WASHINGTON — The Obama administration said Friday it will further open U.S. exports to Cuba by lifting a restriction that required businesses to apply for a license to export products like apparel, footwear and accessories directly to Cuban citizens.
The move would lift a barrier for retailers and brands, as well as online retailers, to sell directly to Cubans without having to obtain a U.S. government-approved license, according to a Commerce official, who spoke on the condition of anonymity.
The regulatory change is slated to take effect on Monday.
Prior to 2015, U.S. companies could not sell anything to the Cuban market due to an economic embargo that has been in place for decades.
President Obama took steps to reestablish economic and travel ties with Cuba in late 2014. The sweeping policy changes outlined by Obama at the time were the first since 1961, when the U.S. severed diplomatic ties with Cuba and, subsequently, placed an economic embargo on the country during the Cold War.
The President does not have the authority to lift the embargo. That will take an act of Congress, which remains divided on the issue. But Obama has slowly been easing sanctions through his executive power to open more trade with Cuba.
Through the new round of executive actions announced on Friday, the Commerce Department’s Bureau of Industry and Service said it will “generally authorize exports of certain consumer goods that are sold online or through other means directly to eligible individuals in Cuba for their personal use.”
A senior administration official said on a call with reporters that the change in export regulation will cover “all types of consumer goods you can think of, from durables like air conditioners and television sets to things like toothpaste, toothbrushes and toilet paper.”
“We’ve seen over time the impact grow as people gain a better understanding of what indeed is authorized,” an administration official said on the call. “Our expectation is the impact of our regulatory changes will continue to build over time as people, businesses and banks and others continue to gain an understanding of what is now indeed authorized. Since the president’s announcement [in 2014], we at Commerce have authorized over $6 billion of potential exports to Cuba under the new policy. That number has increased percentage-wise from 2015 to 2016 very significantly so more and more businesses are becoming aware of the opportunities and exploring the possibility of doing business in Cuba.”
While the administration’s steps to reestablish economic and travel ties with Cuba are seen as a positive by many in the business community, the Cuban market still remains largely closed. The Cuban government has tight control over the Internet and the purchasing power of average Cubans, who have lived for decades under Communist regime and state-owned enterprises, is extremely limited.
But industry officials have said the easing of restrictions and restoration of diplomatic ties with Cuba could eventually help pave the way for more exports to the island nation as well as a broader discussion on the embargo on Capitol Hill.
U.S. officials said they are hopeful that the policies they put in place now under the Obama administration will help spur bilateral trade in the future.
“These amendments [to regulations] will create more opportunities for Cuban citizens to access American goods and services, further strengthening the ties between our two countries,” said Commerce Secretary Penny Pritzker. “More commercial activity between the U.S. and Cuba benefits our people and our economies.”
Treasury Secretary Jacob J. Lew said, “President Obama’s historic announcement in December 2014 charted a new course for a stronger, more open U.S.-Cuba relationship. The Treasury Department has worked to break down economic barriers in areas such as travel, trade and commerce, banking, and telecommunications. Today’s action builds on this progress by enabling more scientific collaboration, grants and scholarships, people-to-people contact and private sector growth. These steps have the potential to accelerate constructive change and unlock greater economic opportunity for Cubans and Americans.”