Ab-normalization: Florida Imposes Sanctions on Itself

When Ringling Bros. and Barnum and Bailey Circus folded its tent last month, 400 Floridians lost their jobs. Now, Florida’s Governor Rick Scott appears determined to turn his state’s drive for jobs into a Cuba policy clown show.

Gov. Scott, on the eve of a “jobs summit” that he is staging, unleashed a twitter storm and released a state budget to pressure port officials and cut off funds for port projects to stop Florida ports and businesses from trading with Cuba.

At a time when the Governors of nine states, between 2015 and 2017, have brought trade delegations to Cuba for the express purpose of doing deals and creating two-way trade with Cuba, Gov. Scott, uniquely, seems determined to kill jobs – or prevent jobs from being created – in his own state. Simply because those jobs would depend on Florida having commercial relations with Cuba.

Whether he is acting out of “principle” or acting out of self-interest, Gov. Scott is “acting out” and most abnormally for a government official.

Except. Wait a minute. Tweeting? Pushing people around? Breaking trade deals? This seems awfully familiar.

When it comes to Cuba, Florida – to put it kindly – has always been a paradox unable to come to terms with itself. No state in the union has worked harder to impose sanctions on Cuba, and no state has benefited more from trade and travel with the island.

Since 1959, it has been the center of resistance to the existence of the Cuban system. Now, majorities in the diaspora community and across Florida support an open policy. Florida’s airports, slowly then dramatically, have filled with hundreds of thousands of Cubans and Cuban Americans flying back and forth between the U.S. and Cuba. After the passage of a revised trade sanctions law in 2000, the state’s ports saw off the ships sailing to Havana, and then to Mariel, with containers of food and the other limited but legally traded items U.S. businesses could sell to the island.

Until January, as the U.S.-Cuba Trade and Economic Council points out, it was the state’s policy under Governor Scott to make normal trade with Cuba a priority for Florida’s seaports. “Due to the proximity of the state to Cuba and the cultural ties, expanded trade opportunities could be dramatic.” Some business leaders believed Sunshine State trade with Cuba could one day create 20,000 local jobs.

Yes, trade with Cuba does build profits for U.S. businesses and create U.S. jobs. Not just for Florida. Since these opportunities are also open to ports up and down the Atlantic coast, and along the southeast states on the Gulf, Florida has competition; to preserve and expand employment, it has to keep up its investments in trade with Cuba.

Enter the ringmaster. While others wait for the Trump Administration to review Cuba policy (Reuters says that’s happening now), Rick Scott leapt into the ring.

As officials at Port Everglades and the Port of Palm Beach prepared to welcome Cuban counterparts from Cuba’s National Port Administration and sign Memoranda of Understanding (MOU) to build cooperation between their ports and Cuba, Gov. Scott made it clear he didn’t want Florida ports to make deals with Cuba.

Scott tweeted in English and Spanish, as the Miami Herald reported, “We cannot condone Raul Castro’s oppressive behavior,” and added that he’d ask “state legislators to cut off funding for any Florida ports that ‘enter into any agreement with [the] Cuban dictatorship.’”  This caused the knees of Port Everglades and Palm Beach to buckle; there, officials agreed to meet the Cuban delegation but not to sign the MOUs. And, as we report below, it had the same effect on the Port of Tampa, with a spokesperson even denying it ever planned to sign an MOU with Cuba to a reporter who filed a story with a copy of the agreement in his hands.

Yes, the Scott saga even comes with an alternative set of facts. As Paul Guzzo wrote, “The truth is, according to an internal document obtained by the Tampa Bay Times, Port Tampa Bay had already drawn up a memorandum, gotten approval from the federal office, circulated the word in maritime circles and garnered congratulations for its efforts.”

Deciding, apparently, to enlarge rather than quell the problem, Scott put language in his budget, as the Miami Herald reported, that says no money can be “allocated to infrastructure projects that result in the expansion of trade with the Cuban dictatorship because of their continued human rights abuses.”

The Bradenton Herald slammed the governor for his “inconsistency” for supporting trade with China, and added that “Scott’s threat puts Florida at a competitive disadvantage to ports along the Gulf Coast, East Coast, Caribbean islands and Central America [which are] signing agreements with Cuba.”

We asked Dr. Michael Bustamante, a scholar at Florida International University, to interpret the Governor’s behavior. “It’s clear Governor Scott is returning to an old playbook, one in which U.S.-Cuba policy – or in this case Florida-Cuba policy – is a function of domestic politics, not national or state interests.”

The day Gov. Scott released his budget and doubled down on his investment in stopping bilateral trade with Cuba, the Miami Herald observed, “the first legal maritime shipment from Cuba to the U.S. in more than 50 years” had made its way to Miami-Dade County, after reaching Port Everglades the week before. It was two containers of “artisanal” Cuban charcoal. And more may be coming to a pizza oven near you, even if Governor Scott succeeds in sanctioning businesses in his own state, in the name of shutting down trade with Cuba.

What a circus.

