
Familial. There are tremendous variations in the quality of 
care in each of these systems. We visited four formal ``circulo 
infantile'' child care centers, three just to walk through and 
one for a more comprehensive visit.

History

    In the early 60's, the State began to build facilities with 
a capacity of 120 young children and no infants. These centers 
are still operating; while we were told there were perhaps 200 
centers like this built, the actual number was just a guess. 
During the mid 70's, the State built an additional 200 centers 
for approximately 200 children each, this time including 
infants. In 1989, an additional 50 new child care centers were 
constructed, for infants through preschoolers. While all of the 
other centers were of similar physical construction, each of 
these centers were unique in terms of size and shape but they 
were all large (175-200) capacity.

Current Situation

    There are approximately 135,000-150,000 births a year in 
Cuba. Since all family members now must work, about 500,000 
child care slots are needed. There is an extreme shortage of 
slots in the State-run formal system; some say only 20% of 
actual needed space exists. This shortage forced a change in 
the system: child care services used to be provided from age 
three months to six years. Now care starts at six months. 
Mothers get up to one year maternity leave but only three 
months is paid leaving a gap of three months for all parents, 
whether in formal or in informal settings--to find care for 
their children. Anecdotal evidence suggests such a severe 
shortage that it is now necessary for both parents to bring 
letters to the circulo infantile stating that they are working 
and specifically that the mother is working in an education or 
health related field.
    It is anticipated that there will be a decrease in the 
already low (less than 1%) birth rate. This is a very highly 
educated population with total access to birth control that is 
faced with harsh economic circumstances and severe housing 
shortages. This group will postpone beginning or increasing 
families' size for as long as possible in anticipation of some 
change. Most families live in multi-generational settings with 
women retiring early to take care of their grandchildren so 
that their daughters and/or daughters-in-law can continue to 
work. This system will work for this generation, but probably 
not after that since the women in question will be at the 
height of their careers and the leaders in their fields when 
their children need child care.

Overall Summary:

    Formal System.--There currently exists an outstanding 
infrastructure within the formal network of child care centers. 
The staff was extremely well educated and undergoes continual 
training. The class room supervisory ratios were extraordinary, 
and there exists age appropriate groupings of children in warm, 
friendly environments. The health practices were excellent with 
both doctors and nurses on site; this health care is integrated 
into the local primary health care system. Hearing, eye, and 
dental exams were overseen by the medical staff at the child 
care center site. There were outstanding classroom health 
practices: including, individual toothbrushes, individual 
personal towels, individual potties, showers in the bathroom 
areas. The center provides clothing for all of the children; 
they change into these clothes upon arrival and all clothes 
worn by the children in the center were washed every day. Meals 
were served in family style.
    There were, however, some very severe problems including a 
lack of very basic materials--both sanitary and program 
related. There was no toothpaste, no hand-washing soap, no 
toilet paper, no mops, sponges, etc. There was very limited 
food, even though the children get priorities. They were 
totally without any teaching materials: books, paper, pencils, 
paints, toys, etc. The teachers hold up old flash cards in 
front of the classroom to teach colors and shapes. The physical 
plant was deteriorating. There were no light bulbs and 
overcrowded rooms. Despite a strong on-site medical presence, 
there was no sick child care.
    This fee for this type care is based on income and ranges 
from 40 pesos per month (about $1.50), which is what most 
people pay, to a maximum of 80 pesos a month. The fee was 
standard regardless of the age of the child, and includes food 
and diapers.
    Informal System.--This system resembles an unlicensed 
version of our family day care system in that several children 
were cared for by a woman in her home. There was no regulation 
or licensing by the State (which was, in and of itself, amazing 
since everything else was totally regulated). The homes were 
usually much too small to accommodate any additional children 
as several generations of one family were usually already 
crowded into a few small rooms. In general, there was no 
specialized equipment or educational materials. Since there was 
no regulation by the State, this becomes the parents' problem. 
This type of care costs approximately 80-100 pesos a month, 
plus food and diapers, for each child.
    Since there was no licensing, the provider pays no taxes 
and is able to keep all of the money which is a real incentive 
to keep this system unregulated. However, in an effort to 
upgrade the quality of care provided in these type settings, 
the nearest circulo infantile often sends a team of teachers 
and health care professionals to these homes to provide some 
training materials and basic guidance to the parent in charge. 
This is done on an informal basis.
    Familial.--This system was exactly what it implies--a 
relative or close friend or neighbor watches the child while 
the parent works. It may or may not involve some form of 
payment. There was a facility within each community for use as 
a resource for these care givers. This facility has a playroom 
and some professional staff who can offer advise and 
assistance.
    Details of Visit.--What follows is a summary of our visit 
to the Circulo Infantil los Ninos, ``Suenos del Che,'' 
established in 1989. The Director was Rodolfina Varna. The 
center serves 193 children from six months to six years and was 
open from 6a.m. to 6p.m. five days a week. There were 24 
teachers and educators; 15 support staff (cleaning staff, 
laundresses, cooks); 1 doctor and 2 nurses. The Director has 28 
years experience, 9 in this center. Each classroom was headed 
by a teacher with a university degree who earns 300 pesos a 
month. The assistant teachers earn 150 pesos monthly. The 
Director earns a little more than the head teachers. Secondary 
school students who were interested in pursuing degrees in 
early childhood education can intern in a center for a full 
month during their last year as well as part of each school 
week. There were no male teachers working in any child care 
center in Cuba. (There were male primary school teachers, 
however.)
    The State provides two snacks and lunch each day. The 
Director claims they were short of protein but on the day we 
visited, they seem only to be missing animal protein, which 
Cubans believe is essential. There were outstanding medical 
health records on site and a total integration of the school 
and family health system.
    The age groupings of the children were: 6 months to 1 year; 
12-24 months; 2, 3, 4, and 5 years. Immediately on arrival, 
each child changed into clothing owned by the center and back 
into their own clothes when they left. The center's clothing 
was washed every day. This system may not still exist in all 
centers as there was now an extreme shortage of clothing. Cloth 
diapers were provided and washed on site as well.
    The bathrooms were old but very well laid out, with each 
including two small showering areas for the children. In 
addition to pediatric toilets, each child had a personal potty 
for toilet training, as well as a clearly identified toothbrush 
and towel. For those children who were too young to read, 
easily recognizable symbols or pictures were used. There were 
few toys and they were clearly inadequate for the number of 
children and many were broken or missing parts.
    The classrooms were sparsely furnished and the furniture 
that was there was well worn and occasionally broken. The walls 
had some commercial pictures up, but no projects made by the 
children were visible. The physical layout was problematic with 
possible head entrapment area in the rooftop outdoor play yard 
fencing. Termites had eaten the large wooden doors that covered 
entire sides of the classrooms and so the rooms were open onto 
an indoor play area and therefore quite noisy. There were no 
play structures inside or out and cement floors throughout the 
entire area. There were no soft areas anywhere.
    Despite the fact that there were severe shortages of all 
consumable goods:(no paper, pens, crayons, linens, bandages, 
soaps, etc). the staff was highly motivated and doing an 
excellent job without any materials. The children seemed 
engaged and friendly and there was an outstanding teacher to 
child ratio. At times it was amazing how many adults were in 
each classroom. Students on work-study made up many of the 
personnel. This compensated somewhat for the physical 
limitations of the facility and the lack of materials in the 
classrooms as well as contributing to the positive interactions 
in the classrooms.

Primary and Secondary Education:

    Our delegation visited several education centers, including 
one of the most selective and demanding secondary schools in 
the country.
    Children in a child care setting get a good start on their 
elementary school education both from the socialization that 
exists for young children and from the professionals under 
whose care they are included. The songs they learn, the group 
activities, and the sharing of even the limited number of toys 
and learning tools have already helped them for future 
learning.
    Primary School.--The primary school that was visited--
Hermanas Giral--was in a building that had been a magnificent 
private home before the revolution. Now there were 392 children 
in this school in 13 classrooms. Primary school children wear 
red pants or skirts, white blouses or at least white collars, 
and a blue scarf. Children between the ages of 5 and 15 were 
called Pioneers. The 1st grade classroom in which we spent much 
of our time had 36 children and only one teacher. She had their 
total attention, and though they were crowded into this 
classroom (ideal circumstances would have held no more than 18 
children), there was no problem of discipline or learning. All 
these children can read by the middle of their first year. A 
look at their writing and writing books showed that their 
letters were clearer than most 3rd grade students in this 
country. They were fully focused on their work. If any child 
was having problems with writing, the classroom teacher worked 
with that student individually after school.
    At the request of the child psychologist in our group, each 
child was asked to draw what he or she wanted to be as a grown-
up. The response was instant. Each child began drawing with 
fervor. Ballerinas, baseball players, astronauts, and teachers 
were the favorite occupations with very imaginative drawings. 
Children told what their mothers didC mostly professionals such 
as doctors, dentists and teachers. The children loved the 
drawing project, particularly when left with additional paper 
and crayons and pens for their own uses.
    There was an active Parents Council at the school and one 
of the mothers chairs the Council. It meets monthly. There were 
health professionals at the school and a dentist comes on a 
regular basis. The students begin learning English at this 
school in the 5th and 6th grades, the last two years of 
elementary schooling. Other schools now start English earlier. 
Until the breakdown of the Soviet Union, Russian was the other 
language taught. The phonic method for reading was the one 
recommended, but teachers were allowed to use any method that 
works for them and the children. They learn to read first and 
then to write. There are no standardized tests in the school 
until the 6th grade when students are tested in Math and 
Language for placement in their new schools.
    One of the interesting teaching philosophies, at least at 
this school, was that the same teacher stays with a class from 
kindergarten through the fourth grade. This may explain why the 
children seem so comfortable with their teachers and also why 
they were reading and writing so well at an early age. As more 
specialized subjects are introduced in the 5th and 6th grades, 
children are less likely to have the same teachers at that 
point in their development.
    Classes begin at 8:10a.m. and were 45 minutes long. If 
mothers are at home, children go home for lunch. If mothers are 
working, children stay at school and are given lunch. They all 
bring snacks. For working mothers, there was someone at the 
school every day from 7:00a.m. until 7:00p.m. Evening hours 
were spent playing and in group activities. Every two months 
there was a parent-teacher conference. Hermanas Giral school 
has only four computers (very old ones using ancient television 
sets as monitors), and computer classes don't start until the 
5th grade.
    The library was pitiful. It has almost no books, and those 
it has were very old. The children, nonetheless, love to come 
and check the books out. They were encouraged to do this but 
could be much more so if more books were available. The staff 
at the school seemed excellent, thoroughly professional, proud 
of the school and their students, and happy to be working in a 
school.
    Secondary School.--We also visited the Lenin School for 
Science and Technology, a 3 year boarding school for extremely 
advanced students. It was a highly selective school which takes 
only the brightest and best from the Havana district. Entrance 
was based on tests in Language and Math and on prior school 
records. Only one in three applicants makes the cutoff. There 
were 3048 students currently, 300 teachers and 600 staff. The 
students were bussed to and from the school every week. One 
week they were there from Monday morning to Friday night and 
the next week until Saturday night. There were two girls for 
every boy in the school, and the main subjects taught were 
math, chemistry, biology and physics. There is one school like 
this in each of the 14 provinces, but the Lenin school was the 
most prestigious, although the students are also from the most 
privileged families. Most of the students go on to universities 
and many into professional life. The school year starts on 
September 1 and goes till the end of June. If a student fails a 
class, it is made up in July. There was a hospital close to the 
campus with 6 doctors and psychologists available to the 
students. There was an 86% retention rate, with a goal to 
improve this figure. Students get up at 6:00a.m and lights are 
out at 10p.m. As at the elementary school, parents were active 
and meet with teachers every two months. Half the day for 
students was spent in the classroom, and an equal amount of 
time was spent working and doing chores. We observed a group of 
students painting cabinets for an exhibit in their natural 
history library. The chores vary from cleaning to working in 
the fields surrounding the school and students rotate their 
chores.
    In the past 24 years, the Lenin School has had over 20,000 
students. Of the medical students in Cuba, 85 to 90% come from 
here. Some of the graduates have come back to teach and many 
come back to visit. We met with two leaders of the Student 
Council. These boys were very impressive. We asked one if he 
would consider politics and he adamantly said ``no.'' We found 
this interesting, later, when we discovered he was the son of a 
high ranking government official. The boys described the 
Student Federation which has three units, one for each grade. 
When asked what they liked best about their school, they 
mentioned their teachers, the quality of their education, 
living with the other students, and the challenges of the work. 
When asked what they liked least, they missed homes and 
families, disliked the food, and said there were some behavior 
problems with students. There was an enormous amount of 
pressure their final year in terms of testing for the 
university level, but the school helps prepare them all 
semester, so it was easier when they finally take the tests.
    There were only a few very old computers at the school. In 
spite of this, the Lenin team has won at the Computer Olympics. 
Each student was given one pencil a month and textbooks have to 
be shared among ten students. There were usually 33 students in 
a class. While athletic teams for both sexes were very popular, 
sports equipment was very scarce, and there was an enormous 
need for baseballs, bats, and soccer balls.
    As in the elementary school, the motivation and dedication 
of administrators, faculty and students seemed superb. The 
principal of the school has been there many years and was proud 
of his students and his faculty, and very willing and candid to 
answer questions.

Comments and Recommendations:

    It was clear that the educational system was outstanding, 
given the lack of equipment and supplies. No one has paper, so 
even if there were Xerox machines, there would not be the 
possibility of copying anything. We learned that there were 
special schools for other subject areas, but it did seem that 
science and math were the most competitive areas of the 
schools. Others outside the schools talked about their own 
educational experiences and that of their children. Though the 
classes we saw were mostly teacher led from the front of the 
classroom, we were told that cooperative learning exists and 
was very much part of the learning scheme.
    In order to make any recommendations on educational 
philosophy and pedagogy, one would have to spend much more time 
in a school than we had during our visit. We have no 
recommendations to make on a philosophical level. We do feel 
that these teachers and students need to have adequate 
materials with which to work. We believe that this country 
should contribute and coordinate efforts through an 
international organization to get supplies and textbooks to 
Cuba.
    Though class sizes were large, they were not any larger 
than in many schools in other countries. The delegation 
congratulates the Ministry of Education on the rate of literacy 
in the country (over 95%) and on the ability of teachers to 
teach and students to learn in far from ideal situations.

