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Panel II Of A Hearing Of The Commerce, Trade And Consumer Protection Subcommittee Of The House Energy And Commerce Committee - Examining The Status Of U.S. Trade With Cuba And Its Impact On Economic Growth

Statement

By:
Date:
Location: Washington, DC

Witnesses: Adrean Scheid Rothkopf, Vice President, Western Hemisphere Affairs, U.S. Chamber Of Commerce; Geoff Thale, Program Director, Washington Office On Latin America; Kirby Jones, President, U.S. Cuba Trade Association; Ambassador James Cason, President, Center For A Free Cuba, Former Principal Officer/Chief Of Mission, U.S. Interests Section, Havana

Chaired By: Rep. Bobby Rush

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REP. RUSH: The chair now calls the second panel to the dais.

It is my pleasure to introduce the outstanding witnesses on this second panel. And to my left, your right, we have with us Ms. Adrean Scheid -- is that correct, Scheid? -- Rothkopf. Ms. Rothkopf is the vice president of the Western Hemisphere Affairs Division of the U.S. Chamber of Commerce.

Next to Ms. Rothkopf we have with us Mr. Geoff Thale. Is that how --

MR. THALE: Thale. (Corrects pronunciation.)

REP. RUSH: Thale -- I'm sorry -- Mr. Geoff Thale, who is the program director for the Washington Office on Latin America.

And next to Mr. Thale is Mr. Kirby Jones. Mr. Jones is the president of the U.S.-Cuba Trade Association.

And next to Mr. Jones, to his right -- left, rather -- will be Ambassador James Cason. Ambassador Cason is the president of the Center for a Free Cuba and he's the former principal officer/chief of mission for the U.S. Interests Section in Havana.

I want to welcome all of you witnesses. And it is the practice of this subcommittee -- a new practice, I might add -- to swear in the witnesses. So I would ask that you stand and raise your right hand.

(The witnesses are sworn in.)

REP. RUSH: Let the record indicate that all witnesses have answered in the affirmative and have taken their seats.

We will allow you five minutes for the purposes of opening statements, and we'll begin with you, Ms. Rothkopf. Thank you. Please pull the mike close and make sure that it's on.

MS. ROTHKOPF: (Off mike.)

REP. RUSH: Is your mike on?

MS. ROTHKOPF: Thank you.

We applaud the recent moves by both Congress and the Obama administration to ease the embargo on Cuba. The Chamber sees recent bipartisan legislation and statements by the administration as important first steps toward a policy more likely to promote a transition to democracy and full civil liberties in Cuba and bring significant economic opportunities to American farmers, businesses and workers.

But ultimately what we would like to see is an end to the embargo, which we view as one of the biggest foreign policy failures of the past half-century. Rather than encouraging Cuba to democratize, the embargo has helped prop up the communist regime. Instead of isolating Cuba from the rest of the world, it has isolated the United States from our allies.

Our two countries are natural trading partners. And prior to the embargo, the United States accounted for nearly 70 percent of Cuba's international trade. Cuba was the seventh-largest market for U.S. exporters, particularly for American farm producers. But the embargo forced Cuba to seek out new sources for its domestic consumption.

Under the Trade Sanctions Reform and Export Enhancement Act of 2000, the sale of commercial agricultural exports was permitted, but with a variety of restrictions and licensing requirements, including cash and advance payments via third-country banks.

Despite heavy regulation, by 2004 U.S. agricultural exports to Cuba rose from less than 1 million to 392 million, 42 percent of the Cuban market. In 2008, U.S. exports to Cuba reached 718 million. Yet the majority of agricultural trade with Cuba is done by large multinational companies, as small and medium-size exporters are deterred by the complexity of regulations.

Other negative impacts on food and agricultural exports include restrictions on the ability to travel for the purpose of establishing commercial relationships and restrictions on visits from Cuban officials to confer with U.S. suppliers, inspect facilities and discuss sanitary and phytosanitary issues.

In 2001, the International Trade Commission estimated that the embargo cost U.S. exporters up to $1.2 billion annually in lost sales. While the U.S. Chamber recommends that an updated study be conducted to fully evaluate the missed opportunities, it is clear that these include agriculture. ICC estimates that if all restrictions on trade and travel are lifted, sales in poultry, beef and pork could rise by $25.7 to $37.8 million.

Additionally, Cuba has the potential to become the top foreign market for U.S. rice. A Congressional Research Service study estimates that removing restrictions on trade would increase rice exports by $14 (million) to $43 million.

Tourism. Lifting the travel ban will create jobs in the U.S. and Cuban tourism industries and will have an impact on direct investment in tourism infrastructure, such as hotels, shops, cruise ship ports, airports. ITC estimates that lifting the travel ban would increase U.S. visitors to Cuba from 171,000 in 2005 to between 554,000 and 1.1 million.

Additional tourist arrivals would increase U.S. sales of agricultural goods to the island because of the increased tourist demand for food and because of higher Cuban economic growth, boosting domestic demand for high-quality U.S. food products.

Machinery. As Cuba rebuilds after widespread hurricane and tropical storm damage in 2008, the island is an important potential market for construction equipment and agricultural machinery. Additionally, Cuba has a dilapidated infrastructure system. An eventual opening or reform of the Cuban economy will create opportunities for U.S.-made equipment to build the island's infrastructure.

Oil. There is a natural niche for U.S. oil companies to participate in the exploration of Cuban offshore oil fields. Sub- surface similarities with existing oil fields in the U.S. Gulf of Mexico would allow U.S. companies that have experience in the Gulf to mitigate complicated technical challenges in local deepwater development, leading to cost, environmental and safety efficiencies.

Additionally, Cuba's proximity to the U.S. allows for a transportation cost premium for the U.S. market that would serve to moderate energy prices to the United States. At the same time, with Cuba's maritime boundary just 45 miles away from the U.S. coastline, we ought to be concerned about who and how Cuba's oil fields are being developed from an environmental standpoint, as an oil spill could mean significant environmental damage for the United States.

We believe that opening trade with Cuba will bring political and economic change to the island. But establishing a commercial relationship will certainly raise legitimate business concern on the part of U.S. companies. The Cuban government will have to provide certain guarantees and safeguards in the areas of rule of law, environmental protection, infrastructure for travel requirements, safety environment, intellectual property protection, and incentives for innovation and labor rights.

Additionally, there are important considerations regarding financing. However, these concerns should not impede a lifting of trade restrictions in Cuba. U.S. businesses can quickly and easily benefit from open trade.

Thank you very much.

REP. RUSH: Thank you very much.

