RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/303
24 September 2001
(01-4523)
Council for Trade in Goods
5 October 2001Original:  Spanish
REQUEST FOR EXTENSION OF  WAIVER UNDER ARTICLE IX.4 OF
THE WTO AGREEMENT:  CUBA - ARTICLE XV:6 OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
The following communication, dated 19 September 2001, has been received from the
Permanent Mission of Cuba.
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The Government of the Republic of Cuba request s an extension of its waiver of the provisions
of Article XV:6 of the General Agreement on Tariffs and Trade, which is due to expire in
December 2001.
The reason for this request for a further exemption is that the conditions which make it
impossible to sign a special exchange agreement with the Members of the World Trade Organization
(WTO) continue to exist.  Cuba therefore requests an extension of the waiver granted in 1964 and
renewed in 1996.
Cuba is not a member of the International Monetary Fund and other international financial
institutions, and therefore does not adopt the policies which those institutions impose.  Nor does it
have access to major sources of credit from international financial organizations as other countries do.
In addition, under Title I, Section 104, of the Helms-Burton Act, the United States statutorily
opposes Cuba's membership of the international financial organizations, through instructions from the
Secretary of the Treasury to the United States Executive Directors in such institutions.
While the Cuban economy has been able to recover from the downturn of the period 1989-
1993 caused by the loss of its main trading mark ets with the disintegra tion of the USSR and
disappearance of the Council for Mutual Economic Assistance (CMEA), the results achieved have not
yet made up for the decline accumulated over that period in some sectors of the economy, such as the
sugar industry, with the result th at trade in goods in the year 2000 represented only 48.5 per cent of
the 1989 level.
Through hard work and determination the country has managed to achieve a sustained and
expanding economic recovery:  had it been able to rely on medium- and long-term external financial
support, it could have achieved higher and stronger economic growth.
One of the main factors hampering the Cuban economic development potential has been the
economic war waged by the Government of the United States against Cuba.  The most telling
manifestation of this war is the blockade that has been in force at the instigation of the United States
Congress since 3 February 1962, when the United States Government implemented the Cuban Assets
Control Regulations (28 FR 6974;  31 CFR Part 515), which established prohibitions applicable to all
commercial and financial operations connected with Cuba, including those involving United StatesG/C/W/303
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firms or firms based abroad or firms owned or controlled by United States nationals or United States
firms.  These Regulations also froze Cuban assets in the United States and imposed severe travel
restrictions on United States citizens, who could only travel with express authorization from the
United States Treasury Department.
They openly impose restrictions on the free movement of goods and services, banning import
into the United States of any products of Cuban origin, as well as any products imported from or
through Cuba.  This blockade has had an enormous adverse impact on all sectors of Cuban society for
over 40 years, causing the country billions of dollars of losses (over US$67 billion).
The United States policy impedes external financing for the Cuban nation, as may be seen in
the refusal to grant direct financing, so that access to credit is under burdensome conditions andprovided on a much less flexible basis than credit from financial institutions and official sources.  It
also restricts free trade through the official ban on the use of the United States dollar in external
commercial and financial transactions by the Cuban Government, so that the Government has to carry
out such transactions in other currencies even though the prices of its main commodities are quoted in
dollars on world markets.  As a result, the country has incurred huge losses owing to appreciation and
depreciation of that currency in relation to the currencies of our main trading partners, as well as the
instability caused to our enterprises by a double exchange-rate risk.
After 40 years these Regulations remain fully in force, with the effect of maintaining an
economic, commercial and financial blockade on Cuba.
One of the blockade measures that has caused the greatest harm to the Cuban economy, and
one which has been strongly condemned by the international community since its application in 1962,
is the so-called "shipping blacklist", under which ships owned or controlled by the United States are
prohibited from engaging in trade with Cuba;  United States firms, subsidiaries or individuals abroadare prohibited from trading with Cuban-owned or -c hartered ships;  and assistance is withheld from
countries whose merchant ships touch at Cuban ports.  It also prohibits the provisioning of listed ships
in United States ports, and transportation in such ships of any cargo generated in the United States,
which obviously affects Cuba's international trade as an island nation whose economy and
development depend on foreign trade and require goods to be shipped by sea.
The hostile nature of United States policy towards Cuba was given a further twist with the
adoption of the Torricelli Act in 1992.  This Act establishes sanctions against countries which grant
economic assistance, trade or maintain relations with Cuba;  increase the sanctions against shipping
companies which transport freight to or from Cuba;  and prohibit trade with subsidiaries of
United States companies situated in third countries. This ended trade of which 90 per cent was
essentially in medicines and food.
The economic, commercial and financial blockade was further heightened in 1996 with the
adoption of the Helms-Burton Act by the United States Government.  The aim of the Act was to
hinder Cuba's policy of opening up its economy to foreign investment, which has prevented the
possible conduct of business and intimidated potential foreign investors, resulting in delays inshipments of high priority goods for the Cuban economy.
More recently, in October 2000, the United States Congress approved new measures which
strengthen the prohibition on access of Cuban goods and services to the United States market.  These
are contained in Title IX of the Agriculture Appropriations Act for 2001.  The Trade SanctionsReform and Export Enhancement Act of 2000, which was put forward as a step towards easing the
blockade as regards  the sale of agricultural products, food and medical products, does not essentially
modify the blockade policy pursued over the last 40 years against Cuba, since it maintains:G/C/W/303
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- The requirement that any sales of such products must be submitted to the usual
mechanisms of United States Government authorization, control and political
decision with regard to Cuba, all of which is contrary to the rules governing
international trade;
- the prohibition of private or federal financing of sales of agricultural commodities to
Cuba;
- the bulk of the restrictions contained in the Torricelli Act for sales of medical
products, maritime transport and trade with United States subsidiaries established in
third countries.
Hence, the sales of food to Cuba which are supposed to take place remain subject to political
considerations, which points to the impossibility of establishing mutually advantageous trade. In
addition, the restrictions on the right of United States citizens to travel to Cuba, which until now had
been a prerogative of the Executive, have been given the status of law, with the intention of closing
off this source of earnings for the Cuban economy.
With regard to the IMF, Cuba wishes to draw  attention to the fact that the economic and
exchange-rate policies advocated by that institution as being universal recipes, when applied by less-
developed countries which lack appropriate structures and regulations, create a situation in which they
are vulnerable to the financial transnationals' self-serving quest for quick and bigger profits.
The financial structures of the less-developed countries are objectively not in a position to be
able to compete with the big international banks and insurance companies, and therefore the emphasis
placed on  uncontrolled liberalization of  financial services, together with the fact that mesures to
regulate financial flows have not been adopted, is one of the factors that has contributed to theoutbreak of the economic crises that have so greatly affected our economies.
This reality has now been understood by a large number of countries, which are calling for a
review of these economic policy approaches that do nothing to help development and bridge the
economic and social gap dividing rich countries from poor countries.
For these reasons the Cuban authorities have maintained an exchange rate policy enabling it
to encourage the economic growth which commenced  in 1994 and ensure that the economy continues
to function properly in the current circumstances, in order to preserve the major achievements won in
the economic and social fields.
Cuba's use of the waiver granted in 1964 has not had any adverse effects on other WTO
Members, who have not had any need to hold consul tations in that connection;  thus Cuba has shown
that it has complied with its commitment to make use of the waiver without thereby affecting the
objectives of the General Agreement or harming or impairing the rights of the other parties.
The Government of the Republic of Cuba assures the other WTO Members of its willingness
to use the waiver in order to promote investment and trade with Members.
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