Sanctions can alienate allies

Posted on Thu, Feb. 09, 2006

CUBA POLICY
Sanctions can alienate allies

BY JAKE COLVIN
jcolvin@nftc.org

Last weekend, the Mexican government and the Starwood Hotels and Resorts
learned just how messy U.S. policy on Cuba can be when both were dragged
into a dispute over a conference of Cuban officials and U.S. business
delegates. To prevent future conflicts with important U.S. allies and to
preserve the reputation of U.S. brands worldwide, the U.S. government
should reconsider how it applies sanctions.

The controversy began when Starwood, the U.S. parent of Sheraton Maria
Isabel Hotel in Mexico City, intervened at the request of U.S. officials
and ordered a delegation of Cuban officials to leave its hotel. The
Cubans were participating in a conference on energy issues with U.S.
business representatives, including myself. A Starwood spokesperson said
that the Cubans were asked to leave to comply with the terms of the U.S.
embargo against Cuba.

Unintended consequences

This incident highlights the unintended consequences and capriciousness
of unilateral U.S. sanctions. By applying U.S. law to a foreign
corporation, the United States has strained relations with an important
ally.

While the Mexico-based Sheraton hotel shares its name with a division of
an U.S. corporate parent, the hotel is organized under the laws of
Mexico, which Mexican officials and newspaper editorial boards have
angrily noted.

This unnecessary irritant serves to undermine official cooperation on
important security and economic issues and damages the goodwill of the
United States among the broader population.

Extending U.S. sanctions to foreign corporations also puts these
companies between a rock and a hard place by challenging them to comply
with conflicting laws. In this case, the Mexican Congress passed a law,
called a blocking statute, in response to the Helms-Burton Act passed by
the U.S. Congress, which extended U.S. sanctions on Cuba to foreign
corporations. This blocking statute prevents companies organized under
Mexican laws from complying with these extraterritorial U.S. sanctions.
As a result, the Sheraton Maria Isabel is put in the impossible position
of having to comply with contradictory U.S. and Mexican laws.

Over the longer term, these sanctions put the reputation of U.S. brands
at risk around the world. What conference organizer in his right mind
would ever organize a meeting even remotely related to Cuba in a
U.S.-branded hotel, let alone a Sheraton? Organizers will look toward
companies such as the French-based Sofitel instead to hold future events.

More broadly, the application of U.S. sanctions to disrupt this
conference is counterproductive as it limits our ability to project
democratic values and advance U.S. foreign-policy goals. This conference
provided a forum for dialogue on economic issues and introduced a
delegation of American capitalists to Cuban officials. It is
disappointing that the U.S. government, which advocates dialogue and
engagement in so many other countries around the world, including China,
would stifle discussions involving Cuba.

Take a critical look

While it is absolutely necessary to use all of the means at our disposal
to advance U.S. foreign-policy goals, current U.S. policy toward Cuba is
not making the impact that Congress or the president intended. At the
same time, unilateral sanctions have caused unexpected problems with
U.S. allies, are harming the reputation of U.S. companies and are being
applied unevenly.

The U.S. Commission for Assistance to a Free Cuba, chaired by Secretary
of State Condoleezza Rice, will reconvene in 2006 with en eye toward
further strengthening sanctions against Cuba. A better idea would be to
take a critical look at what the sanctions have really accomplished.
This latest incident argues for new approaches, not more of the same.

Jake Colvin is director of the USA*Engage project of the National
Foreign Trade Council, a trade association based in Washington.

http://www.miami.com/mld/miamiherald/news/opinion/13826663.htm