Now, the chair recognizes Mr. Thale for five minutes.

MR. THALE: Thank you, Mr. Chairman.

I'm Geoff Thale, the program director of the Washington Office on Latin America. WOLA is a human rights organization, and we look at Latin America policy and the Cuba policy from the perspective of human rights. I've submitted written testimony, but here I'd just like to briefly summarize it.

What I'd like to do is talk a little bit about whether, from our point of view, trade can contribute to improvement in the human rights situation in Cuba, and if so, how? And I'd like to end by reiterating what I think you'll hear from some of my other colleagues here about the trade opportunities and investment opportunities we're losing.

As an organization, as an institution, we don't believe that trade by itself, in Cuba or anywhere else, automatically brings gains and increases in democracy and human rights. But, when trade is part of a broader strategy that includes diplomatic and political engagement on human rights issues, and when there are internal and domestic pressures for the respect of human rights, then there are possibilities to see improvements in the human rights situation. In the case of Cuba, we believe strongly that increased trade, increased travel and engagement can only benefit the human rights situation in Cuba and bring benefits to the United States as well.

Let me just say a word about the human rights situation itself. It's easy -- it's very tempting to view the human rights situation in Cuba from, sort of, stereotypical points of view. It's extremely important not to white-wash the very serious and very real problems. It's important not to exaggerate them as well.

I think it's really clear, if you look at the State Department's Human Rights Report, there are real restrictions on freedom of association, on freedom of speech. It's very clear that Cuba holds between 100 and 200 political prisoners, depending on how you count it. These are all clearly unacceptable violations of internationally- recognized norms. The U.S. government should call on the Cubans to end that; the human rights community should, the international community should, generally.

At the same time, we look at human rights in the rest of Latin America. And, if you look further at those same State Department reports, you won't see reports of political killings in Cuba, or political disappearances; or (extra- ?) judicial executions, which we see also in the region; and you won't see systematic accusations of torture, which is obviously an issue we've looked at in the Guantanamo context here. So, I think, from our point of view, it's important to see the "mixed bag" you see in Cuba -- (inaudible) -- (in the right situation ?)

If you ask about the United States' ability to influence the human rights situation in Cuba itself, I think, from our point of view, our ability is nonexistent. We've had 50 years of an embargo -- almost 50 years of embargo; little trade, with some narrow exceptions; limited contact; limited diplomacy -- and the result is we have very little influence and very little leverage. Cuba is free to ignore our views on human rights because we don't make much significant difference to the government, or its economy, or its politics or its diplomacy.

And so, our view is that engagement would change that. By engaging through trade, by engaging through travel, by engaging through diplomacy, we'll develop relationships in Cuba over time, and we'll develop tools over time that can be used to dialogue with, and to encourage greater respect from the Cuban government over human rights and democratic practices.

And, I don't think that's a magical formula. We're not going to see change overnight. We're not going to see dramatic steps from today to tomorrow. But, it's clearly a better strategy to pursue engagement, including trade, travel and diplomacy, than it is to continue the current embargo.

And I think it's important to underscore, that's a point of view that most of the world believes. Latin America, Europe, Asia, Africa, most of -- (inaudible) -- countries all engage with Cuba. Some key allies and partners of ours -- especially Brazil and the Spanish government, systematically engage with the Cuban government on trade issues, and link that to dialogue on human rights, democracy issues, political prisoners.

And, again, I don't think they expect dramatic change overnight. They see themselves as laying the groundwork, as preparing for the future, and as developing relationships there. And the truth is, the United States is standing on the sidelines. And we're standing on the sidelines at a time when we have economic reasons to engage with Cuba.

You know, as Ms Rothkopf noted -- mentioned, as I assume Mr. Jones will mention as well, there are agricultural interests and agricultural possibilities in Cuba; there are interests from our ports on the Gulf Coast; there are tourism and travel interests; there are medical interests and medical opportunities; there are potential energy interests. There's a whole set of economic opportunities that we're foregoing for the sake of a policy that's not bringing us any real benefits, in terms of human rights and democracy.

So, I think our view is that we ought to move toward a policy of engagement, but that policy ought to include moving toward ending our embargo on trade and taking advantage of the opportunity that brings us there.

We're pleased to see that President Obama has taken the first initial steps in the process.

We're pleased, Mr. Chairman, to see that you traveled to Cuba recently and engaged in the beginnings of dialogue and diplomacy here. We hope we'll move forward in that way because we think it's good for human rights in Cuba, as well as good for the United States. Thank you.

REP. RUSH: The chair now recognizes Mr. Jones for five minutes.

MR. JONES: Mr. Chairman and members of the committee, thank you. I appreciate the opportunity to be as well.

The last 47 years, the cornerstone of U.S. policy toward Cuba has been the embargo. But, if one looks at the original and subsequent reasons for this policy, it is hard, if not impossible, to point to a single success that this policy has had in achieving any of its objectives. The embargo has achieved, in fact, the exact opposite (of) what was originally intended, and is not serving the interests of the United States government, nor the United Nations citizens.

No other country in the world has an embargo on Cuba. I've been traveling back and forth to Cuba for 35 years, and I have seen a lot of changes in those years. It may be that the U.S. policy has been stuck for 47 years, but Cuba has not. A new trade and investment economy has emerged in Cuba in the last 15 years -- a mix of capitalism and socialism.

And not just a little dose of capitalism. Every sector in Cuba now has a foreign private investor. This includes mining, energy, hotels, beer, bottled water, port management, cosmetics, biotechnology, real estate, agribusiness, and telecommunications, just to name a few. Cuba has removed subsidies from almost all its former state enterprises and merged or eliminated ministries.

To undertake its foreign business, Cuba has created dozens of free-standing holding companies. Where once totally dependent on sugar, Cuba has greatly diversified its source of revenues now to include nickel exports, personal services, tourism, foreign remittances, citrus and sea food exports, world-wide sales of rum and cigars, and exports of biotechnology products. Whatever adjectives serve those who continue to want us to believe that Cuba in on the brink of economic collapse, the reality is otherwise.

Having said that, like all developing countries Cuba does have many problems -- major foreign debt obligations, foreign currency exchange regulations are shifting, domestic pricing policies for imported consumer food products have inhibited market growth, labor regulations need improvement, transparency regarding foreign investment is a longstanding concern and limits are placed on entrepreneurial expansion.