                   Child Health/Mental Health in Cuba

          ``Cubans in their first year of life get medical treatment 
        like those in the First World. Those older, like 20-year-olds, 
        are treated as if they live in the Fourth World.''
                                   --An anonymous physician

Medical Health

    History.--Cuban health care is a system of free and 
accessible medical attention for every citizen. Since 1992 the 
quality of their health care delivery has been severely 
compromised by the fall of the Soviet Union, the Cuba Democracy 
Act (CDA) and the Helms-Burton Act. The CDA provides for the 
sale of food and medicines to Cuba, but under conditions so 
strict as to de facto prohibit them. The Helms Burton Act 
prohibits U.S. suppliers from attempting to trade medical 
equipment with Cuba.
    The country is still able to report some of the best 
indices of health in a setting where obtaining the most basic 
medicines can be a challenge. The Cuban government has made 
health care a nationwide priority by increasing its spending 
from 10% of the GNP to 15%, according to the Ministry of 
Health, since the reduction in Soviet aid. Despite efforts to 
ration precious resources to the populations most in need, Cuba 
suffers from a lack of food, medicines and access to medical 
information. A unique dichotomy exists between a well designed 
health care system, and a miserable scarcity of resources. The 
situation demands a reevaluation of the economic forces that 
are compromising the health of the Cuban people.
    Current Situation.--Despite an excellent infrastructure in 
place to provide health care, which includes a surplus of 
educated doctors and accessible providers, Cuban doctors have 
few pharmaceutical options for treatment of diseases. State 
officials claim that they can access medicines in moments of 
dire need. All the doctors, however, to whom we spoke cited 
shortages of antibiotics, steroids (basic treatment for 
asthma), chemotherapeuticals (for cancer), and technological 
equipment. Because of the embargo, we were told, medicines cost 
300-500% more than they would if they were directly traded with 
US companies due to increased licensing and transportation 
costs. For example, a drug called prostaglandin, a life-saving 
drug for newborn infants with heart disease, costs about $50 
per dose in the US, but $250 in Cuba. Thus the government is 
not able to afford to keep newborns with these conditions 
alive. The government demonstrates interest to buy the 
medicines, but over 90% of all medicines available worldwide 
are manufactured in the US, and the Cuban economy cannot afford 
these costs. To control costs, Cuba has learned to make its own 
medicines, and they are able to manufacture 92% of the 
medicines available within Cuba. Despite this, they cannot make 
sufficient quantities, especially since they can no longer 
obtain the raw materials from the Soviets.
    Because pharmacies are bare, patients and doctors turn to 
humanitarian donations for support, but this is a fluctuating 
and unreliable source. One week a simple urinary tract 
infection may be cured by outpatient management with 
antibiotics, whereas the same disease a week later may be 
fatal. Likewise, the Helms Burton Act prohibits the country 
from obtaining medical supplies and parts for equipment. Some 
intensive care units are well stocked with many ventilators, 
but they lack critical parts that cannot be replaced. Children 
and adults cannot maintain adequate health in a setting that 
cannot provide basic medicines. Cuba has many highly educated 
doctors who want to help, but they are unable to practice the 
medicine that they were trained to do. One doctor lamented ``we 
are able to diagnose most problems, but are powerless to 
provide the simple medicine to help cure.''
    Nutrition is another aspect of health that has been 
dramatically affected by the Cuban Democracy Act. The Cuban 
government, unable to trade with old allies or nearby 
neighbors, has responded to this crisis by preferentially 
providing better quality food to those with the highest need. 
For example, only pregnant women,breast feeding mothers, and 
children under seven can get milk. Likewise, sources of protein 
and iron are scarce, as their ration cards afford no red meat 
or leafy vegetables, and contain little soy. According to 
OXFAM, the average caloric intake has fallen from 3100 calories 
per day to 1800 over the past five years. Furthermore, an 
epidemic of neuropathy, with resulting temporary blindness, in 
50,000 adults was documented between 1992-3 that was due to a 
lack of B vitamins and sulfur-containing amino acids. As Dr. 
Francisco Valdes Lazo, the Director of Maternal and Child 
Health, bluntly stated, Athe country is starving.
    Maintenance of a clean water supply has become a major 
problem. The equipment used to chlorinate and purify drinking 
water is breaking down for lack of spare parts which can only 
be obtained in the US. The result is a marked increase in water 
borne diseases, dysentery, parasitic disease and hepatitis.
    Information is another scarce resource. Because of the 
profound lack of supplies and its political isolation, Cuba 
cannot exchange critical medical knowledge with the rest of the 
medical world. Internet access, a standard of care in modern 
medical facilities, is just being introduced in a few hospitals 
and polyclinics. Distribution of internet access may be slowed 
by both dollar and political reasons. Confounding the problem, 
Cuba lacks a fundamental product--paper--to print or photocopy 
materials. One doctor showed a torn and faded document on 
Pediatric Intensive Care that he claims doctors around the 
country beg him to borrow for one hour. The doctors are 
isolated from new advances and experimental therapies.
    Conversely, the US and the rest of the world cannot benefit 
from the knowledge and research the Cuban doctors perform. For 
example, almost all Cuban babies are born in hospitals, and the 
placentas are then used in experiments for therapies and 
medicines for skin diseases, a technique not used in this 
country. This could provide the medical world with valuable 
information. Also, at least 15,000 children from the Ukraine, 
exposed to radiation from Chernobyl, have flown to Cuba to 
receive treatments for diseases ranging from leukemia to 
vitilligo. The Cuban doctors have not been able to publish any 
of this critical data, again because of a lack of resources.

Child and Adolescent Mental Health:

    The delegation visited the Adolescent Mental Health Clinic 
in Havana, for children and teens. This self-standing facility 
established in l975 is unique in Cuba, as mental health 
services are usually attached to the pediatric/adolescent wings 
of provincial hospitals. A plan for proliferating the 
Adolescent Mental Health Clinic model in every province has not 
been realized due to a lack of funds. The Clinic is an 
inpatient and outpatient facility, taking cases from Havana and 
its immediate environs as well as difficult cases that cannot 
be handled at the local level. While we learned a great deal 
about the Cuban psychiatric system from the doctors at the 
clinic, it should be made clear that we did not visit any other 
facilities or investigate adult psychiatric care.
    Although there is a deep knowledge and respect for Freud 
and other prominent theorists, the philosophy informing child 
and adolescent mental health is largely practical, eclectic, 
and quite sophisticated in its varied approaches. The Cuban 
system, as we saw it and heard it discussed, can be described 
as community psychiatry at its best. The Mental Health Clinic 
we saw is inventive and adaptive with the treatment it offers. 
Both individual and group therapy, as well as drug therapy, are 
used. In addition, academic tutoring and parent counseling are 
generally included in each protocol. The Clinic is highly 
attuned to learning disabilities and sees a child's mental 
health as closely tied with how he or she performs in school.
    The Clinic cultivates a comfortable and caring atmosphere. 
Children's artwork is hung on the walls. Music and sports 
programs supplement treatment. There are no locks on the doors. 
Staff, parents, and patients show kindness and respect to one 
another. The three professionals we met, Drs. Frank, Resell and 
Gutierrez were open, intelligent, and clearly devoted to their 
work. Visits to schools and inclusions of other community 
support systems are common.
    In the inpatient facility, there are twenty-four beds and 
twenty-four day beds. Fifty patients can be accommodated during 
the day, but only twenty-two at night. Parents sleep in rocking 
chairs next to a child's bed. The average inpatient stay is 45 
days. There is a comprehensive 24-hour intake process, with a 
professional on site at all times.
    With outpatients, the staff of the clinic works in teams, 
assigning a doctor, a social worker, and teachers to a case. A 
team approaches a case multilaterally, combining nursing, 
occupational and rehabilitation therapy, neurophysical 
examination and treatment, alternative medicines, and speech 
therapy, when needed.
    Throughout the Cuban system, work with parents is deemed 
critical and is a core treatment support. The doctors we spoke 
with were quick to cite a recent research project in which 
three treatment methods were studied: working with a child in 
isolation, working with parents in isolation, and working with 
parents and children together. The final group had the greatest 
rate of success. At the clinic, parents are required to 
accompany their child through the outpatient and inpatient 
process. (It should be noted that any parent of a hospitalized 
child is paid the his/her employer to take time from work to be 
with the youngster.) Social workers also work with patients 
beyond the walls of the clinic. They travel to a patient's 
home, school, neighborhood, and to the work center of the 
patient's parents. These outreach efforts on behalf of families 
and treatment providers form deep connections between them, 
which is extremely beneficial to the child under their care.
    Knowledge of psychopharmacological treatment is very 
sophisticated among the clinic's staff. Everyone, however, we 
spoke to was frustrated by the devastating lack of access to 
medications and current research. There are no medicines such 
as Prozac or Zoloft. Ritalin, Dexedrin, injectable valium, and 
anti-psychotics are unavailable.
    Everyone we spoke with at the clinic felt that the stress 
of the economic situation in Cuba was contributing to greater 
familial stress and more mental health problems among children, 
adolescents and families. Low salaries, poor living conditions, 
and difficulty of transportation all put pressure on parents 
that is easily projected onto their children. Divorce and 
alcoholism, both associated with economic stress, directly 
affect the mental health of children and teenagers, and are on 
the rise.
    Many types of pathology seen at the clinic are indicative 
of the economic hardships faced in the country. Depression, 
conduct problems, prostitution, and teenage alcoholism are all 
on the increase. These social disorders are treated with a 
community approach, involving a patient's parents, school, and 
neighborhood, but one can see the beginning of a crumbling of 
the community/family as the economic pressures increase.

Comments and Recommendations

    The professionals met at the Adolescent Mental Health 
clinic were highly motivated, intelligent and dedicated 
individuals who espouse a multifaceted, sophisticated approach 
to child and adolescent mental health. Unfortunately, the 
economic conditions have made it extremely difficult to 
implement the mental health system to its potential. A lack of 
access to medication, research, and basic materials like paper 
and bed sheets, as well as exceedingly low pay for 
professionals have all been damaging. There are many ways 
mental health professionals in our country can support the 
Cuban mental health community and much that our mental health 
professionals can learn from their Cuban counterparts.

             Non-Governmental Organizations (NGO's) In Cuba

    We were interested in visiting non-governmental 
organizations, both indigenous to Cuba and those whose funding 
comes from outside Cuba, to assess the type of services 
available to women and children. Our delegation met with the 
following NGO'S:

The Federation of Women

    One of the oldest Cuban NGO's is the Federation of Women, 
founded in l960 to involve women in the revolutions funded by 
the State. It is the channel to have women considered at the 
highest levels for economic and political considerations. We 
were told that the Women's Federation was the voice for the 
struggle for women's equality.
    ``Women comprise 40% of the labor force in Cuba, 27% of 
parliament, 30% of the leadership in labor, and 65% of the 
skilled labor force,'' said the director of foreign relations 
at the Federation. Women are charged $.25 per month to belong 
to the Federation. In addition to its political role, the 
Federation helps women with family and social problems.
    In 1990 the Federation began a series of community centers, 
called Houses of Guidance for Women and Children. They provide 
legal and social services for women and training, but are not 
battered women's facilities, which don't exist. They are 
staffed largely by volunteers in the community. A visit to one 
found the disconnect surprising between what the expressed 
philosophy is behind the centers, and the reality of the 
situation. All teaching is theoretical, for example, and done 
without supplies. Computer skills are learned not on computers, 
but from instructions written on blackboards.
    The delegation was told that a group of young women had 
come to learn better grooming and hair-dressing skills for 
their own edification. The women, however, told us they were 
really there to learn to do hair-dressing and fixing nails from 
their own homes as quiet and small businesses.

Caritas Cuba

    Caritas Cuba is one of the most influential and effective 
of the local NGO's. It exists in 3000 communities with as many 
volunteers from its Catholic Bishops Dioceses, and has a 
working staff of 30 full-time personnel. It distributes $4-6 
million a year in humanitarian aid which comes from Catholic 
Relief Services in other countries, particularly the US. 
Caritas works carefully through the Ministry of Public Health 
which warehouses its donated supplies, doesn't tax them, and 
delivers them where Caritas instructs.
    Caritas helps rebuild houses damaged during hurricane 
emergencies, and helps rehabilitate farm lands. Caritas also 
develops services for the elderly, and collaborated with 
government programs for a ``Slips and Bloomers'' program to 
provide undergarments, a program which can be used to assess 
other needs of the elderly.
    Because of crowded living conditions, children are often 
left to the streets to play and socialize. Caritas has started 
after-school programs for 5-12 year olds. They also work with 
women on sewing projects, despite a pitiful lack of supplies. 
Caritas was proud to report that it will receive 72 boxes of 
baseball equipment from the Baltimore Orioles, but will have to 
negotiate with the ministry for distribution of this much 
needed equipment.
    ``For NGO's to be successful in Cuba,'' said Rolando 
Suarez, the director, ``they must make decisions based on a 
knowledge of Cuba.''

MEDICC

    A new NGO, MEDICC, Medical Education Cooperation with Cuba, 
is a program of the American Association for World Health. As 
of April, l998, Medicc has begun to offer US medical students 
the opportunity to team up with Cuban health professionals in 
direct contact with patients. Courses are also offered for 
graduate students in Public Health and Midwife Practitioners.
    OXFAM US, Canada and UK has a presence in Cuba with support 
to Cuban groups actively engaged in organic methods of food 
production. It also promotes urban rehabilitation and 
development through community initiatives and the use of 
sustainable and ecological approaches to food production. One 
sees lovely urban gardens flourishing throughout Havana and 
many of these have been funded by OXFAM's efforts.
    UNICEF cooperates with existing governmental programs. It 
is heavily involved with water purification projects, which is 
also a high priority of the Ministry of Public Health. Two 
thousand rural communities have either obsolete or non-existent 
water systems, and water is delivered by the State in trucks. 
UNICEF has partnered with the State to develop a National 
Hydraulic Institute which provides a simple technological 
system of PVC pipes to get underground water at low cost. An 
installation for more than a thousand people costs only $8-9 
thousand for a complete water system. UNICEF also provided two 
desalination programs in Guantanamo and Bayamo.
    In addition UNICEF created a major program to encourage 
breast-feeding and is also a major supplier of the twelve 
required vaccines for infants and children. UNICEF is also 
trying to expand the internet system called Infomed to outlying 
areas for much better communication by and training of medical 
personnel.
    ``A strategic target of all UNICEF's,'' said its director, 
Luis Zuniga, ``is not to be only around with material things, 
but with ideas.''

Comments and Recommendations

    NGO's are an effective and efficient source of supplies, 
training and a link for Cuba for grassroots development 
methodologies. In order to continue to help the people of Cuba 
in their daily struggle, effective NGO's such as Caritas, 
UNICEF, and the new work of the Fundacion Amistad must be 
supported and funded.
    Links need to be made between NGO's to streamline 
efficiency and increase communication about findings to develop 
new programs and enhance existing ones. Simple gatherings of 
like-minded NGO's to exchange information would be a first 
step.

                      The Status of Women in Cuba

    Observations on the status of women in Cuba were provided 
by members of the delegation and by a New York University law 
student, Tanya Southerland.* The NYU law students' objectives 
were to build professional relationships between the law 
students of the two countries for future dialogue and 
cooperation on business and legal matters, and to study a 
socialist civil law jurisprudential system.

Introduction:

    Because Cuba is a socialist country, women's equal access 
to educational and employment opportunities outside the home 
has translated into a workforce in which women represent 42% of 
all workers, 51% of all doctors, and 46% of all scientists. 
Such positive educational and employment opportunities has 
meant that for about fifteen years now, the better prepared 
workers in Cuba are women.
    Women's representation in politics, however, remains low. 
For example there was only one woman on the executive board (of 
five people) of the student bar association at the University 
of Havana Law School, in spite of the fact that the majority of 
law students are women. Dr. Marta Nunez, a professor in the 
sociology department attributes this phenomenon to women's 
personal choices. Political positions entail more 
responsibility, but no more pay. Women who still carry 
disproportionate domestic responsibilities, do not want the 
extra work burden of political life.
    A professor in the law school stated that while equality 
for women outside the household is understood as a given, 
inside the home, fewer strides toward equality have been made. 
And this in turn restricts women's ability to undertake time 
consuming ``third careers,'' such as political positions.
    The Cuban government has attempted to address this 
disparity through the Cuban Family Code of l975, The Family 
Code established equal inheritance rights between children born 
in and out of wedlock, and it formally denounced ``machismo'' 
and encouraged men to share domestic duties, including actively 
rearing children.
    In 1975 when the Code was passed, men spent only thirty-
eight minutes per week on household chores. More than twenty 
years later, the time spent has increased some, but not 
remarkably, experts say.

Education

    Philosophically there is no priority given to either boys 
or girls in the classroom. Boys and girls were evenly 
represented throughout the classes we witnessed (in one high 
achievers high school, one elementary school, one pre school, 
and one day care center).
    Boys and girls at the high school level in the school we 
visited, enjoyed academic success (and failure) at rates 
proportionate to their matriculations--a nearly 2:1 female to 
male ratio. Though girls held leadership positions, it was not 
in proportion to their dominant numbers.
    At the university level, girls and boys appear to continue 
to enjoy parallel success and failure. Women's Studies is an 
accepted part of the curriculum and women are integrated into 
every subject matter. Women major in science and math subjects 
at the same--if not higher--rate than men. In fact, two years 
ago affirmative action for men applying to medical school was 
instituted to balance the nearly 80% women medical residents.
    The economic difficulty of the times, however, is forcing 
women and girls back into their more traditional roles such as 
caring for the young, sick and elderly, despite the benefits of 
free education.

