"The U.S. has given so many concessions and not received anything in return," Carlos Gutierrez tells TIME
Former Commerce Secretary Carlos Gutierrez told TIME Thursday that the U.S. “will have egg on our face” following President Barack Obama’s move to normalize diplomatic relations with Cuba for the first time in half-a-century. Gutierrez, a Cuban-born former Kellogg CEO who worked in the administration of President George W. Bush, is now a consultant at the Albright Stonebridge Group.
Here’s his Q&A with TIME, lightly edited and condensed for clarity.
How much flexibility will businesses have if Congress doesn’t actually act to lift the embargo?
How much flexibility there will be for U.S. businesses will depend on how much flexibility the Cuban regime gives to U.S. businesses. That’s the aspect of this that has brought down these agreements. At the end of day, if the Cubans don’t change regulations to allow businesses to go in, invest, and make money [there is not much they can do]. There is talk about opening the Internet, but Cuba is one of most closed Internet countries in world. We have to see this with a certain amount of skepticism that they really are going to allow citizens to have Internet.
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There’s always been exception [in the embargo law] to be able to do commerce in the telecommunications industry because communications inside the island and communications outside island can only be a benefit. That’s the rationale. But the roaming rates are outrageously high. Who is able to buy a cell phone in Cuba is a matter of public policy, and there are very strict laws, so you know, what we haven’t seen is what the Cuban government is going to do.
This has been a very lopsided agreement, and I can tell you that the Cubans today feel that they have had a major victory. This is a major political win for Raúl Castro; the fact that we recognize them diplomatically is a major political win. They are going to go to Summit of the Americas [in Panama in April], and Raúl Castro will be the man of the hour. President Obama will be comfortable, with the Latinos cheering him on, but the real test really happens after the summit, and the standing of the U.S. in the hemisphere after the U.S. has given so many concessions and not received anything in return.
Which industries are likely to take advantage of loosened restrictions?
Theoretically, the telecommunications industry, to some extent the agriculture industry, to some extent the pharmaceutical industry. The extent to which they will take advantage of this will rely on the good will of the Cubans. Business will only succeed if the Cubans want business to succeed, and everything we have seen from the Cubans over the last 50 years is that they will not allow business to succeed. Why is it different this time? They need to demonstrate that it is different.
What impact will this have on the Cuban economy?
It has some benefit in that the amount of remittances has increased. What we need to remember is that the average Cuban gets paid $20 a month. A rationing card for 30 days only lasts 17 days. The Cuban government has total control. If they let U.S. businesses, let telecommunications, and let credit card companies set up shop freely, the government will lose control. You can use your credit card Cuba, but the banks have to set up inside Cuban banks, and there will probably be a fee that goes to the Cuban government. All of these things are designed to strengthen the government’s hold on the economy, and history suggests that they will not give up an ounce of control.
Will this have any impact on the U.S. economy?
Cuba is an extremely poor country. It is not as if a McDonalds is going to open in three weeks, or we are going to start exporting cars. It doesn’t work like that. People say, now in Cuba you can buy a car and that shows it has opened up, but a car costs $50,000 in Cuba, that’s a heck of a price if you make $20 a month. The big risk here is for President Obama. The Cubans know this agreement can be derailed easily in the U.S. because of politics and because of Congressional intervention. The moment that happens, it is an excuse to blame the U.S. In the meantime, the Cuban government has pocketed all of the concessions. They have been victorious, and they will move on to have the same type of regime they have today, and we will have egg on our face way that President Carter did and other presidents have. That’s the thing to watch, that’s thing to stay close to and not believe that somehow magically Cuba is changing.