On December 17, President Obama announced that the United States would normalize relations with Cuba. Before relations are entirely healed, the US Treasury and other related agencies are required to complete certain business-related tasks. The Treasury Department Office of Foreign Assets Control, for example, will enact its treasury specific changes in the form of amendments to the Cuban Assets Control Regulations. The Department of Congress will additionally need to enact changes through amendments to Export Administration Regulations. However, these changes will improve the Cuban private sector as a whole and make it much less difficult for its citizens to access inexpensive goods while becoming more independent from Cuba.
The trade embargo against Cuba was enacted in 1960 by President John F. Kennedy in order to destroy the Cuban dictatorship, or at a minimum improve its behavior. Despite these goals, the US government and numerous other countries admit that the embargo is dysfunctional and did little to improve the governmental conditions of Cuba, as the Castro family reign lasted through almost 11 presidencies in total. A sudden collapse of the Castro regime was found to be unlikely by the Senate, and the embargo did not seem to be empowering the Cuban opposition.
Fortunately, changes will soon be evident due to the agreement made between these two countries. Authorized travelers, for example, will be able to receive generalized licenses for a variety of activities, which include the exportation and importation of information and information materials. In specific figures, this means that US travelers may import $400 in goods from Cuba, but no more than $100 of this can consist of the combination of alcohol and tobacco products. Previously, an across the board ban existed banning all Cuban-origin cigars and tobacco products, even if they were imported through a third-party country such as Canada or Mexico.
US institutions will now be permitted to open correspondent accounts at Cuban financial institutions and US credit and debit cards will be allowed for use within Cuba. US Chamber of Commerce President and CEO Thomas J. Donahue stated that these changes will “go a long way in allowing opportunities for free enterprise to flourish." Improved relations could result in billions in revenue for both countries. The export of US goods to Cuba is projected to peak at $4.3 billion annually (compared to $360 million in 2012), and Cuban exports to the US could go from nonexistent to producing $5.8 billion in revenue per year.
This is not to say that more improvement could not take place. As the embargo still exists, many businesses will need the help of Congress to loosen restrictions on specific exports. The United Nations General Assembly has voted 23 times to demand the United States to remove the embargo, with 188 countries of 193 in favor. The removal of the embargo as a whole could have even greater economic implications for both the US and Cuba, but for now normalizing relations between the two is a good start.