Women's Reproductive Health

    Access to contraceptive care is free and, due to the large 
number of family doctors, theoretically accessible. If they 
were available at all, the entire range of barrier methods, 
hormonal contraceptives (including implants, injections, and 
pills) and surgical devices are available to all Cuban women, 
Recently availability has been sporadic at best. Condoms (the 
only method of pregnancy prevention that also protects against 
HIV infection) are exceptionally difficult to obtain and the 
IUD and sterilization are the most popular forms.
    Abortion is also a popular form of contraception. 
Termination is available until the 10th week of pregnancy and 
is free of charge. Minors (girls under 18) need the permission 
of a parent, but this is rarely enforced. The National Center 
on Sexuality has undertaken a carefully orchestrated, 
thoughtful, and widely visible campaign to lower the number of 
abortions by such efforts as increasing awareness of birth 
control methods. Abortions constitute 62% (2.9 million) of the 
number of live births (4.7 million) in statistics reported from 
1968-1992. The majority are performed on the age group 15-19.
    Women's experiences in childbirth are overwhelmingly 
positive and healthy. The Cesarean rate is an internationally 
recommended 16%, the vast majority of women breast feed, and 
new mothers can remain in the hospital for several days. (Women 
giving birth, however, are asked to bring with them the most 
fundamental of supplies, such as light bulbs, sheets, and pans 
in which to bathe.)

Women in the Sex Tourism Trade

    The vast majority of the skilled labor force is composed of 
women (65%). In addition to traditional service oriented jobs 
such as chambermaid and secretary, women are doctors, 
professors and administrators.
    With the increase of tourism to the island, sex tourism has 
become an issue in Cuba. Prostitutes, however, rarely operate 
professionally. Most are young women who hold regular jobs 
during the day, and who desire visits to nightclubs, gifts of 
clothes, drinks, food and access to restaurants, which 
otherwise are inaccessible to Cuban citizens, male or female. 
Many of the prostitutes are under sixteen. Some are encouraged 
by their families in their pursuits, even to marry foreigners. 
Such marriages must be made with the assistance of the state 
which charges a fee for each ceremony performed. Prostitution 
is not illegal in Cuba through recently, pimping as well as 
less formal encouragements to prostitution have been made 
illegal.

Recommendations

    With the increase in tourism to Cuba, there will be more of 
an opportunity for small, women-owned businesses to produce and 
sell products and services with great success. Enterprises such 
as hairdressing and baking not only require few resources and 
elementary training, but they are also occupations well suited 
to women of all ages and various family responsibilities. 
Supplies should be made as widely available as possible.
    The importance of sports to develop girls as confident, 
healthy, equal members of society is well known in the US. Many 
people in Cuba explained that there is a lack of organized 
activity for children beyond the school day. While baseball is 
the national sport, it is predominantly for boys, as is soccer.
    There are many ``girls'' sports which require little space 
and equipment such as double-dutch jump roping, cheerleading, 
dancing and running. Such sports have a beginning, middle and 
end each year and require little in the way of resources. Local 
NGO's already initiating such programs should be supported.
    There is an intellectual isolation in Cuba due to a lack of 
books and paper with which to publish. Libraries have hourly 
lending limitations. Only one or two copies of a particular 
book exist in the entire country. The delegation urges a 
greater supply of books and journals to be sent through the 
University of Havana.
    Create a Journal of Cuban Women's issues. Follow the US law 
journal format, where students apply and are selected to become 
part of the journal staff. Cooperating universities could 
select student articles (from a pool submitted by both Cuban 
and non-Cuban women), assist in the editing and fact-checking 
process, publish and market the journal.

                   Next Steps for Fundacion Amistad:

    As a result of the delegation's observations on its trip, 
the Fundacion Amistad recommends the following as opportunities 
for additional support of the women and children of Cuba.
    1. The United States government increase educational and 
professional exchanges between the United States and Cuba.
     A symposium in Cuba with day care directors, 
providers and other educators in early childhood education.
     A symposium of elementary and secondary school 
teachers and administrators with a particular emphasis on 
literacy and successful teaching methodologies in each country
     Meetings between child and adolescent 
psychologists and educators to exchange research and techniques 
for community involvement.
    2. Private entities in the US create links between Cuban 
and US organizations designed to foster greater understanding 
and appreciation of each country, and to provide humanitarian 
aid.
     Find and encourage organizations to provide basic 
necessities for Cuban day care programs such as books, crayons, 
clothing, developmental teaching aides, and children's 
medicines.
     Develop programs with private schools and 
organizations to ``adopt'' individual day care centers, primary 
and elementary schools for close, one-to-one links to do book 
drives, special supplies fundraising, and other needed tasks, 
as requested by the Cuban individual schools and centers. The 
could be a model program for many cities throughout the US to 
adopt with rural areas of Cuba, as well as Havana.
     Support increased levels of humanitarian 
contributions of medicines for hospitals and policlinics for 
greater accessibility by family doctors. This will also 
minimize the unpredictability of medicines needed by supplying 
those that are basic and in constant demand.
     Develop a program with William Soler Pediatric 
Hospital to support its creation of a pediatric neonatal 
intensive care unit. And link organizations to this hospital to 
provide basic necessities for children: bedding and pajamas. 
Create a ``Sabanas Y Pajamas'' program.
     Continue to encourage, support and recommend 
increased financial support to those many effective 
nongovernmental working in Cuba such as CARITAS, UNICEF, OXFAM, 
MEDICC and others.
     Create additional Study Abroad programs with US 
Universities.
     Create exchanges of art exhibits, seminars about 
the arts, dance, music and literature

                     Delegation Participants' List:

    Maria de Lourdes Duke (Luly): President of Fundacion Amistad, a 
nonprofit designed to increase US awareness of Cuban history, culture 
and society, and to facilitate programs to improve life in Cuba. Also 
Vice President of The Harbor for Boys and Girls in New York City, an 
inner-city comprehensive model school and afterschool program.
    Gail Furman, Ph.D: child psychologist. Chair of the Children's Task 
Force of the Women's Commission for Refugee Women and Children. 
Clinical Professor of Child Psychology, Child Study Center, New York 
University Medical School. Member of several boards focusing on 
educational/emotional needs of children.
    Ruth Frazier: educational consultant in community organizing. 
Former President of Futures for Children, a nonprofit in New Mexico 
doing community work with American Indians; established independent 
community educational organizations in Colombia, Honduras, Costa Rica 
and Mexico.
    Nancy Lublin: founder and President of Dress for Success in New 
York City providing clothing and training for women returning to work 
force. Author of Pandora's Box: A History of Women's Reproductive 
Rights. Active in women's issues.
    Cristina Rathbone: journalist specializing in youth issues, urban 
poverty, and education. Author of On the Outside Looking In: A Year at 
an Inner City High School.
    Eileen Stern: Director of the National Child Care Program for the 
United States Federal Government General Services Administration, 
oversees all federal day care programs.
    Mary Ann Schwalbe: consultant to the International Rescue Committee 
and Save the Children, US. Former director and current Board member of 
Women's Commission for Refugee Women and Children. Extensive work in 
secondary and post-secondary education.
    Clifford Tepper, MD: pediatrician, Professor of Pediatrics, Albany 
Medical College. Chief of Allergy Division, Ellis Hospital. Co-Founder 
of Physicians for Social Responsibility.
    Lindsay Thompson, MD: pediatrics resident at Dartmouth Hitchcock 
Medical Center in New Hampshire. Extensive work with homeless 
adolescents in NYC
    Tanya Sutherland: New York University Law Student; Root-Tilden 
Scholar.
      

                                


                            General Assembly of the        
                           Presbyterian Church (U.S.A.)    
                            Louisville, Kentucky 40202-1396

The Honorable Philip M. Crane, Chairman
House Ways and Means Subcommittee on Trade
1104 Longworth House Office Building
Washington, D.C. 20515-6354

    Dear Chairman Crane:

    As Stated Clerk, and on behalf of the General Assembly of the 
Presbyterian Church (U.S.A.), the largest and most broadly 
representative deliberative body of our Church, I want to thank the 
members of the House Ways and Means Subcommittee on Trade for the 
opportunity to provide testimony for the record concerning the issue of 
trade with Cuba.
    The Presbyterian Church (U.S.A.) has a relationship with the Cuban 
people that goes back more than a hundred years. It has resulted in 
close ties to the active and growing Presbyterian Reformed Church of 
Cuba. I mention this at the outset merely to indicate that the concerns 
our Church has about trade are not political or economic abstractions 
but result from continuing contact with responsible people who share 
our faith convictions. They help us understand in very concrete ways 
the damaging effects on the lives of ordinary citizens of our 
government's policies toward Cuba.
    It is out of this relationship that the General Assembly of the 
Presbyterian Church (U.S.A.) has on numerous occasions called for a 
lifting of the economic, travel and trade sanctions imposed by our 
government on Cuba and a normalizing of relationships between our 
peoples and governments. Whatever justification may once have existed 
in the minds of some for seeking to isolate Cuba from contact with the 
United States and the larger world community has long since ended. It 
is time to move onto a new, more just, practical and fruitful 
relationship with the people of this very near neighbor.
    The Cuban Humanitarian Trade Act, H.R. 1951, falls short of that 
ultimate goal, but it is an important step from a moral perspective. It 
is a blot upon our national character that we continue to use food and 
medicine as weapons in seeking to enforce a questionable political 
policy rooted in a Cold War logic.
    Last year's statement of our General Assembly on Cuba specifically 
called for ``ensuring the access of Cuba to medicines, medical 
equipment, and major food requirements.'' I submit herewith the full 
text of that resolution for the record of the Subcommittee and urge 
support for H.R. 1951 which would help to fulfill that modest but 
important humanitarian goal.

                           The Reverend Clifton Kirkpatrick
                                                       Stated Clerk
      

                                


Statement of The Reverend Clifton Kirkpatrick, Stated Clerk of the 
Presbyterian Church (U.S.A.)

                                 Precis

    For more than thirty years, the United States has pursued 
policies designed to bring about the overthrow of the Cuban 
government. This policy has had heavy consequences for the 
Cuban people, while strengthening the resolve of the Cuban 
government to resist what it believes are unjust and vindictive 
practices by the United States, under heavy influence by its 
Cuban exile community. Recent legislation by the United States 
Congress has increased economic pressure on Cuba, at the same 
time drawing protests from friendly governments as well as the 
United Nations. While acknowledging that the cold war is over, 
the United States has continued to pursue a cold war stance 
against Cuba, in marked contrast to its policies toward some 
other countries, for example, the People's Republic of China. 
Presbyterian General Assemblies have repeatedly called upon the 
United States to pursue a policy of reconciliation and 
negotiation with the Cuban government. The hostility between 
the two governments has also limited relations between 
Presbyterians in the United States and those in Cuba, 
disrupting the close historical bounds between the two 
churches. After years of restriction, there is a new openness 
for the role of religion in Cuban society and churches are 
growing rapidly, presenting new opportunities for Presbyterians 
in the United States to relate to and support their Cuban 
brothers and sisters in Christ.

                               Resolution

    Whereas, the Confession of 1967 has reminded us that 
``God's reconciliation in Jesus Christ is the ground of the 
peace, justice, and freedom among nations which all powers of 
government are called to serve and defend . . .'' (Book of 
Confessions, 9.45); and

          Whereas, the Confession of 1967 has reminded us that
           . . . The church, in its own life, is called to practice the 
        forgiveness of enemies and to commend to the nations as 
        practical politics the search for cooperation and peace. This 
        search requires that the nations pursue fresh and responsible 
        relations across every line of conflict, even at risk to 
        national security, to reduce areas of strife and to broaden 
        international understanding. . . . (Book of Confessions, 9.45); 
        and

    Whereas, Peacemaking: The Believers' Calling calls upon the 
church and Presbyterians as individuals to be actively engaged 
in the pursuit of peace and reconciliation; and
    Whereas, recent openness to religion in Cuban society has 
resulted in great growth in membership for all churches, 
including the Presbyterian Reformed Church in Cuba, presenting 
new opportunities for partnership and support for the life and 
work of our Presbyterian sisters and brothers in Cuba, bound to 
us by historic ties of faith and mission; and
    Whereas, United States efforts to bring about political 
change in Cuba through punitive economic sanctions have largely 
failed and resulted in both hardship for the Cuban people and 
resentment among numerous friendly governments around the 
world; and
    Whereas, calls by the Presbyterian Church (U.S.A.) to lift 
the U.S. embargo and normalize relations over the years (1969, 
1972, 1977, 1982, 1990, 1993) have gone unheeded; and
    Whereas, developments since 1993, including the Cuban 
Democracy Act and the Helms-Burton Act, have set back the 
efforts for change in Cuba and the normalization of 
relationship; and
    Whereas, unilateral United States sanctions against Cuba do 
not enjoy the support of the world community in dealing with 
Cuba and its leaders, either in terms of their legality under 
international law, or in their effectiveness, or in the 
propriety of the coercive aspects as related to the sovereignty 
of other countries;
    Therefore, the 209th General Assembly (1997) of the 
Presbyterian Church (U.S.A.):
    a. Calls upon the United States Congress to rescind the 
Cuban Democracy Act and the Helms-Burton Act.
    b. Renews the call upon the United States government to 
initiate negotiations with the Cuban government toward the end 
of reestablishing full diplomatic relations.
    c. Renews the call to develop cooperative efforts on radio 
and television transmissions, detection and interdiction of 
narcotic traffic, air and sea traffic, environmental 
protections and nuclear safety issues, improving postal 
service, eliminating travel and currency restrictions, and 
ensuring the access of Cuba to medicines, medical equipment, 
and major food requirements.
    d. Calls upon the United States and Cuban governments to 
facilitate the mediation of the nationalized properties.
    e. Renews the call on the United States government to end 
the economic sanctions that it has imposed on Cuba and to 
respect the opinion of the world community in this matter.
    f. Calls upon the government of Cuba to ensure the 
political, civil, and religious rights of its people, just as 
the Cuban government seeks to provide for their economic and 
social needs.
    g. Calls upon the United States to encourage economic 
investment in Cuba for assisting the Cuban people's efforts to 
build a just society, and to do so in ways that respect the 
dignity of the Cuban people and their right to self-government.
    h. Encourages presbyteries and Presbyterians to seek to be 
peacemakers by building relations with Cuba through visits, 
church-to-church exchanges, provision of humanitarian needs, 
study, and advocacy of the positions recommended by the General 
Assembly.
    i. Urges congregations and individual Presbyterians to 
provide financial support for the life and mission of the 
growing Presbyterian Reformed Church in Cuba through 
contributions to the Extra Commitment Opportunities established 
by the Worldwide Ministries Division.
    j. Calls upon the United States government to permit the 
Board of Pensions of the Presbyterian Church (U.S.A.) to pay 
full retirement, survivor, and death benefits directly to the 
eligible retired church servants and their families living in 
Cuba.
    k. Directs the Stated Clerk of the General Assembly to 
communicate this resolution to the President of the United 
States, the Secretary of State, every member of Congress, the 
President and the Foreign Minister of Cuba, and the President 
and the General Secretary of the Presbyterian Reformed Church 
in Cuba.

                               Background

    With the collapse of communism in Eastern Europe and the 
ending of the U.S.S.R., Cuba fell into what its government 
calls ``the special period'' in 1989. It lost most of its 
trade, its subsidies from former allies disappeared, and its 
economy fell into severe contraction and depression from which 
it is just now beginning to emerge. The bitterness evoked by 
the cold war and memories of the 1962 missile crisis still 
influence United States-Cuba relations even though socialist 
Cuba is no longer a political threat to its giant neighbor to 
the north. Revenge, ideological resistance to socialism, and a 
variety of economic interests still fuel this bitterness. 
However, Americans who believe deeply in the core value of 
national independence should understand the depth of the 
political pride of Cuba and its people, independent and free 
from external domination for the first time in five hundred 
years. Cuba is now faced with necessary changes in its internal 
and external relations; but neither its government, nor the 
majority of its eleven million people will accept compromises 
to their sovereignty or dignity.
    Many United States Presbyterians will reject aspects of the 
Cuban revolution of 1959: one-party government, dictatorship, 
suppression or dissent, imitations of Eastern European 
socialism, and the like. But neither a ``yes'' nor a ``no'' to 
the Cuban revolution gives the United States a right to destroy 
the Cuban experiment, or to deny or ignore the gains of the 
revolution in education, health care, food distribution, and 
other tangible alleviations of poverty.

