President Moves to Normalize Travel and Trade to Cuba

President Obama announced Dec. 17 that he would make efforts to ease travel and trade restrictions to Cuba in an effort to empower “Cubans to build an open and democratic country.” The White House has expanded the list of authorized travelers to Cuba and has authorized new goods and services to be exported to Cuba. The departments of Treasury and Commerce have jurisdiction over many of these regulatory changes, and each department submitted its final rules to the Federal Register Jan. 16. The final rules take effect immediately.

Key regulatory changes include:

  • Authorized travel: Certain individuals who travel to Cuba will not need to obtain a special license. Instead, many individuals may apply for a general license subject to certain conditions.
  •  Travel and Carrier Services: Travel and air carrier services will be authorized by the travel agents and airlines without acquiring a specific license.
  • Insurance: U.S. insurers will now be able to provide coverage for individuals who reside in a third country and travel to or within Cuba who seek global, health, life or travel insurance policies.
  • Importation of Goods: Authorized travelers will be able to bring back up to $400 worth of personal goods from Cuba.
  • Telecommunications: A general license will be issued to facilitate the establishment of commercial communication facilities in Cuba. Also, the exportation of items that improve the Cuban people’s ability to communicate globally will be authorized under a new Commerce license exception.
  • Financial Services: U.S. financial institutions will be able to process credit and debit card transactions in Cuba.
  • Small Business Provisions: Small businesses are now authorized to obtain micro-financing projects and entrepreneurial and business training in Cuba.

The president’s announcement was met with mixed reviews in Congress. House Speaker John Boehner of Ohio stated, “Relations with the Castro regime should not be revisited, let alone normalized, until the Cuban people enjoy freedom – and not one second sooner,” according to Speaker Boehner’s press office.  In an interview with Reuters, Senate Majority Leader Mitch McConnell of Kentucky said he agrees with Florida Sen. Marco Rubio’s assessment that normalizing relations with Cuba is mistake.

On the other side of the debate, Rep. Jim McGovern of Massachusetts and Sen. Jeff Flake of Arizona stated their approval of the president’s policy. Flake added, “My sense is that most of my colleagues feel we are long past due” normalizing U.S.-Cuba relations, according to Real Clear Politics.

State Impact

According to the Census Bureau, Southeastern states export the most to Cuba, followed by states from the Midwest. Louisiana exports the most products to Cuba, followed by Mississippi, Florida, Virginia, and Georgia. The top U.S. products exported to Cuba are manufactured food and agricultural products. With the new export regulations, U.S. states can now export building materials, consumer goods, farm equipment, telecommunications equipment, and financial services.