But, Cuba is also the largest country in the Caribbean, with a size comparable to Pennsylvania. And, according to both CIA and the Economist Intelligence Unit, Cuba has had growth rates of 10.2 percent annually from 2005 to 2007. This has fallen to 4.4 percent in 2008 due to the world-wide recession and devastating hurricanes. Largely unknown is that Cuba has the third largest deposits of nickel in the world; and is the ninth-largest tourist destination in the Americas without any Americans.

I first met Fidel Castro in 1974. I have known him now for 35 years. All of these changes in the way Cuba now does business were initiated under Fidel Castro, but are now not dependent on him or Raul Castro, for they have already implemented much of the very transition that some still say would come only after Castro no longer heads Cuba. To wait to lift the embargo, for some so-called "post-Castro era," as if all will change and somehow differ, is not at all a productive business plan, nor, quite frankly, is it a productive political strategy either.

After 40 years of no trade, and just over -- a bit over seven years, the U.S. now supplies, as has been mentioned several times, more food to Cuba than any other country. In 2008, U.S. companies received $718 million from the sale of agricultural products to Cuba. In aggregates, since this trade began, contracts of more than 11 million metric tons, worth of $3.6 billion, including shipping and services, have been signed, comprising 300 different products, including wheat, rice, corn, soy beans, tomato sauce, eggs, chicken, cookies, apples, wine, ground turkey, chewing gum, utility poles, live cattle, organic fertilizer and rice.

These have been bought from 157 different companies, from 37 states. Twenty-three different ports have been used for more than 1,100 ship journeys, of which 73.5 percent have been made with U.S.- owned or chartered vessels. U.S. companies are forced to operate under a serious disadvantage, in comparison to companies from other countries. The rulings in early 2005, by the previous administration, have caused Cuba to cut back on some imports to the United States.

Most important, in preventing U.S. companies from the full realization of their current trade, has been, and is, the inability to offer private credits. There are some who argue that this restriction should be maintained because they feel Cuba is a bad credit risk. But, whether or not to extend private credit to Cuba should be a decision taken by each company, not by the U.S. government.

If these restrictions -- unique in international commerce, were lifted, Pedro Alvarez, chairman and C.E.O. of Alimport -- which imports all U.S. agricultural products to Cuba, stated that U.S. firms could provide over 50 percent of Cuba's food needs, which annually reach almost $2 billion -- which will be an increase of several hundred million dollars a year, over current levels.

There have been studies that indicate that U.S. firms have lost over $100 billion since the early '60s because of the embargo, and that the annual cost now could be as high as $4 billion a year.

In my opinion, the key to starting a process of business with Cuba which will benefit American workers in the U.S. economy will be for Congress to pass and for the president to sign H.R. 874 and S. 428, which will allow all Americans to travel to Cuba.

Two million Americans are projected to visit Cuba in the first two years of open travel. Studies have shown that this in turn would result in an injection of $1.6 billion into the U.S. travel and support service industry, and most of that helping the small to medium-sized travel agents, airlines and additional food exports to feed the U.S. visitors and advertising promotional programs.

Virtually anything that Cuba now purchases might very well be purchased from the United States. And this list of potential products -- and I'm including fertilizers and pesticides; pharmaceutical products; textiles and apparel; steel; farm machinery and construction equipment; power generation machinery; electronics, plastics, tires and sporting goods; services such as air transportation; maritime transportation; construction service, telecommunications and travel and tourism; and of course a growth in the importation of U.S. agricultural --

REP. RUSH: Mr. Jones, would you please summarize your statement, please?

MR. JONES: U.S. firms will be able to offer what companies from Europe, Canada and Latin America can never provide. And finally, in addition to sales, there would be several opportunities for investment -- agribusiness, hotels, marinas, golf resorts, housing and building renovation, telecommunications and overall infrastructure; these are just some of the opportunities that will be open. I'll be glad to take any questions.

Thank you, Mr. Chairman.

REP. RUSH: Thank you very much. The chair will now recognize Ambassador Cason. Ambassador Cason, you're recognized for five minutes, more or less.

MR. CASON: Okay. Mr. Chairman, members of the committee, thank you very much for the opportunity to appear before you today to discuss this topic of great importance. Until very recently, I was a career foreign service officer with 38 years experience, mostly in Latin America. One of my postings was to Cuba, where I was chief of mission from late 2002 to late 2005.

Speaking here today as president of the Center for a Free Cuba, a non-partisan NGO and a 501(c)(3) organization -- therefore, nothing I say here today supports or opposes any bill before Congress, and we administer a USAID grant.

We at the Center for a Free Cuba provide humanitarian assistance to the people of Cuba and assist civil society and democratic activists there. We send uncensored information and shortwave radios among other things to Cuba. The Center favors licensing measures announced by the president that will allow U.S. firms to attempt to enter the Cuban telecommunications market. Havana limits its citizens' access to the Internet, cell phones and other information or media out of its control. If Cuba expands the speed and availability of the Internet, lowers the exorbitant cost of Internet cafes, Cubans will communicate faster and more easily among each other and with the wider world. Greater access to and use of the Internet by average Cubans, especially the young, will promote civil society and a democratic process there.

We support Cuban-American travel to the island on humanitarian grounds, and travel by researchers, academics and others who make a serious effort to discover for themselves Cuba's reality. We are opposed to tourist travel by American citizens with no relatives on the island because such travel will only provide funds to the Cuban security apparatus which owns the tourist infrastructure. Such "bathing suit" tourism will do nothing for Cubans nor will it in any way help promote democracy. Mr. Chairman, I would like now to ask that a recent paper I wrote entitled "The Case against Travel to Cuba," be entered into the record.

REP. RUSH: Hearing no objection, so ordered.

MR. CASON: Thank you very much.

Just as we oppose unprincipled tourist travel to Cuba, we do not feel that a unilaterial ending of what remains of the embargo now will promote greater economic or political freedom in Cuba or great benefits to American companies. Lech Walesa and Havel told the Center recently that nowhere in the world have authoritarian regimes changed their ways because of trade or tourism. It has been international solidarity, constant pressure, and tangible and moral support for democratic freedom fighters that have made the difference.

When the Castros are gone, the embargo will serve as leverage in helping in the military owners of hotels realize it is in their interest to support a democratic opening, for if they do, we can provide millions of tourist dollars and trade opportunities. As the Washington Post has recently editorialized, giving away what little leverage we have for nothing now will gain us nothing and will harm those fighting for change on the island. Please note that all the rest of the world trades and allows travel to Cuba, but that has not made any difference in the totalitarian nature of the regime.