 I. Recent Punitive Actions of the United States

    The Cuban Democracy Act (1992) called for a tightening of 
the United States economic sanctions against Cuba. The bill 
asked for sanctions against countries doing business with Cuba, 
prohibiting trade by United States subsidiaries operating in 
other countries, and prohibiting ships that have docked in Cuba 
from coming to United States' ports for a period of 180 days. 
While its economic sanctions are unilateral in character, this 
legislation was an effort to pressure other governments into 
supporting the United States in its anti-Castro efforts.
    The United Nations General Assembly for five years has 
voted to urge the United States to end its economic sanctions, 
thus denying any international legal or moral endorsement for 
United States action. In the 51st General Assembly, 1996, the 
vote was 138 to 3, with 24 abstentions. Canada and all European 
Union countries voted against the United States.
    The Helms-Burton Act, passed by Congress in 1996, allows 
Americans to sue foreign corporations that are using property 
claimed by United States citizens or companies, but 
nationalized by the Cuban government in 1959. Thus far, the 
president has delayed application of that portion of the 
legislation. It is opposed, even to the point of formal legal 
protests, by Canada, Mexico, the European community, and others 
as an unwarranted effort to extend the jurisdiction of the 
United States law over the sovereign affairs of other 
countries, and as a violation of free trade agreements under 
the world Trade Organization. The legislation thereby hampers 
the appropriate conduct of United States foreign policy.

 II. Recent U.S. Complaints Against Castro

    A. Human Rights.--Human rights conditions in Cuba receive 
considerable focus in the United States. Amnesty International 
suggests that Cuba holds as many as six-hundred persons as 
political prisoners, always a difficult matter to define and 
document. Recent activity seems to be focused on a curtailment 
of freedom of expression, association, assembly, and movement. 
Cuban Concilium, a coalition of around 140 unofficial groups, 
has been denied legitimacy and several of its leaders 
imprisoned. The organizational efforts of lawyers and reporters 
have been thwarted. Agromontist Union, an independent lawyer's 
group, and the Cuban Association of Independent Journalists are 
among the groups that have run afoul of state authorities. Fair 
trials are difficult because lawyers defending Cubans accused 
of political crimes are restricted in their access to their 
clients, to the evidence, and are limited in their capacity to 
cross-examine or produce witness. Journalists are threatened 
with arrest for writing materials that could be interpreted as 
undermining the authority of the state.
    B. The Property Issue.--The United States has not disputed 
the right of a government to nationalize property. In dispute 
since 1959 have been the terms of compensation. Terms offered 
by the Cuban government in the early sixties were not accepted 
and negotiations were ended. Determining the value of 
properties nationalized more than thirty-five years ago will be 
complex, especially in light of the chief complaint behind the 
Helms-Burton bill: that non-Cuban corporations are now using 
some of the assets left by American companies after 1959. But 
it is fair to ask if the legal confrontations authorized in the 
bill, and even international arbitration, are hopeful routes 
toward a settlement of the dispute. The opening of direct 
negotiations among all the corporations, businesses, and 
governments who have a stake in the matter would seem to offer 
a more practical approach.
    C. The 1996 Plane Incident.--In February 1996, two Cessna 
planes belonging to a Miami-based, Cuban-American group called 
``Brothers to the Rescue'' were shot down by Cuban military 
planes, not only adding strain to United States-Cuban 
relations, but derailing some steps the Clinton administration 
had been taking toward improvement of relations. Warned in 1995 
that continued intrusions of Cuban airspace would lead to 
attack, the U.S. State Department in turn warned ``Brothers to 
the Rescue'' that it could not help them if trespassing 
occurred.
    The right of a country to defend itself is one of the 
claims of sovereignty and an accepted part of international 
law. Tragedy of this sort is the more likely when a government 
like Cuba's lives under the constant pressure of a stronger 
government that seeks its downfall. As long as that state of 
relations continues, tragic results can occur from illegal 
civilian initiatives.
    D. The Failures of the Cuban Economy.--Many Cubans will 
admit that the government's economic planning has not always 
been wise, and imitation of Eastern European state models has 
not led to notable economic success. Nonetheless, in face of 
the thirty-five-year U.S. embargo, and since the departure of 
the Soviets in the early 1990's, Cubans and their government 
have endured their ``special period'' of hardship with 
remarkable commitment to the sharing of that hardship. They 
have continued to provide food, medical care, and education for 
basic survival needs for virtually every citizen. Moreover, in 
the past five years its socialist government has begun to 
negotiate new connections with the market economies of Canada, 
Europe, and other Latin American countries, and to open 
economic opportunity for private initiative by Cuban citizens 
in several areas of the economy. These steps have led to recent 
economic growth and it seems even mroe unlikely than before 
that the U.S. embargo will cause the collapse of Cuban 
socialism. In any event, Christians should be deeply disturbed 
about the morality of a policy intentionally based on the 
continued economic misery and punitive pressure on the daily 
lives of almost all of Cuba's eleven million people.

 III. Religious Developments

    Even though Fidel Castro had been educated in Jesuit 
schools and a number of Christian leaders had supported the 
revolution, in the early 1960s the schools operated by both 
Roman Catholic and Protestant bodies, along with some other 
properties, were nationalized. Following the declaration of the 
socialist character of the revolutioon, all churches labored 
under many restrictions as the government pursued an active 
campaiagn against religion. These restrictions began to ease in 
the late 1980s, particularly after an intensive dialogue 
between Castro and Protestant leaders in 1990 that was 
broadcast on Cuban television. This greater openness to 
religion was symbolized in changes in the Cuban constitution in 
1992, prohibiting religious discrimination in education, 
employment, and other social relations, and removing the bar to 
membership in the Communist Party by Christians. These changes 
have led to remarkable growth in religion in Cuba among both 
Roman Catholic and Protestant bodies.
    A. The Roman Catholic Church.--Cuba, like other Latin 
American countries, was predominantly RomanCatholic. The loss 
of their extensive schools and properties was a great blow, and 
the allegiance of the church to the papacy increased tension 
with the revolutionary regime.
    In Rome in November 1996, for the World Food Conference, 
President Castro met privately with Pope John Paul II. The 
visit brought confirmation of an invitation and acceptance for 
a papal visit to Cuba in early 1998. The private meeting had 
been preceded by the Cuban visit of senior Vatican diplomat, 
Archbishop Jean-Louis Tauran the preceding month. His five-day 
visit concentrated on church-government relations and on the 
details of the potential papal visit.
    Roman Catholic policy toward the Cuban government is not 
yet clear and the bishops of the Cuban Catholic church have 
recently published criticisms of government policy--an action 
that assumes some increase in religious liberty in the society. 
At the same time, Vatican representatives have joined in 
criticisms of U.S. policy toward Cuba.
    It remains to be seen what impact the forthcoming papal 
visit will have on Vatican-Cuban relations and the general 
religious climate in Cuba, whether it will weaken or strengthen 
Castro's leadership, and whether it will make any difference in 
U.S. treatment of Cuba.
    B. The Presbyterian Church (U.S.A.) and the Presbyterian 
Reformed Church in Cuba.--United States Presbyterians have had 
a long relationship with Cuban Presbyterianism. Missionary 
activity began late in the nineteenth century. Until 1967, the 
Presbytery of Cuba was part of the Synod of New Jersey. Retired 
church workers and their families in Cuba from that period are 
entitled to vested pension and death benefits under the 
church's Benefits Plan. Following the establishment of an 
independent Presbyterian church by action of the 1966 General 
Assembly of the UPCUSA (Minutes, UPCUSA, 1966, Part I, p. 233), 
the PC(USA) has been in continuous ecumenical relations with 
that body. These relations have been made difficult by 
restrictions imposed by the Cuban government on religious 
activities and those imposed by the U.S. government limiting 
travel, refusing to license the Board of Pensions to pay the 
full benefits due to the retired church workers and their 
families, and greatly restricting the transfer of general funds 
to support the Presbyterian Reformed Church in Cuba. The 
PC(USA) has given support as legally permitted, sending and 
receiving representatives and sending medical and educational 
materails.
    Since 1990, the Presbyterian Church in Cuba has experienced 
steady and remarkable growth, bringing new requirements for 
resources to renovate and open churches closed for years, 
establish new congregations, train new leaders, produce new 
educational resources, and prepare new pastors. Those resources 
must come largely from Christians outside Cuba and the Cuban 
church has forged partnerships with churches in Canada and 
Europe, as well as with presbyteries of the PC(USA). The 
PC(USA) has obtained a license to send more funds to the 
Presbyterian Church in Cuba if those funds are made available 
by congregations, opening the opportunity to renew the historic 
bonds between two churches.

 IV. Conclusion

    The 202nd General Assembly (1990) of the Presbyterian 
Church (U.S.A.) concluded its major study on Cuba with the 
following words:

           Presbyterians are inheritors of an explicit and consistent 
        record of General Assembly public policy positions in support 
        of the normalization of U.S. relations with Cuba. This 
        consistent position is the expression of a theological 
        tradition that sees reformation as an ongoing process of 
        setting things right. . . . We also treasure that theological 
        insight which is at the heart of the whole Judeo-Christian 
        tradition: God's ever-present promise of a new beginning for 
        those who repent.
          In his ministry, Jesus affirmed life over those institutional 
        forces of death which, in his contemporary Jewish society, had 
        come to be justified in religious terms. The crucifixion and 
        resurrection of Jesus Christ confront and unmask the powers of 
        death, those false divinities, such as the idolatry of power 
        and empire, by which we demonize the adversary of the moment 
        and make gods of prudential and national security calculations 
        . . . . (Minutes, 1990, part I, pp. 615-16)

      

                                


Statement of Brenda L. Smith, President, global links

                                Summary:

    I urge the committee, on humanitarian grounds, to support 
the bills H.R.1951 and S.1391 which lift restrictions on Cuba's 
ability to purchase food and medicine from the United States. 
Despite the success of our Cuba Medical Aid Program, the 
committee must understand that such programs only partially 
offset the deleterious health impact of existing restrictions. 
Moreover, the transparency and accountability of our donation 
program over the last four years suggest that satisfactory 
mechanisms for the sale of food and medicine could likewise be 
established. Finally, the amount of assistance that global 
links can afford to offer is limited by those restrictions 
which force us to ship via Canada, making nearby Cuba an 
unnecessarily expensive destination.
    global links is a non-profit organization based in 
Pittsburgh, Pennsylvania, which specializes in recycling 
surplus medical supplies and equipment to facilities treating 
the poor in developing countries. Since 1990 global links has 
worked in cooperation with the Pan American Health 
Organization/World Health Organization (PAHO/WHO) to deliver 
medical supplies, biomedical equipment, pharmaceuticals, and 
hospital furnishings to countries in the region including 
Nicaragua, El Salvador, Jamaica and Guyana.
    Since 1994, global links has donated 30 ocean containers 
(tractor-trailer loads) of medical aid to Cuba worth over $25 
million. No other charity in the U.S. has sent more. As with 
all global links programs, this is a humanitarian effort 
undertaken without regard to political considerations. global 
links has applied for and received all required licenses from 
the U.S. government for the shipments.
    Careful records are kept regarding the distribution and use 
of all goods shipped. PAHO is the consignee for our shipments 
to Cuba, and oversees the distribution of the materials to 
public hospitals, health centers, libraries and pharmacies. We 
have receipts, signed and dated, from each facility for every 
item delivered. Members of global links' staff and Board of 
Directors make regular visits to Cuba to verify the 
distribution and use of our donations. This information has 
allowed global links to maintain high standards of quality and 
accountability for our donated medical supplies. We see no 
reason why quality and accountability could not also be 
guaranteed for purchases of similar materials.
    Despite the success of our Cuba Medical Aid Program, our 
experience has made it clear to us that no country's health 
system can be run on donations alone. First of all, many 
medicines are simply never made available for donation. 
Moreover, even when a crucial medicine is available, the 
unpredictability of future supply can limit the benefit of the 
donation or even have harmful effects on the population.
    In 1994, for example, global links donated 1.25 million 
tablets of Doxycycline, enabling Cuban health authorities to 
launch a very successful program to combat Leptospiroses. When 
we were approached the following year for an additional 
contribution of Doxycycline, however, we were unable to obtain 
any and the program had to be discontinued.
    This unpredictability of supply is especially problematic 
for situations where partial treatment is worse than no 
treatment at all--the treatment of AIDS and high blood 
pressure, or hypertension, are two examples. In these cases, a 
seemingly valuable donation can be of little use or even 
harmful because of the inconsistency of supply. global links is 
periodically offered quantities of expensive protease 
inhibitors used in the treatment of AIDS. However, for these to 
be used as part of a long term treatment program future supply 
would somehow have to be assured. To start and then stop the 
treatment would simply ``teach'' the AIDS virus how to combat 
the drug.
    Furthermore, there are at least 60 drugs that can be used 
to treat high blood pressure. Not all of them work for every 
patient and switching from one drug to another can be harmful. 
Therefore when the patient finds the one that works they need 
to continue with it. We are concerned that those patients who 
are seeing positive results with the U.S. manufactured anti-
hypertension drugs that we have been able to obtain will have 
to change treatments unnecessarily when the current supply is 
exhausted.
    Finally, restrictions on shipping to Cuba from U.S. ports 
hamper our charitable mission by adding at least $1000 to our 
shipping expenses for each tractor-trailer load of supplies we 
ship. Overall, these restrictions have cost global links at 
least $30,000. With those funds, global links could have 
delivered an additional $2 million worth of medical assistance 
to the people of Cuba.
    In conclusion, it is global links' mission to work for the 
improvement of health around the world regardless of political 
considerations. However, we feel obligated to testify that the 
passage of H.R. 1951 and S. 1391 would do as much for the 
health of the Cuban people as all of our shipments put 
together. Furthermore, it would also enable global links to 
increase the impact of our Medical Aid Donation Program.
      

                                


Statement of Hon. Lee H. Hamilton, a Representative in Congress from 
the State of Indiana

    Chairman Crane and Ranking Member Matsui, I appreciate the 
opportunity to submit a statement for the record of your 
hearing today on US policy toward Cuba. This hearing is timely, 
and I commend you for your leadership on this important issue.

              The US National Interest and Policy Choices

    The US national interest in Cuba is in a peaceful 
democratic transition. We are confronted in that country with a 
Communist government that is hostile to international norms on 
freedom and human rights, let alone a peaceful transition to 
democracy. We learned in the Cold War that the best way to move 
such a country toward freedom is not through isolation but 
through intensified and broad engagement with its people. 
Through trade, travel and extensive educational and cultural 
exchange we influenced a generation of eastern Europeans.
    Trade exposes otherwise isolated people to US ideas and 
values, strengthening sectors other than the government to 
address the needs of the people. It is no coincidence that 
those countries most isolated are also those most unwilling to 
recognize basic international standards on human rights and 
freedom. Trade also offers citizens in repressive societies the 
opportunity to interact with American executives and employees, 
exposing them to new ideas about the principles of the free 
market and to positive US business practices.
    Our policy toward Cuba ignores the historical record on 
engagement and trade. Our policy escalates economic pressure, 
with the goal of forcing the Cuban government to capitulate or 
inducing a desperate people to overthrow the Castro regime. 
This policy harms the Cuban people and increases the likelihood 
that change, when it comes, will be violent.

