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U.S. Embassy in Cuba Opens, Doors Still Closed for Business

U.S. Embassy in Cuba Opens, Doors Still Closed for Business

Today, the United States reopens its embassy in Havana, Cuba and formally re-establishes diplomatic relations.  The embassy will primarily perform standard functions such as issuing visas and facilitating dialogue between the two countries.  The U.S. government has also eased travel restrictions, allowing Americans to travel to Cuba provided they meet one of 12 criteria, including family visits and education.   

This is a diplomatic development only; the embargo on trade between the U.S. and Cuba remains in place.  Only the U.S. Congress can lift the embargo and it is unlikely to do so anytime soon.  Members of Congress have threatened to restrict funding for the embassy and block the appointment of an ambassador.

The opposition in Congress is bipartisan.  Among the more vocal opponents is presidential hopeful Senator Marco Rubio, a Republican, who believes that lifting the embargo is a U.S. concession to a tyrant state.  Democratic Senator Robert Menendez also opposes lifting the embargo, fearing it will set a precedent of deprioritizing human rights and democracy. 

Despite the embargo, the transportation industry will see an increase in business due to the eased travel restrictions.  JetBlue is now offering five direct flight paths to Cuba.  Carnival Cruise Lines plans to start offering cruises to Cuba in 2016.  

Should the embargo be lifted, American firms — particularly those in hospitality and financial services — could reap major benefits.  Similar companies based in Canada and the United Kingdom, such as National Bank of Canada and Esencia Group Hotels, are already operating successfully in Cuba. 

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