As long as Cuba refuses to allow independent labor unions the right to exist, we oppose U.S. businesses entering into joint venture arrangements with the Cuban government. Havana exploits workers and takes 95 percent of what joint venture partners pay the government for labor. Strikes are not permitted, and many independent labor organizers have been given long prison sentences. To invest in Cuba today is to participate in the exploitation of defenseless Cuban workers. And I would not be surprised if, after freedom comes to Cuba, there's a backlash against Canadian, Spanish and other investors who have taken advantage of docile Cuban labor to make a fast buck.

American farmers are privileged in their dealings with Cuba. They get cash and take no credit risk. As we've heard, we are the largest food provider to Cuba. Why would any agribusiness exporter want to give credit to Cuba? Why would American citizens support such a measure when Cuba is an international deadbeat? It has defaulted many times and owes foreign creditors over $25 billion, not to mention another $22 billion of unpaid Cold War-era debt. Its economy is moribound, and it is in arrears everywhere. Per capita, Cuba owes $4,000 each. Its debt equals 86 percent of GDP. It is the 10th most indebted country in the world. And its Moody -- Moody's credit rating is CAA 1 -- speculative grade, very poor. Dunn & Bradstreet rate Cuba as one of the riskiest economies in the world.

I would note that Cubans' average monthly wage is around $20. The average Cuban lacks money for most necessities. U.S. food goes largely to the tourist industry or is marked up 256 percent and sold to those who recieve remittances in dollar stores. There is no consumer demand for our products and no prospects in sight for this to change until the regime begins to pursue free market economic policies. There are no Cuban entrepreneurs, no free market policies, no economic opportunity and no purchasing power. There's just the regime which resists change in a panicky attempt to maintain total power for the nomenclature.

Reuters reported last week that there is a severe cash crunch in Cuba, and foreign businessmen fear Cuba could be near insolvency. The liquidity crisis has become critical. Small foreign businesses are reportedly desparate and are not being paid. State companies have been ordered to stop all imports. Prices and demand for all Cuban exports are down, and nothing suggests Cuba's economy will get any better soon.

Now recent polls conducted in Cuba reveal that only 6 percent there of the citizens see the embargo as a problem. What they most want is for the government to give them a better life, a decent job, hope for the future. They said they want change, democracy and economic freedom. They want elections. They want to join the world. They want to be able to travel and run their own businesses in Cuba. Whether the U.S. trades more with Cuba is irrelevant to their lives.

The Center for a Free Cuba opposes any loosening of restrictions on commerce with Cuba now for the following five reasons. Trade and tourism will not hasten a democratic transition there; Cuba is a terrible credit risk and cannot pay most of its bills; it exploits its workers shamelessly; it's in an insignificant market for U.S. consumer and other goods; and only the government, not the people, benefits from trade with us. There are no Cuban exporters or entrepreneurs.

Mr. Chairman, only if and when a new Cuban leadership demonstrates through deeds, not words, as the president has said, that it is moving towards democracy and market freedoms, then we will be among the first to say, let's deal.

Thank you very much for allowing me to testify here today.

REP. RUSH: The chair thanks the gentleman. The chair recognizes himself for five minutes for questioning.

The U.S. has a long history of trading with numerous nations with poor records on human rights and shoddy business and credit relationships. The list is very, very long. We import considerable amounts of oil from Nigeria and Venezeula, despite their shoddy records on human rights and political freedoms. Pakistan itself is the recipent of billions of dollars that America needs, despite Islamabad's lonmg history of repressing political freedom.

Indeed, at one point, the United States traded with Iraq, even during the height of Saddam Hussein's brutality against Kurdish and Shi'ite civilians. Yet despite our long and continued history of doing business with nations with questionable or even poor records on human rights -- and I might add, China is a glaring example of this -- this nation -- (inaudible) -- has been singled out for a trade embargo because of its human rights writes issues and problems.

Is there a double standard, and why is there a double standard? Ms. Rothkopf, would you please respond to my question?

MS. ROTHKOPF: Yes. Thank you very much.

Yes, you're absolutely right. The U.S. does have a history of engaging with many countries around the world in which human rights problems exist or political prisoners are unjustly deprived of their freedoms. And we have chosen another path -- engagement. From China to Saudia Arabia, from North Korea to Afghanistan, we choose to engage, to help advocate for those who have been abused by their system.

Engaging brings more of these stories to light. Engagement brings countries more fully into the international community where established systems and multilaterial mechanisms can work on behalf of the victims.

I think we have to acknowledge that the embargo has failed to help the political prisoners in Cuba, and it's actually hurt the average Cuban by damaging the economy. But it hasn't damaged it enough to change things in the mind of the government. It's just damaged it to hurt the innocents in the country. So I do say, yes, we have had a double standard.

REP. RUSH: Mr. Thale, can we subject some of these other countries to similar embargoes? Should we stop importing oil from Venezuela or Nigeria or even Saudi Arabia? Should we issue a trade embargo with China? And what would the effect of that be to the economy of our nation?

MR. THALE: Thank you, Mr. Chairman. I think that's actually a really good question. I think it's a good question because it underscores a sense which we ought to strive a have a single standard in how we approach trade and human rights and diplomacy issues around the world.

I think our view is that there are limited selective occasions where sanctions do make sense. I think, by and large, sanctions have been effective forms of coercion against governments with whom we have disagreements. I think Cuba is one of the clearest examples of that, and I think the message is, we ought to engage with countries, and as part of that engagement, have human rights on the explicit agenda.

We ought to do that with Cuba, we ought to do it with China and we ought to do it around the world.

REP. RUSH: Mr. -- (inaudible) -- on the possibility of the president's recent pronouncement as it relates to the telecommunications industry, how do you foresee from two vantage points, one from the vantage point of American corporations; and two, from the vantage point of the Cuban people?

MR. JONES: First, just a minor point. American cell phones won't work in Cuba; you know, we can send all the cell phones we want, but it's not going to do any good. It ignores the fact that Cuba has a 12-year now joint venture with Italy, which is in the process of redoing the whole telecommunications system in Cuba. They've launched a cell phone system. It doesn't cover the entire country. It covers the major population centers. There's been installations of public phones and an upgrade of telephone communications hardware.

So U.S. companies are going into a market where there already is a foreign investor, sometimes, we tend to think if we're not there, nobody's there, but that's not the case in Cuba.

Having said that, I have talked to Cuban officials who recognize that were 1 million Americans to come to Cuba for free travel, they're going to have make changes so that they can service Americans and their cell phones, which will mean a joint venture between some American company and Itexa, the Italian company there, to widen the cell phone coverage, to engage in a business agreement and finance this going back and forth for the expansion of that coverage and to install a system where U.S. cell phones will work. But again, American companies will be going into a situation that has been working for 12 years.