                        The Impact of US Policy

    No country supports the US policy of isolating the Cuban 
people. Pope John Paul II and Canadian Prime Minister Jean 
Chretien are just the latest in a steady flow of western 
leaders to visit the island. Our Caribbean neighbors are 
pushing for Cuba's inclusion in their community of nations, 
CARICOM, and our Latin American neighbors are pushing for 
Cuba's accession to the Organization of American States.
    Our insistence on pursuing a policy toward Cuba based on 
historical animosity instead of prudent foreign policy 
calculations leaves us isolated in the international community. 
Our policy leaves us with few supporters, even when we push for 
meritorious measures to criticize Cuba, as was the case just 
last month at the United Nations Human Rights Commission in 
Geneva.
    Our policy of pressure reduces the likelihood that any 
transition in Cuba will be peaceful. If economic sanctions 
create sufficient hardship to cause social unrest, the most 
likely consequence would be widespread political violence. This 
would be a tragedy for Cuba and a disaster for the United 
States. Civil strife would generate a tidal wave of refugees 
and would generate intense domestic political pressure for US 
military intervention.
    Castro's repression and his catastrophic economic policies 
are no doubt the main cause of suffering in Cuba, but we cannot 
escape responsibility for our own policy. US law prohibits food 
sales to the island and greatly complicates the sale of 
medicine. The Helms-Burton law has driven up the cost of 
money--interest rates--so much as to create a cost of living 
crunch that hurts average Cubans.
    Current US policy lets Castro dictate the pace of change in 
Cuba. US regulations on travel artificially limit the number of 
Americans--sources of information and support for the Cuban 
people--who visit the island. An arbitrary cap on cash 
remittances from the U.S. slows the main source of capital for 
Cuba's independent entrepeneurs. Our insistence on isolating 
the Cuban people gives the regime a convenient excuse for its 
many failures.

                          Toward a New Policy

    The United States should open the door for a positive, 
rather than punitive, influence on Cuba's future by expanding 
contact with the Cuban people.
    First, the US should abolish restrictions on travel to 
Cuba. Interaction with US citizens, business and humanitarian 
leaders will broaden access to ideas and information within 
Cuba, breaking Castro's monopoly on ideas and easing fear of 
change within Cuba.
    Second, the US should abolish the arbitrary cap on cash 
remittances to the island. Evidence suggests that remittances 
from the US provide the capital investments that Cuban 
entrepreneurs need to start independent businesses. There is no 
doubt that these businesses erode the control that the 
government exercises on the Cuban economy and give more and 
more Cubans independent sources of income.
    Third, the Administration should endorse, and Congress 
should approve, proposals to lift the embargo on the export of 
food and streamline the regulations on the export of medicine 
to Cuba. Such a change will permit Cubans access to advanced US 
medicines and will open Cuba to the positive influences of US 
business.
    Finally, the US should move step-by-step to lift the 
overall embargo. An influx of US business leaders will expose 
the Cuban people to new ideas about free markets and human 
freedom and will challenge the regime's absolute control on the 
island. It is openness, not isolation, that Castro fears. It is 
an invasion of US people, information, and ideas that poses the 
greatest threat to Castro, and offers the greatest hope for a 
peaceful transition to democracy.
      

                                

Statement of Interreligious Foundation for Community Organization

    The Interreligious Foundation for Community Organization 
(IFCO) is a 30-year-old national ecumenical agency which has 
been working for reconciliation in the area of US/Cuba 
relations since 1991. In these last seven years, we have taken 
dozens of delegations and humanitarian aid missions to Cuba. We 
have visited Cuba with diverse groups of concerned US 
citizens--including clergy and diocesan delegations, Rotarians, 
health care professionals, and Congressional staff. We have 
seen with our own eyes the many ways in which the archaic US 
trade sanctions have had a brutal impact on the people of 
Cuba--particularly on Cuban children and families, on the 
infirm and the elderly, on the most vulnerable Cuban citizens.
    We have also cultivated close working relations with the 
religious sector in Cuba, specifically with the evangelical/
Protestant churches which have grown so extensively in the last 
10 years. We would like to share some of what we have learned 
from them regarding the distribution of humanitarian aid, food 
and medicines in Cuba. We are grateful for the opportunity to 
present this testimony to the Subcommittee on Trade of the 
House Ways and Means Committee.
    For a more comprehensive look at ``The Impact of the US 
Embargo on Health and Nutrition in Cuba,'' we would refer you 
to the 300-page report of the American Association for World 
Health (AAWH), and to a number of other articles and reports 
(by the American Public Health Association, OXFAM, Kirkpatrick 
and Vanden, Garfield and Santana, Washington Office on Latin 
America, and others). Our main intention in this statement, 
however, is to share with you some eyewitness accounts of how 
we have seen people living in Cuba's ``special period,'' since 
the fall of the Soviet bloc and the tightening of US economic 
sanctions. Let us share with you these pictures of the things 
we have seen in Cuba:
     households functioning without lightbulbs and 
batteries
     parents who don't have syringes to give insulin to 
their diabetic child
     a widow caring at home for her elderly mother with 
Alzheimer's disease--and facing the constant challenge of 
maintaining the health and hygiene of the disoriented, 
incontinent mother, when soap and detergent are unavailable for 
months at a time, and there are no extra sheets or towels, not 
to mention medications
     a 40-year-old telephone system, many lines still 
above-ground, where, on a rainy day, it can take an hour or 
more to place a call from one Havana neighborhood to another
     no spare parts for ambulances, for automobiles, 
for elevators, for medical equipment
     a communal playroom for elementary school kids who 
have no other access to toys
     a chemistry teacher in Havana's most selective 
science high school trying to design oral exams for her 
advanced chemistry students, because there's not enough paper 
to give written tests
     a beloved Baptist pastor who died after a kidney 
transplant [and in how many developing nations would the pastor 
of a poor urban church have access to an organ transplant free 
of charge?] without the cyclosporin needed to sustain her new 
kidney
     a family doctor boiling the leaves of the orange 
tree which grows in the clinic yard, to make cough medicine for 
her patients with bronchitis
     another family doctor who tells us that she relies 
on donations of paper from her patients in order to maintain 
their medical records
     women who have had to make do for years without 
sanitary napkins or tampons (and who waited for months to talk 
with us about this because they found it so humiliating)
     children on a pediatric cancer ward vomiting 20 
times a day because the anti-nausea drugs which suppress the 
side effects of their chemotherapy are not available
     a hospital with 50 bicycles parked in front, 
because there is no fuel for automobiles--and in the empty 
parking lot, a field of aloe has been planted to treat burn 
victims
     dozens of Cubans lined up at the doorsteps of 
churches on the days that donation shipments arrive, each one 
of them clutching prescriptions: ``my father needs pills for 
his ulcer''; ``my daughter needs an asthma inhaler''; ``my 
grandmother has an infection and needs penicillin'' (and the 
pastors inside the church explaining that all those medicines 
used to be readily available at any Cuban pharmacy--``but in 
these last few years, the churches have to be pharmacies 
too...'')
     heart patients who can't get pacemakers--not since 
the division of Siemens which used to sell pacemakers to Cuba 
was acquired by a corporation based in St. Paul, Minnesota
     a woman who walked three miles to the church where 
we were staying, to thank us for the donation of a wheelchair: 
she explained that, until they received that chair, her adult 
son with full-blown cerebral palsy had not been able to leave 
their house since he'd gotten too big to carry
     a father of two young girls who explained, ``I 
used to wear size 32 jeans, and now I wear size 27; it's 
because what food there is, we give first to our daughters.''
    These eyewitness examples illustrate some of the direct 
effects of US economic sanctions--effects which strike us as 
petty, meanspirited, counterproductive, and essentially 
immoral.
    Cuba's critics here in the US would like to blame all these 
shortages on the Cuban government. But we have found that the 
Cuban people hold a very different view. They weren't suffering 
all these dire shortages before 1991. When goods were available 
in Cuba, they were distributed equitably by the very same Cuban 
government now in power. The basic needs of eleven million 
people were met for many years. And the US embargo had only a 
marginal impact, because 85% of Cuba's economy was tied to the 
Soviet bloc. With the Soviet collapse and the end of the `cold 
war,' Cuba would have been an easy new market for the US. As 
the Cuban people understand it, our government passed up a 
golden opportunity to open a new era in US/Cuba trade 
relations, and chose instead to implement the so-called Cuban 
Democracy Act (CDA) and tighten the stranglehold of its archaic 
economic sanctions.
    We would contend that, if we want the Cuban people to grow 
in their respect for the United States as a neighbor nation and 
a potential ally and trading partner, then we must stop 
contributing so directly to all this petty suffering which has 
had its most direct impact on Cuba's most vulnerable--the 
children, the elderly, the disabled and the infirm.
    Distribution of humanitarian aid, food and medicines. Cuba 
has been accused of all sorts of gross violations--virtually 
all of them unsubstantiated--with regard to the distribution of 
humanitarian aid, the use of medical aid for torture, etc. We 
find it ironic that these particular accusations continue to be 
made against a nation that offers universal vaccinations, 
exemplary primary and maternal care, health care which is 
universal and free of charge. In fact, Cuba has a model health-
care delivery system which has been internationally recognized 
as one of the world's best. As Rep. Charles A. Rangel (D-NY) 
said in a press conference last June, ``Of all the complaints 
that one might have against Cuba, health care delivery is 
certainly not one of them.''
    Cuba has also been loudly criticized for practicing 
``medical tourism''--for offering some of its innovative 
treatments for skin disorders, retinitis pigmentosa, radiation 
sickness, and other intractable diseases to foreign patients on 
a fee-for-service basis. But we would challenge you to name 
another nation which doesn't charge fees to some patients who 
can afford to pay, in order to subsidize the treatment of 
others who cannot. Then we'll ask you to remember that, by 
these means, Cuba is trying to subsidize the treatment of 11 
million of its own citizens, plus many poor patients from other 
developing nations, at no cost to them. (And then we'll ask you 
to show us where in our own country a poor patient might go to 
get prescription medicines for free--as any citizen of Cuba was 
able to do, in any Cuban neighborhood, before the enactment of 
the CDA.)
    In response to the common claim that aid sent to Cuba all 
ends up in the hands of ``tourists and the Communist elite,'' 
we would contend that it is only because of Cuba's equitable 
and broad-based distribution system that we did not see 
wholesale death by starvation in Cuba after the collapse of the 
Soviet bloc--the sort of large-scale starvation that we have 
seen recently in North Korea or in Iraq. It is only because of 
Cuba's thorough distribution of donated vitamins and 
nutritional supplements (and their willingness to work 
cooperatively with international health agencies) that 
thousands of Cubans were not permanently blinded in the optic 
neuropathy epidemic of several years ago. It is only because 
Cuba has worked so hard to distribute what little medicine it 
had (and to invent substitutes for what it didn't have) that we 
haven't seen more people dying there for lack of a simple 
antibiotic.
    Regarding the licensing of medical sales and donations to 
Cuba: We have heard members of Congress claim that there is no 
blockade on food and medicines to Cuba. We have heard 
Congressional staff say that ``any US corporation that wants to 
can get a Commerce license to sell medicines to Cuba.'' An 
analysis of all of the Treasury and Commerce Department 
licenses granted since the enactment of the CDA was recently 
conducted by Kirkpatrick and Vanden [and has been submitted as 
separate testimony to this hearing; we urge you to study it], 
and was reviewed by the Congressional Research Service. Of 36 
licenses actually approved, five were for travel, not for 
sales. Of the remaining 31 licenses, many were for items that 
were never in fact sold to Cuba--but rather were sold to 
international relief agencies such as the United Nations for 
donation to Cuba. The total dollar value of actual licensed 
medical sales to Cuba (including, again, the items actually 
donated) is given at approximately $1.67 million. And what does 
that total include? A half-million dollars' worth of 
contraceptives (IUDs and Provera); several big pieces of 
specialized medical equipment; and not very much else. ($1.67 
million does not buy very much medical merchandise in the 
economy of the 1990s.)
    Knowing the US market economy as we do, if it were really 
easy for US corporations and their subsidiaries to sell to 
Cuba, wouldn't they all be doing it by now?
    This points to one of our most serious objections to the 
practice of US government licensing of aid and trade to Cuba. 
The existence of a small amount of licensed aid and trade is 
being used here to help put a pretty face on a brutal set of 
sanctions--the same sanctions which have been creating the 
sorts of daily hardships we have described above. When 
distinguished members of Congress write ``dear colleague'' 
letters which say ``Don't be fooled--the United States is 
already allowing large-scale humanitarian donations and sales 
of medicines and medical supplies to Cuba,'' they quote 
inflated figures about licensed aid and trade, and they are 
hoping that we won't notice the following--
     that a powerful embargo on medical trade to Cuba 
does in fact exist: that US-based pharmaceutical and medical 
supply companies have found the Treasury/ Commerce regulations 
so onerous that they have not sold more than a miniscule amount 
of medical goods to Cuba since the enactment of the CDA.
     that no national health care system (especially 
one as advanced as Cuba's) should be made to run solely on 
donations. Comprehensive treatment planning cannot be totally 
dependent on waiting to see which medicines happen to show up 
with which church aid shipment, or when a spare part to fix an 
X-ray machine might arrive.
     that our government's policy toward Cuba has not 
been one of generosity or charity, but rather one of 
deprivation, starvation and denial. Even if the total dollar 
values of US medical aid and trade claimed by State and 
Commerce were correct [and other testimony to this hearing will 
demonstrate that those figures are seriously inflated], that 
aid and trade would not come close to meeting Cuba's annual 
budgeted health care needs. Even if the US had licensed $227 
million in medicines and medical supplies to Cuba, that would 
amount to a multi-million-dollar Band-Aid which our government 
seems eager to place on the multi-billion-dollar injury which 
US sanctions have already (and perhaps inadvertently) inflicted 
on the Cuban people.
     that the emphasis on ``US humanitarian assistance 
to Cuba'' is also essentially misleading; Cuba wants trade, not 
aid. Cuba is not seeking alms from the US or asking to become a 
charity state; and we must not encourage that sort of 
dependency.
    We should not set the conditions for unneeded Cuban 
dependence on US tax dollars by stepping up charity aid to 
Cuba--not even if a serious need for that aid has been created 
by our own government's sanctions. We believe that both the US 
and Cuba would be better served--on economic as well as on 
moral grounds--by opening trade relations with Cuba. This 
should begin immediately, and at the very least, in the area of 
food and medicines, and should extend as soon as possible to 
other aspects of commerce.
    We urge the members of the Ways and Means Committee to move 
decisively toward a new and more humane era in US/Cuba trade 
relations, and to end this current era of meanspirited and 
misinformed trade policy.
                                   Rev. Schuyler Rhodes
                                           President
                                   Rev. Lucius Walker, Jr.
                                           Executive Director
                                   Ellen P. Bernstein
                                           Grants Administrator
      

                                


Statement of Anthony F. Kirkpatrick, M.D., Ph.D., University of South 
Florida, College of Medicine and Harry E. Vanden, Ph.D., University of 
South Florida, Department of Government and International Affairs

                                Abstract

    Health care in Cuba used to be the envy of Latin America. 
In the last decade the loss of preferential trade with the 
Soviet bloc plunged Cuba into a severe economic crisis and 
brought Cuban health care to the brink of catastrophe. It was 
at that moment in time that the United States implemented the 
1992 Cuban Democracy Act which banned the sale of food and 
severely impeded the delivery of medicines to the island 
nation. In fact, five months after the passage of the Act, this 
century's worst epidemic of neurological disease due to a food 
shortage became widespread in Cuba. This report documents in 
detail how the US State Department launched a series of ``fact 
sheets'' that grossly misrepresented the facts about 
humanitarian trade with Cuba in an effort to defend the US 
policy of restricting the island's access to food and medicine. 
Statements made by the State Department suggest a deliberate 
intent to cover-up and deceive the public. Until the US 
Government lives up to the commitment it made to international 
humanitarian law when it ratified documents like the Fourth 
Geneva Convention, it will continue to do grave harm to the 
civilian population of Cuba through its obstruction of the 
delivery of food and medicine. The Convention states that the 
parties agree not to impede the flow of food and medicine to 
the civilian population of a nation, even in time of war.

