Washington - AFP
The historic breakthrough in US-Cuba relations announced Wednesday will allow more money to flow to the Caribbean island but keep trade and investment relations under tight controls, experts said.
After a trade embargo on Cuba for more than 50 years, the White House said it will expand how much money Americans can send to the impoverished country and open up the flow of US tourists there.
But investment and trade will remain strictly controlled under laws passed by Congress and Cuba's own restrictions, holding off moves to enter the Cuban market by industries from US hoteliers to oil companies and automakers.
Gary Hufbauer of the Peterson Institute for International Economics in Washington estimates that a full thaw in relations could open up $5-10 billion in investment into Cuba.
But that will not start right away, he told AFP.
"This is only the beginning of a long path to normalization. For the most part, US firms are still blocked, not only by US sanctions, but also by the heavy hand of the state in Cuba."
The deal announced by the White House will boost the flow of dollars into Cuba. It quadruples the amount of remittances allowed to $2,000 per quarter, and gives general permission for a broad range of US visitors to the country.
It also allows Americans to export building materials and agricultural equipment to Cuba to support the country's nascent private sector.
"This change will make it easier for Cuban citizens to have access to certain lower-priced goods to improve their living standards and gain greater economic independence from the state," the White House said.
It also allows US banks to set up accounts with Cuban financial institutions to facilitate transfers and the use of US credit and debit cards, which will facilitate more visits to the country and more inward flow of dollars as well.
The White House also said that the US telecommunications industry will be permitted to build infrastructure in Cuba for telephone and internet services, improving communications between the two countries.
But beyond that, there was little for businesses, because the five-decade-old embargo officially remains in place.
President Obama "has done virtually all he can without an act of Congress by announcing sweeping changes to the US sanctions on Cuba," said Lawrence Ward, an international business lawyer with the Dorsey & Whitney law firm.
"Obama has squarely placed the ball in the Congress’s court to engage in serious discussion on fully lifting the 50-year embargo."
Hufbauer said there remain important hurdles to that happening.
"Both trade and investment depend on reciprocal liberalization with the United States, across a range of sectors and measures, and this will take time," he said.
"Also, Cuba needs to compensate for past expropriation," he added.
The Fidel Castro-led communists who took power in 1959 seized millions of dollars worth of real estate and other property from American owners in the process.