REP. RUSH: My time is up. I want to recognize the ranking member for five minutes.

REP. RADANOVICH: Thank you, Mr. Chairman.

Mr. Cason, welcome to you and everybody else here to the committee. I do have a question regarding your testimony. You mentioned in your testimony a Reuters report that Cuba may be in a fiscal crisis and near insolvency and -- on top of the fact that it already has 25 billion (dollars) in unpaid debt and owes an additional $22 billion in Cold War-era unpaid debt. Why are other countries still doing business like this Italian company with Cuba if they're not being repaid, if that's indeed the case?

MR. CASON: Well, what Cuba has been doing -- when I was there, we saw it all the time -- they will take products from foreign countries, they will wait as long as they can to pay them and pay them a little bit or try to restructure the debt. They did that with Mexico for example. It's a constant sort of kiting in the sense that they have so much debt and so little productivity and so little of what they export that's not already being sold, they don't have the money they need to provide for all these great markets that people have been talking about.

The fact is they're tremendously indebted. There is no consumer demand because the average Cuban has no money and can barely survive. It all depends on the whims of the government. And if Fidel buys for political grounds, particularly from the United States, it's he's trying to influence votes in Congress. I mean, where he buys does -- depends on what -- you know, a lot of calculations he made where he's going to get the main bang for the buck.

REP. RADANOVICH: Thank you, Mr. Cason. If American business, including agribusiness were not required to accept cash-only terms of business and instead started giving credit to Cuba, what do you see happening under that scenario?

MR. CASON: Well, I think any company that would want to not take cash before they even shipped the goods when all these other companies are having great difficulty getting money would be nuts; I mean, they have the best deal going. I think that what would happen is we'd start running up huge debts with Cuba and they may or may not pay us, depending on -- like they do with the rest of the world.

REP. RADANOVICH: Can you tell me whether there would be more than credit risks involved if cash was not required for purchases of American goods?

MR. CASON: Well, the real risk is this not a market that's making the decision; this is Fidel and Raul decide who gets paid, who gets booted out. When I was there, there was a move after many years to dissuade Spanish small and medium businesses from remaining. That's why in those figures we heard earlier, there are a large number of companies that have left and it's because they decided that it's time for them to go; they changed their mind.

REP. RADANOVICH: Thank you, Mr. Cason. You mentioned also in your testimony a point which I would like you to elaborate on if you would please, and that is to invest in Cuba today is to participate in the exploitation of defenseless Cuban workers and that there would be a backlash against Canadian, Spanish and other investors who have taken advantage of the docile Cuban labor to make a fast buck. Could you expand on that, please?

MR. CASON: I've talked to a lot of people in Cuba when I was there and since then who tell me that when the day comes and when there's freedom in Cuba, the fact that the United States, on principle, did not exploit Cuban labor the way I mentioned it, will be seen as a favorable development for American companies, but that the Spanish and others who have taken advantage that you can't strike, that you can't have labor organizations, are going to not have the sympathy of the general public afterward. And, you know, how it plays out, we'll have to see.

And I would remind you also that Lech Walesa has a written a letter to the president recently saying please don't forget the situation of labor rights in Cuba when you talk about changing your policy towards Cuba. And I think that's very important.

REP. RADANOVICH: All right. Thank you, Mr. Cason.

Ms. Rothkopf, I couldn't help but notice in your testimony on the Chamber's desire to do business in Cuba that you would want to be able to do business -- a couple of minor things to get out of the way. That would be that -- there was a long list here. The Cuban government will have to provide certain guarantees and safeguards to U.S. business in the areas of rule of law, the environmental protection, infrastructure for travel requirements, intellectual property protection and incentives for innovation and labor rights, also, important considerations regarding financing. That's quite a long list.

I mean -- care to comment on that? I mean, you know, that's a pretty high barrier to overcome.

MS. ROTHKOPF: Sure. I think the reason that that was included in my testimony was to make the point that we think that opening trade with Cuba is going to bring political and economic changes to the island. But just because we were to open and make that option available that doesn't mean that everybody is going to rush in and automatically do business. And I think that the important thing is to say that we don't place that limit on other countries, on businesses. Businesses will make a smart decision based on business -- based on business decisions and whether it makes sense for their company.

A company that doesn't have the safety requirements that they need, they're going to start operating. If they're not getting the intellectual property protections that they need, then they're not going to continue to do business with that country. If infrastructure isn't there for the travel requirements, they're not going to go in.

So basically what we're saying is U.S. businesses are successful because they take a smart look at the business opportunities. And my point is that they are going to continue to take a smart look at the opportunities and they're going to make a smart decision based on what the Cuban government decides to do or not to do.

REP. RADANOVICH: Thank you very much. Thank you, Mr. Chairman.

REP. RUSH: The chair thanks the gentleman. The chair now recognizes the gentle lady from Florida, Ms. Castor for five minutes.

REP. CASTOR: Thank you, Mr. Chairman. Thank you all very much for being here today.

Following President Obama's announcement that -- lifting the restrictions on Cuban-American families and their ability to travel to Cuba, it's been met at home with great enthusiasm. And I wanted to give you one example of a newspaper headline that followed within the week from The Tampa Tribune, but it had a similar message in many other papers: "First for Cuba: Trade and Travel."

And I think folks are very -- they're very hopeful for the economic opportunities that modernization of the relationship will bring eventually. Great potential in the port in Florida, ag products -- all products, the cruise industry, et cetera.

But I think because of the family ties and historic ties that we have, folks do not want economic opportunity to come at the expense of progress and change on the island -- especially human rights.

So now where are we? President Obama appeared at the Summit of the Americas and made another overture, met rather surprisingly with a response from the Cuban president that said everything's on the table -- followed up by Brother Fidel Castro who said, well, wait a minute.

If you all are advising the Obama administration and the Congress now on how to proceed, what is the plan? It's unlikely that it's going to become just a lifting of the embargo. That may not practically happen. So what is the plan? What are we going to be seeking on human rights improvement and where can we make progress -- if you could each take about 45 seconds.

MR. CASON: Well, I think the embargo's always been a tool with both President Bush and I think (reiterated?) by President Obama has said that if we see evidence that the Cuban government is serious about engaging -- it takes two to tango -- gives us a sign and begins moving in the direction of where we want to see Cuba -- which is greater freedom and common prosperity for the Cuban people -- then everything's open for discussion.