Tightening of the US Embargo in 1992:

    The 1992 Cuban Democracy Act (CDA) tightened control over 
the shipment of the basic necessities of life to the Cuban 
people. (1) The Act banned the sale of food from the United 
States and US foreign subsidiaries but permitted sales and 
donations of medicines and medical supplies to Cuba providing 
the exporter was issued a special US export license. The 
license is issued with the agreement that there is no 
reasonable likelihood that the medical items would be diverted 
to the Cuban military, used in acts of torture or other human 
rights abuses, or re-exported or used in the production of 
biotechnology products. If the product is purchased by the 
Cuban health system, which is operated by the Cuban Government, 
the company is subject to a more onerous requirement. It must 
make arrangements to carry out ``onsite inspections'' in Cuba 
by a non-governmental organization (NGO). The company is 
required to ``certify'' within a specified period (usually 6 
months) that the medicine was ``used for the purposes for which 
it was intended and only for the use and benefit of the Cuban 
people.'' Through the plain language of the Act, if the 
medicine is diverted and used to treat a military person or a 
foreign tourist visiting Cuba (albeit someone dying in agony 
from spinal meningitis) that would be a technical violation of 
the embargo. If certain procedures are not followed, the 
manufacturers could be subject to fines up to $1 million per 
violation for corporations and prison terms up to 10 years for 
individuals. However, this onerous burden of end-use monitoring 
in Cuba does not apply to a company with a US-approved export 
license to donate (or sell) a shipment of its medical supplies 
to a US-approved NGO (e.g. the United Nations, Catholic Church) 
who intends to donate the medical products to the Cuban people.

Misrepresenting The Facts about Commercial Medical Sales:

    In the wake of disturbing scientific reports showing the 
devastating effect of the US embargo on the health of the Cuban 
people (2-4), legislation has been introduced in the US 
Congress to allow Cubans the ability to purchase food and 
medicine from American companies. (5-7) In a sweeping six-page 
``Fact Sheet'' titled ``Myth Versus Reality,'' published on May 
14, 1997, the US State Department rejected the entire basis of 
the reports. (8) In its ``Fact Sheet'' the State Department 
declared that there is no embargo on the commercial sale of 
medicine and medical supplies to Cuba because the 1992 CDA 
``permits'' the U.S. Government to ``routinely'' issue licenses 
to sell medicine and medical equipment to Cuba. In further 
support of their claim, the State Department stated that 36 of 
38 license requests were approved for US companies and their 
subsidiaries to carry out ``commercial sale'' of medicine and 
medical equipment to Cuba. The fact sheet states that ``the 
only requirement'' for a U.S. company to carry out such sales 
is to arrange for end-use monitoring in Cuba. (8)
    However, careful review of the export licensing regulations 
reveals an effort by the State Department to inflate medical 
sales to Cuba. For example, the State Department wants us to 
focus on the number of licenses approved rather than the number 
of companies doing medical business with Cuba. Using just the 
numbers of licenses will give an inflated picture because each 
shipment to Cuba requires a special license. Separate licenses 
are also required for each clinic, hospital or organization in 
Cuba buying medicine. The approval of a US export license is 
like a fishing license: you are authorized to fish, but you are 
not required to go fishing. Also, the application for a license 
does not mean that the product will be shipped in a timely 
manner. For example, in the case of the sale of a drug 
(fluspirlene) used to treat a potentially life-threatening 
condition, schizophrenia, the US Government delayed the 
approval for one year. (2, 9)
    Statements made by the State Department reveal more than 
just twisting the truth: there is a pattern of deliberate 
deception and cover-ups. On July 29, 1997, we wrote a letter to 
Secretary of State Madeleine Albright pointing out that the 
claim of 36 medical sales was a gross overstatement. (10) In 
response, the State Department, quoted in the Los Angeles 
Times, said, ``If there is an error, we'll correct it.'' (11) 
On August 5, the State Department published a second ``revised 
and updated'' fact sheet. (12) The number of licenses approved 
was reduced from 36 to 31 for commercial sale of medicines to 
Cuba and the State Department acknowledged that it had failed 
to report that an additional license had been denied. Five of 
the 36 licenses approved were solely to allow medical company 
executives to travel to Cuba and explore possible sales. To 
actually sell their products, the companies must apply for 
another license. (8,12,13) Again, on September 5, 1997, we 
informed Secretary Albright that the numbers were still grossly 
inaccurate. (14) Responding on the behalf of Secretary 
Albright, Michael Ranneberger, Coordinator of Cuban Affairs, 
wrote, ``I take great exception to your assertion that the 
facts presented in the August 5 fact sheet are `inaccurate,' 
`false,' and `misleading'. The fact sheet was carefully 
prepared in the most accurate possible way, based on the latest 
information available, and we stand by the facts as 
presented.'' (15) Again seeking clarification, we filed a 
request with the Department of State requesting the 
documentation that would support their conclusions. Our request 
was denied. (16)
    The State Department said its revised and updated fact 
sheet was based on records at the Departments of Treasury and 
Commerce. Recently, the lead author was able to obtain records 
from these US agencies under a Freedom of Information Act 
request. The table shows that only 8 licenses were issued for 
the commercial sale of medical supplies to Cuba, not the 31 
adamantly claimed by the State Department. All 3 of these 
companies were required, as stipulated by the CDA, to make 
arrangements for onsite inspections in Cuba for end-use 
certification that the medicine was ``used for the purposes for 
which it was intended and only for the use and benefit of the 
Cuban people.'' Obviously, requiring companies to police the 
distribution of their goods will scare most away from trading 
with Cuba. It is our understanding based on discussions with 
staff members at the World Health Organization (WHO) that some 
medical companies refuse to quote prices to the WHO for sale of 
their products to Cuba for fear of reprisals by the US 
government.
    Fourteen export licenses were issued as ``donations'' to 
the Cuban people as defined by the CDA. Therefore, none of 
these medical companies were required to meet the onerous 
requirement noted by the State Department fact sheet for 
commercial sales, that is, they were not required to arrange 
for end-use monitoring of their products in Cuba. Further, 
according to correspondence we received from the Commerce 
Department, three of these 14 licenses for donations were 
issued by Commerce as commercial ``exports'' and this agency 
did not compile a record of the actual shipment of these 
medical products to Cuba. Without such documentation, these 
licenses qualify as donations, not sales, to Cuba as stipulated 
by the CDA (see below). Nine export licenses listed as 
commercial sales by the State Department and claimed to be 
``permitted'' by the CDA were actually pre-CDA sales and, 
therefore, did not have to meet the stringent requirements of 
the CDA. Only 3 of the world's U.S. related medical companies 
have attempted to brave US regulations since the enactment of 
the CDA. The number of companies granted US licenses for 
commercial sales to Cuba has fallen to less than 4% of pre-CDA 
levels. (2)
    There is no record of any commercial medical sale from a US 
company selling US-made products. All 8 commercial medical sale 
licenses listed in the table were issued by the Treasury 
Department to US foreign subsidiaries. The Administration's 
chief administrator of the US embargo, Richard Newcomb, reports 
that the Treasury Department retains the responsibility for 
licensing exports of medicines and medical supplies from US 
foreign subsidiaries while the Commerce Department licenses US 
companies selling US-produced products. (17) According to 
Newcomb, all post-CDA ``commercial sales'' to Cuba require 
documentation that the licensed medical supplies were actually 
shipped to Cuba. But the Commerce Department reports that it 
does not carry out such documentation, nor is it ``charged'' to 
do so. (18) Therefore, the US Government has not established a 
mechanism for commercial medical sales to Cuba from US 
companies selling US-made products even though the CDA has 
permitted such sales for over 5 years. In January 1998, the 
Tampa Tribune reported on the difficulties encountered by 
American companies attempting to sell medical products to Cuba. 
Commerce's Director of export licensing for Cuba is quoted as 
saying ``few American companies even apply for a license, 
either because they are unaware medical sales are legal or they 
doubt Cuba has the means to pay.'' (13)
    Similarly, the State Department misrepresented the facts to 
Congressman Esteban Torres (D-Calif), the leading architect of 
pending legislation aimed at permitting the sale of food and 
medicine to Cuba. In a letter, Torres asked the State 
Department how many of the licenses claimed as commercial 
sales, under the CDA, were actually pre-CDA licenses. He was 
informed there were only 3 when, in fact, there were 9. (17,19)
    Further, the US Government, for its part, seems to make a 
concerted effort to intimidate medical companies. For example, 
the largest pharmaceutical company in the United States, Merck, 
was prosecuted for what the US Government called an 
``inadvertent and technical'' violation of the embargo. As a 
result, Merck announced it will never do business with Cuba 
until the embargo is lifted. (2) Similarly, in Miami the US 
government promoted a hotline to engage the public in reporting 
suspected illegal shipments of medications to Cuba. This 
adverse publicity intimidates and further deters other medical 
companies that might wish to sell their products to Cuba. (2,9)

Misrepresenting the World Health Organization:

    Cuba's shortage of medicines and medical supplies, 
according to the State Department's fact sheets, is not the 
result of US policy but rather of the Cuban government's 
``continued adherence to a discredited communist economic 
model,'' which requires a deliberate emphasis on military 
spending at the expense of other priorities such as health 
care. (8,12) In further support of its claim, the State 
Department attributes the following to the Pan American Health 
Organization (the regional office of the World Health 
Organization). ``According to the Pan American Health 
Organization [PAHO], the Cuban Government currently devotes a 
smaller percentage of its budget for healthcare than such 
regional countries as Jamaica, Costa Rica and the Dominican 
Republic.'' (8,12) When PAHO was notified of this claim 
attributed to them, they rejected ownership. Furthermore, PAHO 
responded by issuing a report that refuted the State 
Department's claim that Cuba spends less on health care than 
the countries named by the State Department. (20) Indeed, Cuban 
governmental expenditures on health as a share of GDP are 
higher than for any other country in Latin America and are some 
34% higher than the United States.(9) On July 29, 1997, 
Secretary of State Madeleine Albright was informed of PAHO's 
report. The State Department did not bother to set the record 
straight in its revised fact sheet of August 5 and has not done 
so since.
    Congressman Torres wrote to Secretary Albright asking for a 
reference for the data State Department attributed to PAHO. 
Neither of the two sources cited by the State Department 
compared all four countries for the relevant health economics. 
(21,22) In fact, one of the references cited by the State 
Department states that ``health has been a priority of the 
(Cuban) Government for three decades.'' (21)
    Recently, the American Public Health Association reported, 
``Even in the worst economic times, Cuba has consistently made 
health a top priority and has allocated the funds necessary to 
maintain the health system. While other countries throughout 
the world responded to global recession by cutting back on 
resources dedicated to health, Cuba has sustained its 
investment in health.'' Fidel Castro's concern for public 
health has been recognized by the World Health Organization. 
(9,23)
    Aside from a country's commitment of financial resources to 
health care, medical outcomes and the efficiency of the overall 
healthcare system are important. The indicator most often used 
by the United Nations to assess a country's overall health 
status is the under-age-five mortality rate. Cuba compares to 
the US for this health indicator, ahead of all other Latin 
American countries. Cuba has a per capita Gross Domestic 
Product lower than any of the other Latin American countries 
named by the State Department and less than one-twentieth of 
the United States. The figure shows that Cuba has achieved a 
remarkable position in the world for health care of its 
children.
    However, the US embargo has a direct impact on the life 
expectancy of the people in Cuba. As Jose Teruel, a physician 
who monitors Cuba for the World Health Organization, has 
remarked, ``You're probably talking about a shortening of lives 
through the embargo, denying people medicines and care who 
would have better care in a normal situation.'' (24) Indeed, a 
recent report has noted an increase in the number of deaths in 
the elderly Cuban population. (25) Preferential distribution of 
scarce goods and priority programs for children and women will 
continue to increase the vulnerability of elderly people.

Other Consequences of the Embargo:

    In 1992, the U.S. government ignored a warning of the 
American Public Health Association that tightening the embargo 
would lead to an abrupt cessation of supplies of food and 
medicine to Cuba resulting in widespread ``famines.'' In fact, 
five months after the passage of the Act, this century's worst 
epidemic of neurological disease due to a food shortage became 
widespread in Cuba. More than 50,000 of the 11 million 
inhabitants were suffering from optic neuropathy, deafness, 
loss of sensation and pain in the extremities, and spinal 
disorder that impaired walking and bladder control. (2) In 
1995, the Human Rights Commission of the Organization of 
American States (OAS) wrote Washington that the provisions of 
the U.S. embargo aimed at restricting Cuba's access to medical 
products create such bureaucratic and other requirements as to 
render these products ``virtually unattainable'' in Cuba. 
Further, the OAS wrote that the United States government was 
violating international law and universally recognized human 
rights by denying food and medicine to the Cuban people. The 
commission asked the United States to take immediate steps to 
lift the embargo on food and medicine. To date, the U.S. 
government has not responded to the letter. (2)
    Recently, the Clinton Administration took a small step 
toward improving shipment of food and medicine to Cuba by 
proposing the restoration of direct charter flights for 
humanitarian purposes between Miami and Havana. Global Links is 
one of the largest U.S. donors of medical aid to Cuba. Since 
1994, it has donated 29 ocean containers (tractor-trailor 
loads) of medical aid to Cuba worth over $24.5 million. Yet, 
the difficulties and expenses of shipping from the U.S. are 
enormous. Consequently, this donor of medical aid to Cuba will 
continue to ship US-origin medical supplies from Canadian ports 
to avoid difficulty and the prohibitive cost of airfreight. 
(Smith B, Global Links, Pittsburgh, Pennsylvania; personal 
communication). The CDA prohibits ships that have landed in 
Cuba from docking in the U.S. for 6 months, which impedes the 
delivery of humanitarian donations to Cuba. Yet State 
Department fact sheets claim that the CDA ``encourages the 
donation of humanitarian supplies to the people of Cuba, 
including medicine, food, and clothing.''

                               Conclusion

    The State Department has the obligation to defend US 
Policy. But it does not have the obligation to purposely 
misrepresent the facts, especially if the misrepresentations 
and distortions are used to defend a policy of blocking a 
civilian population's access to the basic necessities of life 
(food and medicine) in the midst of a severe economic crisis. 
Since July 19, 1997, the State Department has been confronted 
on numerous occasions with the errors contained in its ``Fact 
Sheets.'' Their pattern of never admitting their errors and 
only making partial corrections when confronted with documents 
which clearly refute their claims suggests a deliberate intent 
to cover-up and deceive the public if not the U.S. Congress. 
Our research indicates both the distortion of data from the 
World Health Organization and significant discrepancies between 
the amount of medicine actually authorized for delivery to Cuba 
by the Departments of Treasury and Commerce and the amount 
claimed by the State Department. It is time to set the record 
straight. We believe it would be most appropriate for the U.S. 
Congress to investigate what has become a de facto policy of 
denying medicine to the Cuban people.

