The Curious Polities Of Disadvantaging Your Own

BARACK Obama will not get the credit he deserves for his sensible and sometimes visionary Presidency of the United States of America. At least not in the life of his tenure. But he has done remarkable things. Two of them are ending the diplomatic impasse with Cuba and ending the economic isolation of Iran.

The business community and the economy of the US should already have been benefitting enormously from these two progressive actions. Instead European and Japanese companies are lining-up to seize investment and market opportunities in Iran, and exporters in Latin America, the European Union, Russia and East Asia have descended on Cuba. Canadian companies are also consolidating the foothold they have on Cuba as a result of never joining the US in its diplomatic and trade embargo. China is also tying-up deals with both countries.

Largely, it is representatives of the Republican Party in the US Congress who are responsible for shackling US businessmen and holding them back from the opportunities the Iranian and Cuban markets present. With respect to Cuba, the embargo allows US sales of agricultural goods and medicine but the market of more than 11 million people is still largely off limits to most US companies, banned from doing business with the Caribbean island.

Not surprisingly, Democratic presidential candidate Hillary Clinton has urged the US Congress to end the long-standing trade embargo against Cuba, calling it a “failed policy” that had done little or nothing to foster change on the communist-ruled island. Her call would be echoed in the boardrooms of many US companies which have to sit-by while billions of dollars in transactions are earned by rival companies from elsewhere in the world.

The Cuba issue is linked to the continuing politics of Presidential and Congressional elections in the US. Two Republican Party presidential hopefuls, former Florida Governor Jeb Bush and Senator Marco Rubio of Florida, continue to beat the drum of Cuban’s human rights record in the hope of winning the votes of the Cuban-Americans who are important to electoral delivery of the state. The price they may pay is no support from many big businesses which might otherwise have supported them. For sure, Mrs Clinton and her seasoned campaign team would have taken account of the risks and rewards of backing a policy that would continue to deprive US companies of profit-making trade and investment with Cuba.

It is not as if the matter of Cuba’s human rights practices is off-the-table of discussion between the Raul Castro and Obama governments. The issue is still very much a part of the negotiations taking place between the two governments for the full normalisation of relations and it will remain a sticking point until sufficient progress is made for both sides to announce success.

The question is: what approach is more likely to produce the success each side wants – engaging Cuba to encourage improvement in human rights or continuing the trade embargo to push the Castro government to capitulation? The latter approach has been tried for over 50 years and, as Mrs Clinton says, it has failed. If anything, it has helped the Cuban government both at home and abroad to portray itself as a victim. Engagement – and the benefits that could flow to Cuba as a result of it, including easing the strain on the government to satisfy the rising aspirations of the Cuban people – could deliver improvements in upholding human rights.

It is over Iran, more than Cuba now, that the curious politics of disadvantaging its own is being played out in the US. Since the 6-nation accord, led by the Obama administration, to end sanctions against Iran in return for what amounts to a 15-year moratorium on the development of a nuclear capability, Chinese, Russian, Japanese and European Union companies have been tripping over each other to get into the market to sell goods and services and to invest in oil production. The five other countries that signed the accord are: the United Kingdom, France, China, Russia and Germany. The ink was hardly dry on the agreement before German companies were hot-footing it into Tehran. The British government was no slouch in re-establishing an Embassy, outfitted with a commercial section. At stake is trillions of dollars in business, from which right now US businesses are excluded because of the hostility to the accord by mostly Republican members of their own Congress which has until September 17 to vote on the agreement.

As with Cuba, opposition in the US Congress to the Iran deal has more than a little motivation in electoral politics. New York, New Jersey and Connecticut are home to sizeable numbers of Jewish voters and election campaign donors who side with Israel’s Prime Minister Benjamin Netanyahu in believing that the lifting of sanctions against Iran will give its government a chance to build up its military capability to Israel’s detriment. Intriguingly, Brent Scowcroft who was national security adviser to two Republican Presidents – Gerald Ford and George H.W. Bush – believes that the agreement with Iran is good. Writing in the Washington Post, he said it “meets the key objective, shared by recent administrations of both parties, that Iran limit itself to a strictly civilian nuclear programme with unprecedented verification and monitoring by the International Atomic Energy Agency and the U.N. Security Council”.

Whether voices, such as Scowcroft’s, help to sway the US Congress is left to be seen. In a previous commentary, “The IMF’s new vision of debt and Obama’s boldness with Iran”, I offered reasons why the accord is good for developing countries, including the Caribbean.

While the curious politics of disadvantaging its own is not unique to the US, as Scowcroft says this is an “epochal moment that should not be squandered”. It is so for the US role in the Middle-East, and so for US businesses.

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