But Hillary Clinton said a couple of days ago in a hearing that she's seen no response yet from Cuba. Fidel keeps undercutting his little brother by saying "He didn't mean that." He's still in control. I think he's made it clear from day one of this administration that he -- he said, "When this war is over, I'll start a longer and bigger war of my own. A war I'm going to fight against them. I realize that will be my true destiny." He, Fidel, will continue to do everything he can to sabotage, I think, a closer engagement between the two countries.

MS. ROTHKOPF: Okay, thank you.

I completely agree with you. We don't want the economic opportunities to come at the expense of possibility of democracy. We actually agree that broadening economic engagement on the island through additional commercial and people-to-people contact will promote the transition to democracy and to full civil liberties.

We very much hope to see an end to the embargo. Absent a full end to the embargo, there are some steps that can be taken. For example, removing the restrictions on financing, allowing the ability to travel for the purpose of establishing commercial relationships, allowing visits from Cuban officials to confer with U.S. suppliers, inspect facilities and discuss sanitary and phytosanitary issues. All of these would all have a positive effect.

MR. THALE: (Off mike.) I don't expect that the process of political opening in Cuba is going to be a tit-for-tat series of movements by the United States and the Cuban government back and forth. My view is we will see political change there and political openness and relaxation as the U.S. moves forward in its relationship.

I think we ought to move forward pursuing our own interests, which have to do with maintaining human rights as a concern of ours and being very clear in public about that; pursuing some common interests around migration, drug cooperation and environmental concerns; and moving forward in pursuit of our economic agendas. And I think in that process we'll see change beginning in Cuba, but I don't think we'll see it as a back-and-forth tit-for-tat kind of process.

MR. JONES: Can I just add a couple of comments?

If there are preconditions -- if we're going to say to Cuba: We're not going to do this until you do that, that means two things. That means, one, we have put into Cuba's hands how we conduct our foreign policy, because we're letting them set the conditions. Secondly, it's a nonstarter. Cuban will not respond to any preconditions and it's said so repeatedly.

President Obama did something that no other president since John Kennedy's done, which is to say publicly that the policy over 50 years has been a failure. In response to that, Raul Castro said everything's on the table -- something that no Cuban president has said for 50 years. Raul Castro is president of Cuba. He has an older brother who has no official office in managing the government. I think it would be a mistake to take an editorial or a column in Granma and interpret that as being the final word on Cuban government policy.

I think we ought to take them up on their word. I think there's a way to begin in terms of talking about resurrecting the bilateral talks the previous administration stopped on immigration, drug interdiction and the environment -- all to our interest. And we ought to begin the process of talking in the same way that Ronald Reagan, calling the Soviet Union the evil empire, still kept on talking.

REP. RUSH: The chair will now recognize the gentleman from Georgia, Mr. Gingrey, for -- (inaudible) -- for five minutes.

REP. PHIL GINGREY (R-GA): Mr. Chairman, thank you.

And I want to thank all the witnesses on this second panel. I happen to disagree with Ms. Rothkopf, Mr. Thale and Mr. Jones and do fully completely agree with Ambassador Cason -- that's the way life is. You have your opinion and you feel very strongly about it and we have to go on.

I do want to commend Ambassador Cason for 38 years experience in the Foreign Service, mostly in Latin America, some time in Cuba as chief of mission from 2003 to 2006. I think that gives him a pretty darn good insight into what's going on. I think his comments about labor and the problem in regard to labor violations in Cuba -- I made the analogy in regard to why we didn't ratify the free trade agreement -- bilateral trade agreement with Colombia. And that Democratic majority, Mr. Chairman, keeps blocking that and it's mainly over the labor issues. So it seems a little disingenuous that we would be wanting to open up trade with Cuba when their labor record is abhorrent.

I want to specifically ask Ambassador Cason, though: What do you think the current creditworthiness of Cuba is? And what is on the horizon that will give us faith that Cuba can afford to pay its debts? If you could quickly in about 30 seconds answer that?

MR. CASON: Yeah. The credit rating is terrible -- it couldn't get lower -- and I don't think there's anything on the horizon that's going to bring the big bucks that will allow us to have our natural -- having Cuba the natural trading partner that some day it will be when Cuba's free and has the right economic policies that allow for growth and human ingenuity and entrepreneurs that are repressed there, but right now there's nothing. So I think that it's wishful thinking that the money will just appear and that we'll all get paid.

I'd like to say that I used to run trade promotion for the U.S. government in southern Europe. I worked for three years as head of the trade (department ?). So I'm all in favor of businesses making a buck. I'm also interested in getting paid and not giving up human rights in the process just to make a buck on a market that's extremely small, is shrinking. It's not going to grow other than by some miracle that I don't know where that's going to come from.

REP. GINGREY: Absolutely!

Well, let me just say this too. I think the other three witnesses are talking about, basically, what sounds to me is the end justifies the means and that sanctions haven't worked. And I would suggest to them that sanctions do work when they're applied across the board and maybe the people that are out of step are the other countries of the Western Hemisphere and Europe that were not willing -- did not have the intestinal fortitude to apply the sanctions.

Mr. Jones, you referenced John Fitzgerald Kennedy. You and I are probably about the same age. We were probably in our early 20s when Fidel Castro allowed Nikita Khrushchev to put those ballistic missiles on that island 90 miles from our shore and aiming right at us. So I think the courage was, of course, on the part of President Kennedy. He's probably spinning in his grave today listening to some of this testimony. I'm not specifically asking you a question, but if you want to respond, in just a second I'll let you.

Let me go onto Mr. Thale, though.

There's something in your testimony, Mr. Thale, that really, really bothered me. You said -- referenced the United States State Department Human Rights Report. In your written testimony it says: "Although that report criticizes Cuba's treatment of prisoners, the State Department Human Rights Report does not allege that the Cuban government engages in torture." And then in parenthesis you have: "an issue with which we are grappling here in the United States."

And in your verbal testimony -- and if you don't recall it we can, Mr. Chairman, have the transcriber read it back to us -- you referenced Guantanamo Bay.

Are you suggesting, Mr. Thale, that in the previous administration that President Bush or anybody a part of that was endorsing torture -- that we were torturing people? Is that what you were suggesting?

MR. THALE: Well, I was suggesting, Mr. Gingrey, that there's a debate going on in the United States about the documents that have just been released. There's the whole Abu Ghraib debate and this is an issue that's clearly under discussion in the United States.

I think the general thrust of my testimony was that if you look at the human rights situation in Cuba, you see a set of serious problems that have to do with, as I said, with freedom of association, freedom of the press, free expression, political prisoners. But that there's a set of -- in the universe of human rights issues that are under debate in this world today, there's some that Cuba --

REP. GINGREY: Well, reclaim my time.