                               References

    N.B. For all references cited, the source documents are on file 
with the Committee on Ways and Means of the U.S. House of 
Representatives

    1. Cuban Democracy Act appears at title XVII 1993 National Defense 
Authorization Act, Oct. 23, 1992
    2. Kirkpatrick AF. Role of the USA in shortage of food and medicine 
in Cuba. Lancet 1996; 348: 1489-91
    3. The Lancet (Editorial). Sanctions on health in Cuba. Lancet 
1996; 348: 1461
    4. American Association for World Health. Impact of US embargo on 
health and nutrition in Cuba. Washington DC: American Association for 
World Health, 1997
    5. US House of Representatives. Cuban Humanitarian Trade Act of 
1997, H.R. 1951, Washington DC, June 18, 1997.
    6. US Senate. Cuban Women and Children Humanitarian Relief Act, S. 
1391, Washington DC, Nov. 6, 1997.
    7. US House of Representatives. Free Trade with Cuba Act, H.R. 
3173, Washington DC, Feb. 5, 1998
    8. US Department of State. Fact Sheet; The US Embargo and Health 
Care in Cuba: Myth Versus Reality. Washington DC, May 14, 1997.
    9. Kirkpatrick AF, Vanden HE. The US embargo and health care in 
Cuba: Assessing the May 1997 State Department Report. Latin American 
Studies Association Forum 1997; 28: 6-10
    10. US Department of State. Freedom of Information Act Request, 
Office of IRMPS. Letter to Secretary of State Madeleine Albright. 
Washington DC, July 29, 1997.
    11. Monmaney T. Study criticizes medical embargo against Havana. 
Los Angeles Times. July 24, 1997
    12. US Department of State. Fact Sheet; The US Embargo and Health 
Care in Cuba: Myth Versus Reality. Revised and updated. Washington DC, 
Aug. 5, 1997.
    13. Willon P. Cuba policy affects medical shipments. Tampa Tribune. 
Jan. 27, 1998
    14. US Department of State. Freedom of Information Act Request, 
Office of IRMPS. Letter to Secretary of State Madeleine Albright. 
Washington DC, Sept. 5, 1997.
    15. US Department of State. Freedom of Information Act Request, 
Office of IRMPS. Letter from Michael Ranneberger. Washington DC, Sept. 
15, 1997.
    16. US Department of State. Freedom of Information Act Request, 
Office of IRMPS. Letter from Rochelle Zail. Washington DC, Oct. 15, 
1997.
    17. US Department of Treasury. Freedom of Information Act Request, 
Treasury Disclosure Office. Letter from Richard Newcomb. Washington DC, 
Mar. 24, 1998
    18. US Department of Commerce. Freedom of Information Act Request, 
Commerce FOIA Office. Letter from James Lewis. Washington DC, Jan. 12, 
1998
    19. US Department of State. Freedom of Information Act Request, 
Office of IRMPS. Letter from Barbara Larkin. Washington DC, Jan. 16, 
1998
    20. Pan American Health Organization. General Health Expenditures 
in Cuba. PAHO Public Policies and Health Program, Ref. HDP-HDD-C/63/1 
USA (097-97). May 22, 1997
    21. Pan American Health Organization. Health Conditions in the 
Americas. Pan American Health Organization, Washington DC. 1994, pp. 
166 and 276.
    22. World Development Report, 1993: Oxford University Press, New 
York pp.258
    23. Kirkpatrick AF. The US attack on Cuba's health. Can Med Assoc J 
1997; 157: 281-84
    24. Collie T. Doctor attacks Cuba embargo. Tampa Tribune. Nov. 29, 
1996
    25. Garfield R, Santana S. The impact of the economic crisis and 
the US embargo in Cuba. Am J Public Health 1997; 87:15-20

       Table. LICENSES FOR EXPORT TO CUBA EFFECTIVE AUGUST 5, 1997
------------------------------------------------------------------------
                                            #          #        ONSITE
            TYPE OF LICENSE              LICENSES  COMPANIES  INSPECTION
------------------------------------------------------------------------
COMMERCIAL SALES......................          8          3         YES
DONATIONS.............................         14          ?          NO
PRE-CDA COMMERCIAL SALES..............          9          2          NO
                                       ---------------------------------
    TOTAL EXPORT LICENSES.............         31
------------------------------------------------------------------------
Data from documents obtained through a Freedom of Information Act
  request to the Office of Foreign Asset Control the U.S. Department of
  Treasury, March 24, 1998, and the Bureau of Export Administration the
  U.S. Department of Commerce, January 12, 1998. As noted in text, all
  sales to Cuba's public health system require onsite inspections. This
  requirement does not apply to U.S. companies who donate or sell to US-
  approved non-government organizations (NGOs) intending to donate the
  medical supplies to the Cuban people. ``Pre-CDA Commercial Sales'' are
  defined by the Treasury Department as licenses that were exempt from
  the requirements of the 1992 Cuban Democracy Act because they were
  contracts negotiated prior to the implementation of the Act. The
  Commerce Department will not allow independent verification of the
  recipient of its ``exported'' medical products. Therefore, the total
  number of medical companies licensed by Commerce to export donations
  to Cuba is not known.


The authors wish to acknowledge the assistance of Jane Franklin 
in preparing an earlier draft of this research and to thank Dr. 
Hans Rosling for assembling the data and preparing the Global 
Health Chart that is found at the end of this report.
      

                                


[GRAPHIC] [TIFF OMITTED] T5762.023

[GRAPHIC] [TIFF OMITTED] T5762.024

      

                                


Statement of Hon. Gerald D. Kleczka, a Representative in Congress from 
the State of Wisconsin

    Mr. Chairman, I appreciate your holding this important 
hearing on the United States' economic and trade policy toward 
Cuba. In the wake of the Pope's recent visit to Cuba, this 
hearing will provide a timely and important review of these 
important policies.
    In previous Congresses, I have cosponsored legislation to 
repeal the embargo of U.S. trade with Cuba and the Cuban 
Democracy Act of 1992 which further tightened trade sanctions. 
I have also cosponsored legislation to exclude food, medicine, 
and medical equipment from the embargo.
    The embargo against Cuba in not only inhumane and unfair to 
the Cuban people, it is also hurting our nation. Banning the 
import of food and medicine only makes the Cuban people 
innocent pawns in a long and fruitless political standoff. As 
the Los Angeles Times wrote, ``In Castro's long reign, the 
people of Cuba have suffered under an obsolete economic and 
political system that has deprived them of their most 
elementary freedoms. Their plight has been exacerbated by the 
embargo which has made life more painful while failing to 
rewrite political realities.''
    The misguided embargo has cost Americans jobs and missed 
economic opportunities because it has prevented American 
businesses from entering the Cuban market. While more than 100 
nations are encouraging investment and commercial development 
in Cuba, American businesses are forced to stand on the 
sidelines. Despite the potential for economic gain, the 
Department of Treasury still clings to the belief that to 
``isolate Cuba and deprive it of U.S. dollars'' is the best way 
to bring about change in that nation. Desperate for access to 
Cuban markets, American businesses are entering into agreements 
with foreign companies.
    In recent months, we have seen a few rays of hope the 
embargo might be lifted. The Pope's visit highlighted the 
plight of the Cuban people. On March 24, 1998, President 
Clinton announced four changes in U.S. policy that will help 
direct more humanitarian aid to Cuba.
    Mr. Chairman, I hope this hearing will again stress the 
need to lift the U.S. embargo against Cuba. After more than 
three decades, the U.S. embargo has done little besides punish 
the Cuban people and deepen their resentment against the United 
States. Cuba has not changed its political system and Fidel 
Castro's resolve has shown little sign of weakening.
    It is in the best interest of no one to continue the 
current policy against Cuba. At the very least, Congress should 
work to remove the embargo against food and medicine. Allowing 
food and medicine into Cuba would be a good first step in 
restoring relations with the Cuban people and developing a 
sensible economic policy between the United States and Cuba.
      

                                


Statement of Lloyd Moore, Executive Director, Trident South 
Corporation, Yazoo City, Mississippi and Executive Director, 
Mississippi Black Farmers and Agriculturists Association

    My name is Lloyd Moore. I am Executive Vice President of 
Trident South Corporation in Yazoo City, Mississippi and 
Executive Director of the Mississippi Black Farmers and 
Agriculturists Association. I am also the co-chair, along with 
Hayes Dent, legislative aide to Mississippi's Governor Fordice, 
of the Mississippi State Council of the National Americans For 
Humanitarian Trade With Cuba coalition.
    We are working hard with this coalition because we believe 
that people in Cuba who need the life-sustaining food we 
produce in the Mississippi Delta should have the right to buy 
it. We also believe our small farmers should have the right to 
sell products to our natural market.
    Cuba is a market that some people in other parts of the 
country might say is insignificant. But to farmers in 
Mississippi, Cuba represents a real economic opportunity that 
could raise the quality of life significantly for Mississippi 
Delta families.
    In our community, we grow lots of rice. Recently, 
competition for markets has become absolutely fierce. Times 
have been tough. Times could get a lot tougher. The recent Fair 
96 law will cut agriculture consumer subsidies by the year 
2002. We are being asked to change with the times, and we are. 
That is why, in the Misssissippi Delta, our new philosophy is 
`rooted locally, working globally.' To keep our loyal and hard-
working labor force going, we must continue to explore new 
market opportunities worldwide.
    The freedom to sell our rice to Cuba could mean millions in 
annual exports for Mississippi at a time when our farmers badly 
need such sales. According to international estimates, Cuba 
currently annually imports $500 million in raw foodstuffs and 
another $200 million in processed food. Trade with Cuba would 
improve the quality of life for our communities by giving us 
the economic ability to educate our children and make a better 
future for ourselves.
    The human need that exists in Cuba can help us fulfill the 
economic needs not only of rice farmers in Mississippi, but 
struggling farms in Arkansas, Alabama, Louisiana, and up the 
Mississippi River. Since so many Americans would benefit from 
such trade with Cuba, we have to ask ourselves how is it that a 
small but very wealthy community in Miami can dictate a policy 
that 40 years has thwarted our communities' ability to prosper 
and grow.
    Those who seek to prevent U.S. farmers and businesses from 
selling food to Cuba say there is no problem in Cuba, while at 
the same time they recognize there is a problem by trying to 
devise ways to send more charity to Cuba. Aid is not the 
answer. Trade is the answer. Using taxpayer dollars to send 
more aid to Cuba when the Cubans stand ready to pay an honest 
price is an affront to our communities. We should not be taking 
U.S. citizens off welfare and trying to put Cubans on. We 
shouldn't be taking subsidies away from American farmers and be 
talking about subsidizing the Cubans.
    We applaud President Clinton's recent actions that 
recognize there is a humanitarian need to be fulfilled in Cuba, 
and his recent statements in support of food and medical sales 
to Cuba. We feel that it is high time for the representatives 
and senators who we elected to represent our interests pass a 
law that will allow such sales to occur. Not just because it 
would make a big difference for our noble communities, but 
because it is the right thing for us to do as Americans.
    As a representative of thousands of Mississippi Delta 
farmers, I make an appeal based on good Christian principles 
and good common sense: let's stop wasting everyone's time 
adding more bureaucratic layers to an already faltering system. 
Let's sell Cubans the food and medicine they need for their own 
good, and for our own.
      

                                


Madres y Mujeres Anti-Represion Por Cuba (M.A.R. POR CUBA)  
                                                           
                                Key Biscayne, Florida 33149
                                                       May 18, 1998

The Hon. Philip M. Crane, Chairman
Trade Subcommittee
Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515

    Dear Chairman Crane:

    It is unfortunate that the voiceless in Cuba, as well as the Cuban 
exile community were not present at your May 8th hearing on Cuba's 
trade policies. However, we appreciate this opportunity to write to you 
on behalf of the most vulnerable victims of repression in our island, 
such as political prisoners and their families; members of the internal 
opposition movement; dissidents; human rights' activists and 
independent journalists.
    As a group of Cuban exile mothers and women, we are greatly 
concerned, among other critical issues, with the situation of Cuban 
women political prisoners in our homeland, and we are committed--
together with many exile organizations as well as opposition and human 
rights' groups inside the island--to continue an international 
solidarity campaign on their behalf, and to serve as a voice for these 
Cuban women whose voices can not be heard.
    These women are subjected to deplorable and inhumane conditions; 
they are systematically separated from their family nucleus when 
transferred to prisons in provinces far from their homes; their 
families suffer constant harassment by the repressive forces of 
Castro's regime; they lack critical medical attention; and they are 
unjustly and arbitrarily condemned to lengthy sentences and extensive 
periods of time without seeing their children.
    An example of this is Marta Beatriz Roque Cabello, one of the 
authors of ``The Homeland Belongs to All,'' a document written in 
response to Cuba's V Communist Party Congress' Manifest, who is still 
in the women's prison of Manto Negro presumably charged with ``enemy 
propagada'' and has yet to be tried. Beatriz is extremely sick, and is 
denied the medical attention she desperately needs. As in the case of 
Sebastian Arcos, who recently died of cancer in exile because he was 
medically not treated while a political prisoner in Cuba's jail, time 
is running out for Beatriz. Although it may be the difference between 
life and death, she courageously refuses to leave Cuba as a condition 
for her release. Unfortunately, Marta Beatriz was not heard at the May 
8th hearing.
    We are witnessing a monumental campaign undertaken by interests 
other than the interests to achieve democracy in Cuba. These interests 
would lead us to believe that their concerns are ``humanitarian'' in 
nature. All too sadly, the ``humanitarian aid'' legislative proposal 
known as the Dodd-Torres bill will unlikely reach the most vulnerable 
victims of repression, such as Marta Beatriz Roque Cabello. While these 
individuals and groups are actively promoting the unilateral lifting of 
economic sanctions--purportedly to ease the suffering of the Cuban 
people--they remain conspicuously blind to the crimes being perpetrated 
against men, women and children, and silent to demand fundamental 
liberties and denounce the human rights violations committed by 
Castro's regime against our people.
    U.S. current law exists to promote a genuine democratic transition 
in Cuba. The embargo that needs to be lifted and the one that we 
advocate to lift, is the one imposed by Castro upon the Cuban people. 
As it is painfully evident, ``Cuba is open to the world'' courtesy of 
Castro and his regime, which have assured that it is opened up to all 
those who come to exploit its slave labor, its apartheid, its fertile 
soil, its confiscated properties, its sexual tourism, its women and its 
children. Foreigners with dollars have access to anything and 
everything, while Cubans are systematically discriminated against. What 
needs to be demanded is that Castro ``opens Cuba to the Cuban people.'' 
Only then should the economic sanctions be lifted. To do otherwise 
would only prolong Castro's tyranny and deny Cuba's right to 
sovereignty.
    We are submitting for the record of the May 8th hearing a copy of 
the letter that Marta Beatriz wrote from within prison on toilet paper, 
as well as the transcript of the tape recorded by Vicky Ruiz Labrit, 
who heads one of the womens' opposition groups in Cuba.
    We respectfully request that the voices of opposition within the 
island as well as Cuban-Americans be included in any future 
Subcommittee hearings concerning Cuba.
    We thank you for your attention, and remain,

            Sincerely,
                                            M.A.R. POR CUBA
                                          Sylvia G. Iriondo
                                                          President
SGI:gf
encs.
      

                                


`Each Cuban has a built-in policeman'

    FROM A CUBAN PRISON--To describe \1\ how one spends the day 
in this penitentiary is easy: Everything becomes routine. A 
change in the schedule is practically an event. Each of the 
women prisoners (about 700) constantly asks herself: How long 
will I be here?
---------------------------------------------------------------------------
    \1\ Article which appeared Wednesday, April 15, 1998 on page 17A, 
in The Miami Herald by Martha Beatriz Roque Cabello, one of the authors 
of ``The Homeland Belongs to All.'' Martha Beatriz Roque Cabello, an 
economist, is a leader of the Domestic Dissidents Working Group, a 
federation representing 14 of the largest dissident groups in Cuba. She 
was arrested on July 16, 1997, charged with ``counterrevolutionary 
activity,'' and still awaits trial. Her letter, handwritten in prison 
on toilet paper, is reprinted from El Nuevo Herald.
---------------------------------------------------------------------------
    Only 15 days ago I was transferred to the wing for hardened 
criminals, although it would have been logical to have kept me 
in the preventive-detention wing.
    The answer to my question ``Why the change?'' was simple: 
``You're closer to the infirmary; these are people who behave 
(i.e. on good behaviour); and it's an order.''
    I'm supposed to go to the infirmary to get magnetotherapy 
for my breasts, but the truth is that they don't take me, even 
though I've complained to everyone willing to listen. The 
doctor recommended 20 sessions--I've had only nine, and it has 
been a hassle.
    I'm a political prisoner, but because that status is not 
acknowledged here, I'm called a ``CR''--a counterrevolutionary. 
My cell sisters are common prisoners, five in all: three are 
serving time for murder (25, 18, and 15 years, respectively), 
one for attempted murder and battery (14 years), and another 
for fraud (five years, four months).
    A simple analysis of their situation would lead you to 
think that they'd do anything to shorten their long term of 
imprisonment or gain some sort of benefit. For example, as a 
reward for their recent participation in a political meeting 
about the Pope's visit to Cuba, they got an additional family 
visit.
    Compare this with people on the outside who--to hold on to 
their jobs--cling to their membership in organizations for the 
masses, careful to maintain their political participation and 
to submit to the slogans and goals set by the government. Only 
doing this will they be rewarded with a job that gives access 
to hard currency, a bag of toiletries, or just any job.
    Those who don't live in Cuba find it difficult to 
understand that the system maintains its political control 
principally through self-repression. Each Cuban has a built-in 
policeman. This complex mechanism whereby one assumes the 
conscience of a hunted person has been developed and perfected 
for almost 40 years. To those who see it from afar, it's almost 
imperceptible.
    I had never been in prison before, but the past eight 
months have given me access to this small world and to 
firsthand knowledge of the violation of human rights and 
legality. If this documents finds its way out of this prison, 
it will be proof that there are those here who dissent.
    The re-educator assigned to me--a woman officer with the 
rank of major, age 50, brown-skinned, with a face that 
proclaims her humble peasant origin--warned me that I was 
forbidden to talk about political subjects, that my ideas had 
to remain in my head, as confined as I am. You oppositionists 
are just five or six, she said, as opposed to 11 million Cubans 
who don't want to change their flag, an allusion to the yanquis 
who can't stop reaching out to those who want democratic 
transformation in this country. The end of her speech was 
devoted to a suggestion that we leave the island: ``What you 
need to do is go away and not waste your life in prison.''
    If that is so, a question arises: If we mean nothing to the 
political stability of the system, why then are we repressed? 
Why are we jailed? Why should we emigrate if we're so 
outnumbered by the people? Why is it necessary to imprison our 
ideas?
    After the daily schedule--prisoner count, inspection, 
breakfast (tea or cereal), unsavory meals, sitting in the sun, 
and girl-inmate talk--we have ``free'' time for reflection.
    I can't write every day. The few times that I have written, 
there have been unpleasant conserquences not only for me, who 
chose the path of struggle, but also for my family, my closest 
collaborators, and even my defense attorney.
    Today is a day like any other. Yet, inside my cell, my 
independent thought accompanies me. It matters not that they 
shut it in, that they repress it. As long as it can be infused 
onto paper, it will try to find an exit, even if the spaces of 
time are lengthened.
[GRAPHIC] [TIFF OMITTED] T5762.025