This week, in Cuba news…

U.S.-Cuba Relations

Virginia, Alabama ports ink agreements with Cuba; Florida Governor doubles down on port funding threats

Amid uncertainty about the future of U.S. trade policy, the delegation from Cuba’s National Port Administration met with counterparts at Virginia’s Port of Norfolk and the port of Tampa Bay, and with lawmakers at the U.S. Capitol. The delegation signed a memorandum of understanding (MOU) to further cooperation between the Port of Norfolk and Cuba’s Port of Mariel on January 30th (this builds on an early agreement that Governor Terry McAuliffe signed during his CDA-led trade mission to Cuba in January 2016). On February 2nd officials from the Port of Mobile signed a similar agreement with Cuba’s National Port Authority at trade conference convened in in Tampa. The ports delegation, along with José Ramón Cabañas, Cuba’s Ambassador to the U.S., also met with the bipartisan Cuba Working Group in the U.S. House of Representatives during a brief visit to Washington.

The delegation had previously been expected to sign an MOU with the port of Tampa Bay, but last week a spokesperson for the port asserted that no such agreement would be signed.

Last week, Florida’s Governor Rick Scott threatened via Twitter to cut state funding for Florida ports that entered into agreements with Cuba, effectively scuttling planned MOUs between Port Everglades and the Port of Palm Beach. The Cuba ports delegation came to the U.S. expecting to sign agreements with both ports during its visit; the Florida port meetings occurred, and all parties pledged to continue to seek avenues of cooperation, but the MOUs went unsigned.

On January 31st Governor Scott released a proposed state budget with a provision that prevents funds from being “allocated to infrastructure projects that result in the expansion of trade with the Cuban dictatorship because of their human rights abuses.” The Miami Herald notes this puts $176.5 million for state-funded port improvements at risk. If Gov. Scott’s budget proposal is adopted by the Florida state legislature when it meets in March, the measure would cut funds of up to $37 million this fiscal year and $125 million over five years for Fort Lauderdale’s Port Everglades and, as the Miami Herald reported last week, would result in a potential loss of state funds amounting to $920,000 for the Port of Palm Beach.*

*Note: We’ve corrected the figures we published last week on potential losses of state funding based on new reports.

The Palm Beach Post reported that Ana Teresa Igarza, Director General of the Mariel Port Special Development Zone, invited Gov. Scott to visit Cuba, but a spokesperson for the Governor stated that the Governor would have nothing to do with Cuba “until there is freedom and democracy.”

Agricultural exports bill reintroduced in Senate

Senators Heidi Heitkamp (ND) and John Boozman (AR) reintroduced the Agricultural Export Expansion Act for the 115th Congress, reports AgWeek Wire. If passed, the bipartisan trade bill would allow U.S. exporters to extend credit to Cuba for purchases of agricultural goods. The full list of 11 initial cosponsors is available here. On January 13th, Rep. Rick Crawford (AR-1) introduced a companion measure in the House of Representatives.

In Cuba

Audit of Havana businesses finds losses totaling over $50 million

In an audit conducted between October 31st and December 9th, 2016, Cuba’s Comptroller General found that inefficiencies in state and non-agricultural cooperative enterprises in Havana produced losses of about 51 million in convertible Cuban pesos (CUC, about the same amount in dollars), along with 90 million in Cuban pesos, which is about $3.5 million, according to an official report in Granma.* Miriam Marbán González, head comptroller for the province of Havana, stated that the results of the audit indicate that Cuba has made less progress than hoped for on that front.

The audit report cites inefficiencies in record-keeping, economic planning, and, with regard to the cooperatives, “individualistic conduct,” “lack of foresight and vigilance, and little cooperative culture.” As part of the process of updating its economy, begun in 2011, Cuba has sought to reduce inefficiencies in its state sector.

*Note: The office of the Comptroller General reports losses related to transactions and business conducted in both of the country’s currencies, which is why there are two separate sums reported (we have made the approximate conversions to dollars, as did EFE).

Recommended Reading

In Cuba, app stores pay rent, The Economist

The February 4th issue of The Economist features an article on Los Doctores del Celular, a cellphone repair and app shop in Havana where customers download bundles of 60-70 apps for $5-10 using USB cables connected to computers in the shop. “Cubans are quickly picking up on app culture,” Jorge Luis Roque, an app technician at the shop, told The Economist. The most downloaded apps at the shop include Facebook Messenger and WhatsApp, which many use as more affordable ways to keep in contact with family and friends living abroad, rather than texting and calling.

Making Travel to Cuba Work for Health and Sustainable Development, Conner Gorry, MEDICC

In the January issue of MEDICC Review, Conner Gorry, Senior Editor, reports on an alliance called RESPECT: Responsible and Ethical Cuba Travel, whose members include 100 U.S.-based “institutions, travel agencies and individuals” seeking to “promote mutually beneficial travel policies and align Cuba with the global sustainable travel movement.” Gorry highlights environmentalist and sustainability-focused collaborations that are ongoing and have already occurred between U.S. travelers and institutions and Cuban counterparts on the island. RESPECT founders Bob Guild of Marazul travel company, Gail Reed, founding director of MEDICC, and Walter Turner, president of Global Exchange, announced the establishment of the alliance in a December 14, 2016 press release. MEDICC provides a full list of members here.

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