I just want to say in conclusion, Mr. Chairman, I'm getting a little weary of people that represent this government going around the country talking about what we do and how we're guilty of human rights violations and apologizing for the previous administration.

REP. : Will the gentleman yield?

REP. GINGREY: I think it's entirely inappropriate.

I yield back.

REP. RUSH: Would the gentleman yield?

REP. GINGREY: Of course, I'll yield to the chairman.

REP. RUSH: Dr. Gingrey, you're -- you're a good friend of mine but I just want to bring your attention to a matter in my own state of Illinois where there is a fellow by the name of John Birch whose a former -- (inaudible) -- and he has been -- recently been indicted after about 30 years for torturing American citizens and forcing them to confess to crimes, and some have served for many years on death row.

Your friend, Republican governor George Ryan who also was convicted now is a friend of mine. But one of the things that I really admire him for is that he freed all prisoners on death row because a lot of them were there because of torture. So this does occur in -- in all countries and so -- and even in our own country. And right now there's occuring -- a real issue in my own state of Illinois in the city of Chicago. You're probably -- (inaudible) -- but I just, for the record wanted to reflect that. Thank you so much. I yield back.

The time of the gentleman is expired and now we will recognize the gentleman from -- who's just joined us -- Mr. Scalise, who's joined us from Louisiana. Mr. Scalise, you are recognized for five minutes for questions.

REP. STEVE SCALISE (R-LA): Thank you, Mr. Chairman. I would first ask, a comment that Mr. Jones made a few minutes ago about who's calling the shots, I guess, in Cuba. Do you really suggest that Fidel Castro is not in some way in control of the government of Cuba?

MR. JONES: I am suggesting that he remains as head of the Communist Party, but he is not president of Cuba. There's been a whole new wave of people brought in. Does that mean that Raul Castro does not consult his older brother? Absolutely. I'm sure he does. But I think it would be a mistake to take his writings and (grandma ?) as necessarily reflecting the absolute position of the Cuban government. And I -- I think just as President Obama did not take the statements of Mr. Gibbs and Mr. Restrepo which were fairly hard line but he -- he put forth a different view of what his view was in terms of the relationship with -- with Cuba. And I think we should wait. The U.S. government should wait for the official response from Raul Castro or his ministers in terms of how they want to proceed.

REP. SCALISE: And, you know, I would still -- I would still doubt that Fidel is removed from giving orders or having a direct say in how the government is running. But I do think as we look at and debate this proposal to change U.S. policy, a policy that's been in effect for decades, I think we need to look at a broad range of issues, not just the economic issues but the political issues and also the -- the impact it would have on Americans who live here today who were literally run out of Cuba who still have very vivid memories of their property being taken, their family being threatened, in some cases detained, and then all of the things that they escaped and what this would mean to them, the people that are contributing to our economy who are active citizens in their communities and are business owners and who have taken offense and then many have expressed very publicly the offense they would have to assisting this Castro government. Whether it's Fidel or Raul it's still the Castro government that's running and keeping the reins over citizens there. I don't know if any of you all have consulted --

MR. JONES: Can I respond to that?

REP. SCALISE: -- the different Cuban American communities throughout our country to --

(Cross talk.)

MR. JONES: The only thing we know -- the only thing those people know is that --

REP. SCALISE: Which people? Which people?

MR. JONES: The people you -- who are concerned about their property -- property being confiscated and families and the problems of the early 60s. The only thing we know after 50 years almost is that none of those problems have been solved with the current policy. They -- the confiscation of property, for example, first, not a single trademark has been confiscated. There are 5,000 registered trademarks of U.S. brands in Cuba that are maintained today, and I've taken companies down to the Cuban Chamber of Commerce and other places to bring --

REP. SCALISE: And I apologize to cut you off. My time is running out. Ambassador Cason has had his hand up and -- did you want to --

MR. CASON: Yeah. I think -- the embargo was put in place, of course, originally because of the confiscation of U.S. properties. Mr. Jones mentioned nickel. That was one of the properties that was seized from American -- the American government at the time. I'd like to make a point that nobody's policies have been able to budge Fidel Castro from the course that he's been on.

Fifty years the rest of the world except us has pursued a policy of engagement and trade and tourism. My question is where is the beef. They've been doing this for 50 years. We're the only ones that haven't. People say now we should do something different and Castro will change. It's not -- we don't have a magic pixie dust to make that happen because this is the nature of this guy.

It's too bad that nobody's policies worked but I think when they're gone what's left of the environment will be a leverage on the military because it's a military dictatorship. Those guys will see their vested interest moving the country in the right direction so that we can liberate the hordes of American tourists that we'd like to see go there.

REP. SCALISE: And for Mr. Thale and Ms. Rothkopf, I know China, Venezuela, other countries are doing business in Cuba today. We've heard testimony about the average per capita income, if you could address that as well, and what types of consumers are in -- are in the country that -- that we could even be doing business with if we went down that road. What -- what types of products do China, Venezuela, other countries provide that -- that aren't available or what are -- what are they not providing where -- where there even would be a role for America to play? And then to what type of consumer base is out there?

MS. ROTHKOPF: I think the first thing that we have to think about in terms of what the U.S. can provide that isn't being provided by other countries is to think about our proximity. And in my -- in my testimony I identified a number of areas, including agriculture, for example. Cuba has the potential to become the top foreign market for U.S. rice, for example. We've discussed tourism, machinery, oil. I think we talked about biotechnology. There's a whole host of products that we can provide including agricultural products and consumer products simply because we're closer which will give us a competitive edge over --

REP. SCALISE: What is the average per capita income?

MS. ROTHKOPF: Is that -- is that in your testimony? It's not in mine.

MR. JONES: The -- Mr. Scalise, the average -- I believe the average per capita -- the average per capita income is about one-fifth the United States, so the per capita income I think is about $40,000 and then Cuba is 8,000 (dollars) or $8,500. So there's no question consumer demand is not what's going to drive trade between the United States and Cuba. What's going to drive demand is infrastructure, wholesale commodities and so on. And the U.S. has -- it's less about filling holes. I think there are some holes but it's less about filling holes than it is about the comparative advantage we have in this -- (inaudible) -- produce shipping costs. And I think rice is the most single dramatic example.

REP. RUSH: The gentleman's time has expired.

MS. ROTHKOPF: And I was just going to add to that the additional tourist arrivals, just for example, from the increased tourist demands for -- for food will -- will boost domestic -- domestic demand for U.S. products as well.

REP. SCALISE: I yield back.