      

                                


Statement of Vicky Ruiz Labrit, Havana, Cuba, Recorded on March 8, 1998

    ``To the international public opinion:
    The voices of the Cuban sisters in exile are the faithful 
echo of the cry that women in Cuba fighting for human rights 
elevate. With it, we launch to the world this petition of 
support for the salvation of women prisoners of conscience that 
suffer within the prisons of Fidel Castro. Women that being 
daughters, wives, sisters or mothers, without fear to pain, 
have stood firm to uphold a homeland that suffers because it 
has no liberty, because it yearns for harmony and peace, 
because it can no longer endure the hunger for dignity and 
rights.
    Free citizens of the world, listen to this uprising clamor 
and unite your voices so that torture does not continue in this 
Cuban land. In every woman that suffers an unjust sentence 
there is a piece of this homeland; in every beating, 
humiliation or death is the martyrdom and affliction of our 
people.
    This month, dedicated internationally to women, should be a 
month where no one is left without joining efforts against so 
much ignominy. May this petition for help be heard throughout 
the world so that these Cuban women be freed from their unjust 
sentences.
    These noble women need no pity, but liberty.
    Thank you, I am Vicky Ruiz Labrit, on behalf of all the 
organizations and groups that signed this Declaration, from the 
Republic of Cuba.''
      

                                


Urgent Petition \1\ to the International Organizations for Human 
Rights, Cuban Exile Community and All Women

Cuban Women To Join Efforts to Petition Support for Women Political 
Prisoners of Conscience that Have Not Been Released

    It is not an act of clemency or good will the ``pardons'' 
that the government of Fidel Castro has instrumented in the 
last few months as an attempt to obtain the good graces of 
heads of state, a common practice of the Cuban government with 
its hostages: the political prisoners of conscience.
---------------------------------------------------------------------------
    \1\ English Translation.
---------------------------------------------------------------------------
    It is an outrage that within two years of the next 
millennium Cuba maintains in its prisons more than one hundred 
thousand prisoners and another significant number of detainees 
at adjacent interrogation facilities. In proportion, the penal 
population on the island is one of the largest in Latin 
America, even more criminal still is the harassment that is 
suffered by political prisoners, especially women.
    Very few women have been released during the last days, and 
a significant numer of women still remain serving unjust 
sentences. In light of so much injustice and infamy, we join 
our voices of opposition so that the world may know the 
spiteful and undignified manner in which Cuban political 
prisoners are treated.
    We call on all free citizens of the world to join in 
support of these women who suffer.

            Signed Within Cuba:

                       Organizations Within Cuba:

Alianza Democratica Popular (ADEPO)
Asociacion Humanitaria Seguidores de Cristo Rey
Asociacion Pro Democracia Constitucional
Asociacion de Lucha Frente a la Injusticia (ALFIN)
Comite Cubano de Opositores Pacificos
Centro de Estudios de la Familia
Colegio Medico Independiente
Corriente Liberal Cubana
Foro Feminista
Frente Democratico Oriental
Frente Femenino Humanitario Cubano
Movimiento de Madres por la Solidaridad
Movimiento Democratico Accion Nacionalista
Movimiento Pro Derechos Humanos Golfo de Guacanayabo
Movimiento Solidaridad y Paz
Organizacion de Cristianos Sociales de las Provincias Orientales para 
la Atencion de la Mujer
Organizacion Feminista Independiente (OFI)
Periodista Independiente de CUBA PRESS: Ana Luisa Lopez Baeza

                        Organizations in Exile:

Agenda: Cuba
Alianza de Jovenes Cubanos
Coalicion de Mujeres Cubanoamericanas
Coordinadora Internacional de Prisioneros Politicos Cubanos
Cuba Independiente y Democratica (C.I.D.)
Directorio Revolucionario Democratico Cubano
Ex-Club (Asociacion de Ex-Prisioneros y Combatientes Politicos Cubanos)
Ex-Confinados Politicos de la U.M.A.P.
Federacion Mundial de Presos Politicos Cubanos
Frente Nacional Presidio Politico Cubano
Grupo de Trabajo de la Disidencia Interna
M.A.R. Por Cuba (Madres y Mujeres Anti-Represion por Cuba)
Movimiento Democracia
Mujer Cubana
Mujeres Luchadoras por la Democracia
Presidio Politico Historico Cubano-Casa del Preso
Sociedad Internacional de Derechos Humanos
and ex-political prisoners, organizations, support groups and activists 
who are joining this urgent petition...
      

                                


Fundamental Objectives of the International Campaign of Solidarity with 
the Women Political Prisoners within Castro's Prisons during the 
International Month for Women

    Considering that the Cuban political prisoners are serving 
arbitrary and unjust sentences simply for dissenting from the 
official policy of the regime which rules the Island of Cuba, 
we aspire with this campaign to:
     To denounce the deplorable and inhumane conditions 
that women political prisoners are subjected to in Cuba.
     To denounce the manner in which women political 
prisoners (mothers, wives, daughters, sisters) are 
systematically separated from their family nucleus when they 
are transferred to prisons in provinces far from their homes.
     To inform as to the precarious circumstances 
suffered by the families of these women political prisoners and 
the constant harassment they endure by the repressive forces of 
the regime.
     To denounce the lack of medical attention suffered 
by women political prisoners with health problems.
     To denounce the efforts to irritate and enrage the 
women political prisoners with small children, condemning them 
to lengthy sentences in prisons and extensive time periods 
without seeing their children.
    As women, on the island and in exile, we are committed to 
continue this international campaign and to serve as a voice 
for these Cuban women whose voices cannot be heard.
      

                                


Statement of Beatriz M. Olivera, Harris Kessler & Goldstein, in Support 
of H.R. 1951

[GRAPHIC] [TIFF OMITTED] T5762.026

      

                                

Statement of Oxfam America

  Oxfam America calls on U.S. legislators to lift the ban on food and 
                         medicine sales to Cuba

    Oxfam America supports the self-help efforts of poor and 
marginalized people--landless peasants, indigenous peoples, 
women, refugees and survivors of war and natural disasters--
striving to better their lives. Since 1970 Oxfam America has 
disbursed more than $100 million in grants and technical 
support to hundreds of partner organizations in Africa, Asia, 
the Caribbean and the Americas, including the United States.
    In Cuba, Oxfam America seeks to promote long term 
development by supporting the work of community organizations 
attempting to develop sustainable organic methods of 
agricultural production in rural and urban areas. Since the 
onset of the economic crisis of 1990, Cuba has effectively 
joined the ranks of the most food insecure countries of the 
world. Studies have shown that:
     the contraction of the Cuban economy has lessened 
Cuba's capacity to import the fuel, repair parts, intermediate 
goods, raw materials and consumer goods necessary to produce 
food domestically and thereby adequately meet the nutritional 
needs of the Cuban population;
     national food availability in Cuba fell by about 
one third between 1989 and 1995 as high transportation costs 
and the limited availability of hard currency has restricted 
Cuba's ability to obtain food from non-US suppliers;
     food shortages compounded by the trade embargo 
contributed to the deterioration of the Cuban population's 
nutritional intake, with drops in daily caloric intake of 33 
percent and in protein levels by 39 percent during the same 
period;
     the decline in food availability has contributed 
to serious vitamin deficiencies, maternal malnutrition, 
increased low birth weights and a recent neurological epidemic.
    The U.S. trade embargo--by imposing higher production and 
import costs, limiting the availability of hard currency and 
discouraging trade with third countries--has the unintended 
consequence of exacerbating the current food security crisis in 
Cuba, thereby hurting the Cuban people. While lifting the ban 
on US food imports to Cuba does not offer a long term solution, 
it is a step toward alleviating the impact of the current food 
crisis.
    The Cuban people should not bear the costs of differences 
in US-Cuba relations. In the humanitarian interest of 
supporting the health and well-being of ordinary citizens, 
Oxfam America calls on legislators to support the Cuban 
Humanitarian Trade Act (HR 1951) and the Cuban Women and 
Children Humanitarian Relief Act (S. 1392) and lift the ban on 
U.S. sales of food and medicine to Cuba.
      

                                


Statement of Hon. Jose E. Serrano, a Representative in Congress from 
the State of New York

    Thank you for giving me this opportunity to testify today 
on U.S. Economic and Trade Policy Toward Cuba.
    It should come as no surprise to anyone in this room that I 
am opposed to the economic and trade embargo that has dominated 
our government's relationship with Cuba for the past forty 
years. While we continue to encourage trade with China, 
Vietnam, and North Korea, we pursue a closed policy with 
respect to Cuba. The result has been criticism from and a 
weakening of our relationships with Canada, Japan, Mexico, and 
the European Union. Why? Logical reasons for this antiquated 
policy do not exist.
    However, we are now finally seeing movement towards a new, 
more enlightened policy. I applaud these efforts. In January, 
Pope John Paul II visited Cuba and publicly criticized our 
country's embargo. In March, President Clinton announced four 
positive changes to help ease some of the restrictive aspects 
of our policy towards Cuba. Most recently, the United Nations 
Commission on Human Rights for the first time voted against a 
United States resolution criticizing Cuba for human rights 
violations. What is significant is that several countries that 
abstained from the vote last year voted to reject the 
resolution this year. The United States is becoming 
increasingly isolated as it struggles to preserve a policy that 
the international community condemns.
    At the start of the 105th Congress, I introduced H.R. 284, 
the ``Cuba Reconciliation Act,'' to repeal both the Cuban 
Democracy Act of 1992 and the Liberty and Democratic Solidarity 
Act of l996, otherwise known as ``Helms-Burton.'' It is time 
for Congress to pass this important legislation, which would 
move the United States to its rightful place, leading the world 
with a moral and just foreign policy. It is inhumane to attempt 
to starve the Cuban people, punishing them with a trade embargo 
designed to bend their government to our political will. 
Instead, it is time for us to work towards reconciliation.
    We need to start today, at this hearing, to look at our 
current relationship with Cuba and to find the courage and 
flexibility to envision a different future. The Cuban embargo 
has not worked in over 40 years, and it is time to consider 
measures to change our relationship with one of our closest 
neighbors. A good first step is passage of H.R. 1951, 
legislation that I have cosponsored, to end the embargo on the 
sale of foods and medicine to Cuba. This is the ultimate 
humanitarian legislation, because its beneficiaries are the 
Cuban people. The United States manages, and rightfully so, to 
sell food to China. Our country, which has long prided itself 
on its humanitarian policies, should immediately make this 
change in our trade policy towards Cuba.
    My position has been consistent. We must end this embargo, 
which has caused enormous suffering to the Cuban people. 
Beginning today, as this topic of trading with Cuba is 
discussed, I hope the Congress can move in this direction and 
accept this historic challenge. Change our dialogue from one of 
hostility to one of openness, and our policy from a strict 
embargo to free trade. Cuba is our neighbor and it is time to 
follow the lead of the Pope and the international community and 
establish a new relationship and a new policy towards Cuba. 
This is the moral and right thing to do.
      

                                


Statement of USA Rice Federation

    The USA Rice Federation is the national trade association 
of the U.S. rice industry and works to advance the common 
interests of this country's rice producers, millers, marketers 
and allied industry segments. The Federation is composed of 
three charter members--the U.S. Rice Producers Group, the USA 
Rice Council and the Rice Millers' Association.

                           U.S. Rice Exports

    Trade has historically been, and will continue to be, 
critical to the U.S. rice industry. The United States exports 
approximately half of the rice it produces, and consistently 
ranks as the second or third leading rice exporter in the 
world. The U.S. share of world rice trade has ranged from 12 
percent to 28 percent. The U.S. industry's largest global 
competitor is Thailand, which maintains an average market share 
of about 30 percent. Today, U.S. rice is sold in over 100 
countries around the world and is widely recognized for 
quality. The United States is also considered a reliable, 
diversified supplier, exporting long, medium and short grain 
varieties of rice with a wide range of processing options.
    Current major export destinations for U.S. rice include the 
European Union (EU), Mexico, Japan, Turkey, Canada, Haiti, and 
South Africa. In addition, the U.S. rice industry is working to 
develop markets in other countries that have provided greater 
market access under the Uruguay Round agreement.

             The U.S. Rice Industry and Global Trade Issues

    Of all grains exported by the United States, rice has been 
hit particularly hard by unilateral trade sanctions. For 
example, before President Clinton's executive order on the U.S. 
trade embargo with Iran in 1995, that country was emerging as 
one of the largest markets for high quality U.S. rice. 
Similarly, the largest importer of U.S. rice in 1989 was Iraq, 
which was closed to U.S. rice exporters by executive order in 
1990. Trade restrictions imposed by the U.S. government, 
however well justified, do impact U.S. rice exporters and 
consequently the entire rice sector in this country. Despite 
occasional exemptions, such as ``general license'' programs, 
trade restrictions currently in force effectively reduce the 
size of the world rice market available to U.S. commercial rice 
exports.

                        U.S. and Cuba Rice Trade

    The recent scenarios in the Middle East have their 
counterpart in the Cuba of 1960. At that time, Cuba was the 
largest single importer of U.S. rice, preferring to buy the 
U.S. product on a commercial basis because of quality, 
proximity and reliable supply. In 1951, Cuba imported a peak 
volume of approximately 250,000 metric tons of U.S. rice which 
represented about half of total U.S. exports at the time. In 
1996, a 250,000 metric ton market for U.S. rice would have 
accounted for approximately 10 percent of total exports.
    Cuba's share of total U.S. exports varied considerably from 
year-to-year, ranging from 17 to 51 percent in the ten-year-
period prior to the embargo in 1963. Since the embargo, Cuba's 
annual imports have averaged around 300,000 metric tons, with 
primary import origins of Thailand, China and Vietnam.
    The type of rice purchased by Cuba from the U.S. was a high 
quality U.S. long grain product. In the years since the 
embargo, Cuba has imported a lower grade product, both long and 
medium grain.
    The U.S. rice industry believes that once the U.S. 
government has lifted the embargo, Cuba will again become a 
significant market for U.S. rice. Because of the structural 
changes that have occurred in Cuba and changing food 
consumption patterns, it is possible that a post-embargo Cuba 
may not immediately be in a position to import commercially the 
same high quality U.S. rice it had in the past. However, the 
U.S. rice industry views the Cuban market as one of great 
potential.
    Once the embargo is no longer in place, the U.S. industry 
will expect to re-enter the Cuban market and will work closely 
with the U.S. government to make use of any government programs 
which may assist in maximizing potential gains in this 
important market.

                               Conclusion

    The U.S. trade sanctions currently in force for Cuba are 
allowing other rice exporting nations such as Thailand and 
Vietnam to gain major competitive advantages over the U.S. rice 
industry. Furthermore, USDA estimates that more than 13 percent 
of projected global rice import demand will be subject to 
unilateral trade sanctions in the 1997/1998 crop marketing 
year. This represents a significant degree of lost marketing 
opportunities for the U.S. rice industry.

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