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Obama takes first steps towards lifting the Cuban trade embargo

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January 29
2:24 AM 2016

On Tuesday, US President Barrack Obama unveiled a new set of regulations that would enable the US businesses to engage in trading activities with the Cuban government. Some, if not all, of the stringent rules have finally been relaxed that would facilitate travel, trade, and finance between the two (once) hostile governments.

The new rules are said to be effective from Wednesday and help Cuba gain some economic independence. As per USA Today, Commerce Secretary Penny Pritzker, who visited the island in October, stated, "These regulatory changes will ... facilitate exports that will help strengthen civil society in Cuba and enhance communications to, from and among the Cuban people."

The news obviously invited critical comments from Congress, who are totally against this move, unlike the Obama administration. Moreover, unless Congress gives consent, a complete abolition of the trade embargo with Cuba is not possible. Senator Robert Menendez, a Cuban-American Democrat, said, "The moves would do nothing to empower the Cuban people and would instead provide their oppressors the resources they need to tighten their grip," according to The New York Times. "Today's action by the administration is a contravention of the law - the will of Congress, and the people who elected us, and a betrayal to those brave Cubans who have raised their voices in support of freedom, only to be silenced by a regime we are now helping."

However, the Obama administration are convinced that this is the best way to improve the conditions of the island as well as strengthen the ties between the two governments. One very noticeable change is Cuba can now pay for the US goods easily. Previously, the islanders would have to make an up-front cash payment or route the purchase through a third country - an extremely taxing and arduous process. Banks will now finance directly for such exports, removing one of the biggest barriers to direct trade.

The high point, of course, would be the US businesses can now directly sell to Cuban state-owned enterprises. However, Obama has carefully excluded the communists and military personnel who also run many state-owned enterprises from the trade equation. In short, US can only sell to government agencies who help Cuban people in the fields of education, agricultural production, public health, public transportation, food processing, sanitation, residential construction, disaster preparedness energy production, and water supplies. But any kind of sale for tourism is still a no-no.

Another rule allows the US citizens to go to the island and organize various events like conferences, sports competitions or movie shoots. Before this, they could only attend such events.

As travel restrictions become more relaxed, the US airlines can work easily with their Cuban counterparts to come up with the commercial flight schedules, which have increased manifold. The US State Department has struck a deal with Cuba to have around 110 roundtrip flights a day.

As such, Treasury Secretary Jack Lew said in the statement, "Today's amendments to the Cuban Assets Control Regulations build on successive actions over the last year and send a clear message to the world: the United States is committed to empowering and enabling economic advancements for the Cuban people," as represented in Havana Times.

While the US has done more than their bit to end the age-old cold war between the two countries, Cuba is also expected to meet them halfway to make this work. Ned Price, a spokesman for the National Security Council, said, "Just as the United States is doing its part to remove impediments that have been holding Cubans bank, we urge the Cuban government to make it easier for its citizens to start businesses, engage in trade, and access information online." 

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