Posted on 08/02/2004 2:28:44 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
In his strategy to foster a Cuba free from Fidel Castro, one of the world´s last Stalinist rulers, President George W. Bush has directed that several actions be taken to deny resources and legitimacy to the communist regime. A key objective is to close off the flow of hard currency to the island, which is used prop up Castro´s dictatorship and fund its covert operations in Latin America.
The new limits placed on family remittances to Cuba have gotten much media attention, but this flow is small compared to other sources. Limits have also been placed on the hard currency allowed those visiting Cuba. President Bush has drawn attention to one unsavory aspect of Cuban tourism, citing the Protection Project at Johns Hopkins University, which found that Cuba has “replaced Southeast Asia as a destination for pedophiles and sex tourists.” In a speech in Tampa July 16, Bush stated, “As restrictions on travel to Cuba were eased during the 1990s, the study found an influx of American and Canadian tourists contributed to a sharp increase in child prostitution in Cuba.”
U.S. operations are being stepped up against “mule” networks and others who illegally carry money to Cuba outside of tourism, mostly drug money laundered by the regime for a hefty slice of the take. There is also a Cuban Asset Targeting Group designed to neutralize Cuban government front companies operating in the United States and to identify new ways hard currency moves in and out of Cuba.
On July 13, the Senate Judiciary Committee held a hearing on Section 211 of the Omnibus Appropriations Act of 1998, which deals with one of these ways. Section 211 forbids the recognition of claims to U.S. trademarks from property confiscated by the Cuban government. Like other communist revolutionaries, when Castro seized power he engaged in the wholesale expropriation of private property in Cuba, whether owned by Cubans or by foreigners. The Castro regime also tried to grab intangible property, such as trademarks, that the confiscation victims owned in the United States and other countries.
The Senate hearing was triggered by the need to revise Section 211 on technical grounds to comply with a World Trade Organization ruling that objected to the U.S. law because it only pertained to Cuba. Congress needs to amend Section 211 so that it applies to all persons, regardless of nationality, a sensible expansion. Senate bill S. 2373 and its companion House bill, H.R. 4225, will do that. Both bills have substantial bipartisan support. Indeed, two prominent Democrats, Sen. Bill Nelson of Florida and Bruce Lehman, an Assistant Secretary of Commerce and Commissioner of Patents and Trademarks in the Clinton Administration, testified in behalf of preserving Section 211 while bringing it into compliance with the WTO.
One example of how Castro has used confiscated trade marks to earn hard currency is provided by “Havana Club” rum, a top-of-the-line brand, whose label is the legitimate property of Bacardi-Martini Ltd. The Bacardi label was legendary in the rum trade for generations prior to Castro´s rise, having been founded in 1862. The family-owned business fled Cuba after its assets were seized and rebuilt itself into the world´s fourth largest spirits company.
Castro has made an agreement with French liquor conglomerate Pernod Ricard to produce and market the Havana Club brand around the world. The Cuban-French venture has been exploiting the label outside the United States and has been trying to obtain title to the U.S. trademark so it can be sold in the American market. According to a report in Forbes, Pernod Ricard splits the $40 million in profits from the stolen brand directly with Castro. In 1993, Castro granted Pernod Ricard a monopoly on the island's rum. Last year, nearly 2 million cases were sold under the pirated Havana Club label, generating $170 million in hard currency for Cuba.
To protect and expand this lucrative partnership, the European Union challenged Section 211 on behalf of the French company in the hopes of having the entire law taken off the books. The United States cannot allow the EU to continue to use the WTO as a platform to assail not only America´s economic policy, but its foreign policy as well. For this reason alone, Congress must preserve Section 211.
On its merits, it´s an open and shut case of trademark piracy being used to fund a rogue regime hostile to the United States. Yet, there was one witness at the Senate hearing arguing for the repeal of Section 211, William Reinsch, president of the National Foreign Trade Council. The aim of the NFTC is to remove all economic sanctions based on moral or geopolitical grounds. Its member firms are consumed only with the pursuit of profit. No regime is so odious that the NFTC doesn´t want to do business with it. The NFTC has been particularly eager to open Cuba for trade in defiance of Bush administration strategy. Reinsch´s argument was that Section 211 provides a “pretext for the Castro regime to retaliate against trademarks currently registered in Cuba by U.S. companies.” In other words, the best way to deter Castro from committing new crimes out of spite is to forgive him for crimes already committed.
What is important to the NFTC is not the merits of the case. Its members know what kind of regime is in Cuba and what it will take to do business there. Castro runs the island by personal fiat, not the rule of law. He has shown his willingness to steal property and close down firms. The only way to make money in Cuba is to cozy up to the tyrant. By taking Castro´s side on the Section 211 issue, the NFTC wants to show it can be trusted to back his play and is thus deserving of a piece of the action like his other cronies. It is a disturbing trend for supposedly American firms to be bullied by dictators into lobbying for foreign causes in exchange for the right to do business. However, for corporations which see themselves as transnational entities devoid of any national loyalties, backing a cause – any cause – for money carries no stigma.
The NFTC argument itself was easily rebutted by Lehman, who drew the vital distinction – which Reinsch ignored, between Cuba´s “ right to register or enforce trademarks that it legitimately owns, as distinguished from those it has acquired through confiscation.” Nancie Marzulla, president of the non-profit group Defenders of Property Rights, clearly stated the principle involved, “The United States currently occupies a unique position in the global economy. A decision on the part of our government to honor only those trademarks which have been legitimately acquired, not confiscated by oppressive regimes, sends a clear message to the world that the United States cares deeply about the fundamental right to private property.”
The United States should not be bullied by Cuba, the EU, or the WTO into abandoning its foreign policy. Despite its heavy schedule, Congress should act to preserve Section 211 this year as another element in America´s strategy to deny the resources needed by the Castro regime to extend its tyranny, perhaps even beyond the grave of its aging dictator.
William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
ping
I guess, given that the economy is doing so well, socialists like Willie Green have to change focus away from outsourcing.
btt
Economic sanctions are an alternative to war. They are a way to put pressure on an odious government short of landing the marines.
We did something similar in Iraq, and there as in Cuba, France was first in line to violate the sanctions. Failure of sanctions meant war, in that case.
In this case, failure of sanctions should mean extending sanctions to France and French companies.
You know, if you arw going to take a shot at someone, it's kind of weak to erase his name from the ping.
You are also very logical --- and once again correct as a consequence --- saying
if you are going to take a shot at someone, it's kind of weak to erase his name from the ping.
But I was not trying to take a shot at that someone. As a logician, you probably know that for your conclusion to be true, the premise must be true as well. It is not. Take it as information and ignore it if you find it unimportant --- that's your prerogative.
You have my respect for the position you took given the information at your disposal.
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