REP. RUSH: The chair thanks the gentleman. If the witness will indulge us we will go into a second round of questioning. And we will ask the members of the committee to restrict their questions to two minutes. And the chair recognizes himself.

Ambassador Cason, when -- I see that you served in Venezuela and Bolivia during your career of outstanding public -- of public service and -- have these two nations engaged in any form of nationalization of their -- of companies and other entities -- business entities?

MR. CASON: Yes. Bolivia most recently.

REP. RUSH: Would you -- would -- would you -- would you suggest that we create a trade embargo around these two nations?

MR. CASON: No. I think that, you know, if you were starting today and said would a trade embargo -- if we were to launch it today would it -- would it change Cuba's behavior I think we -- the answer would be no. And I think we've --

REP. RUSH: Why -- why would you -- why would you suggest that we continue the trade embargo against Cuba --

AMB. CASON: Well, first of all --

REP. RUSH: -- and -- and let me ask the question please -- and also why wouldn't we also have a similar -- (inaudible) -- as it relates to other countries that have significant human rights violations -- extraordinary human rights violations in some instances?

MR. CASON: As I said originally, the embargo was originally designed as -- as a reaction to confiscation of American properties in Cuba, that it's evolved over the years. I think if you were to say -- what we know about the embargo today -- if you started fresh would -- would it induce somebody like Fidel Castro to bring democracy. Like every other policy in the world of every variation that anybody else has tried it hasn't. So to think that ending the embargo now would somehow induce Fidel Castro at this late date in his life to become a Democrat or do any of the things that we say are our end game for Cuba is just not going to happen.

REP. RUSH: Time is up. The chair now recognizes the ranking member, Mr. Radanovich, for two minutes.

REP. RADANOVICH: Thank you, Mr. Chairman. Mr. Jones, I've got -- I do have a question for you. You testified that there are about 500 international companies represented in Cuba with substantial investment there.

But according to the State Department, the business environment is so unfriendly that the number of joint ventures dropped from 540 in 1982 to 287 in 2005.

Because of the government's recentralization efforts it is estimated that one joint venture and two small cooperative production ventures have closed each week since the year 2000 and foreign direct investment dropped from 448 million (dollars) in the year 2000 to 39 million in 2001 and to zero in the year 2002. Are these 500 international companies independently owned or are they joint ventures, and if they are joint ventures why the difference between the State Department figures and your testimony? Can you help bridge that?

MR. JONES: Yes, I'll try. First, the joint ventures are actually -- have fallen even further down to about 237 now, and there's a reason for that. Cuba, when it -- when it started into the joint venture business which is '94, '95, they were in a learning process. There hadn't been a single joint venture in Cuba between 1959 and 1994. They were learning how to do this. And things changed over the times and they -- and they learned what they wanted, what the country needed, which joint ventures contributed to its national economy which they wanted to do and didn't do.

And over the course of time they began closing and not renewing and not -- not entertaining small- to medium-sized joint ventures with a concentration on larger joint ventures that were much more strategic on a nationally important basis. For that reason, many were closed and many ended and the people left. Those 500 companies -- I haven't got the breakdown as to which are representatives, which are sales agents, which are real estate partners. All I know is that there -- there are offices there of non-U.S. companies for a variety of business reasons.

REP. RADANOVICH: So you're saying that Castro now permits wholly owned private international businesses to operate without taking a cut?

MR. JONES: Joint ventures are on generally a 50/50 basis. There have been some 100 percent foreign owned joint ventures, particularly in the power generation area. Most of them, as I said, are 50/50, with a joint venture partner and the Cuban enterprise with which it has a contract forms a board, develops a business plan, sets up a business. A joint venture -- the foreign partner can take its profits after taxes out of the country and many, particularly in the oil and mining and some of the areas that I mentioned earlier, are functioning very well.

REP. RADANOVICH: Thank you, Mr. Jones.

REP. RUSH: Gentleman's time has expired. The chair now recognizes the gentlelady from Florida, Ms. Castor for two minutes.

REP. CASTOR: Thank you, Mr. Chairman. Mr. Thale, in your testimony you state that some of the countries that currently trade with Cuba use their engagement to promote human rights. Provide an example for us or a few examples of what other countries that are currently trading with Cuba are doing to promote human rights.

MR. THALE: Thank you for the question. The two most dramatic, I think, and most high visibility examples are Brazil and Spain. And in the case of Brazil, the president of Brazil visited Cuba last January. He pledged $1 billion in credits for trade and investment. And it's widely believed, including by U.S. government officials, that he began a dialogue with the Cuban political leadership about the release of political prisoners and about long-term political relaxation in Cuba itself.

I think it's generally believed that President Lula continued to raise those issues in all of his government's subsequent interactions with Cuba. So again, I don't think Lula is expecting all 200 political prisoners to be released tomorrow, but I think that's -- that's an issue on the table for the Brazilians. I think Spain as it's led the European Union's policy shift in re-engagement with Cuba has had that issue on the table as well and I think it's fairly clear that the -- that the release of political prisoners for -- for Zapatero and the Spanish government is an important question.

Again, I don't think they're going to have a sort of we'll add a new trade deal, you'll release four political prisoners kind of thing but I do think you've seen movement on this. And I think the historic example here, Congresswoman, is that if you look at -- if you look at the period in the year around the Pope's visit to Cuba when the Vatican -- Vatican diplomacy focused on the political prisoner question, there was never any explicit deal made at all, but in that period the number of political prisoners imprisoned in Cuba was reduced by about a third.

Similarly, if you look at the period around when President Carter reopened the U.S. Interests Section in Havana the number of Cuban political prisoners dropped significantly. So I think the evidence is that you do see movement on these kinds of issues when there's consistent engagement, when there's real interaction and when you're not looking for sort of precondition or tit-for-tat kind of concessions.

REP. CASTOR: Thank you.

REP. RUSH: Thank you, Ambassador Cason, and I really -- and others -- the other witnesses and I really appreciate your testimony.

I must say that I spent four hours in meetings with President Raul Castro, an hour-and-a-half at the home of Fidel Castro and had, you know, some extensive conversations with him. And I must agree with your -- your other witnesses. Ms. Rothkopf, Mr. Thale and Mr. Jones certainly disagree with you about the mind of the Cuban people and the mind of Fidel Castro and the mind of Raul Castro as it relates to normalization. I want to just say that, in conclusion, it was very informative for me, a first time visitor to Cuba.

With that, the hearing is now concluded. I want to thank the witnesses for your presence. Thank you for appearing before us. and this hearing is now adjourned. (Sounds gavel.)


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