Amended in Assembly May 19, 2016

California Legislature—2015–16 Regular Session

Assembly Joint Resolution No. 3

Introduced by Assembly Member Alejo

January 5, 2015

Assembly Joint Resolution No. 3—Relative to the Cuban embargo.

LEGISLATIVE COUNSEL’S DIGEST

AJR 3, as amended, Alejo. Cuban embargo.

This measure would urge the Congress of the United States to support President Obama’s initiative to normalize diplomatic relations with Cuba and to move forward with legislation to begin delete lift the economic embargo on end delete begin insert help increase trade with end insert Cuba.

Fiscal committee: no.

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WHEREAS, The ability of American companies to do business
with Cuba is curtailed by the Cuban Assets Control Regulations
(31 C.F.R. 515), which were issued in 1963, that lay out a
comprehensive set of economic sanctions, including a prohibition
on most financial transactions with the island; and

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WHEREAS, These sanctions were made stronger with the Cuban
Democracy Act of 1992 (22 U.S.C. sec. 6001 et seq.) and the
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of
1996, which is commonly referred to as the Helms-Burton Act.
Most significantly, the Helms-Burton Act codified the embargo
and has had a lasting impact on U.S. policy options toward Cuba
by imposing economic sanctions, travel restrictions, and
international legal penalties; and

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WHEREAS, The Obama administration announced new United
States Department of the Treasury and United States Department
of Commerce regulations allowing more exports of certain products
to Cuba; and

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WHEREAS, The United States and Cuba recently signed an
agreement to restore commercial airline service between both
countries, which could potentially result in 110 daily flights to and
from Cuba. According to the United States Embassy in Havana,
authorized travel to Cuba by United States citizens increased by
over 50 percent since travel restrictions were eased in December
2014; and

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WHEREAS, Prior to the begin delete embargo, end delete begin insert embargo the United States
placed on Cuba in 1960, end insert the United States accounted for nearly
70 percent of Cuba’s international trade. Cuba was the seventh
largest market for begin delete U.S. exporters end delete begin insert United States exporters, end insert
particularly for American farm begin delete producers, and end delete begin insert producers.
Currently, end insert 84 percent of all food consumed in Cuba begin delete was imported
from the United States; end delete begin insert is imported; end insert and

WHEREAS, begin delete Despite the fact that the end delete begin insert The end insert United States and
Cuba are natural trading partners, begin delete the embargo forced Cuba to seek
out new sources for its domestic consumption at the expense of
U.S. end delete begin insert and California stands ready to be a major source for Cuba’s
domestic consumption, which will result in significant growth in
the United States end insert exports and begin insert the creation of more end insert American jobs;
and

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WHEREAS, A United States International Trade Commission
report states that small exporters currently avoid the Cuban market
because of the complexity of the regulations in the Trade Sanctions
Reform and Export Enhancement Act (TSRA); and

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WHEREAS, Removing the embargo would provide small- and
medium-sized enterprises with access to a much needed market;
and

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WHEREAS, Studies on lifting the embargo show a possible
economic spark of $1.1 billion, $365 million from sales of United
States goods, and a creation of up to 6,000 American jobs,
predominantly in agriculture and telecommunications; and

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WHEREAS, In 2000, under the TSRA, Congress began to allow
the sale of agricultural and medical products to Cuba. In four
short years, United States exports to Cuba rose from less than $1
million to $392 million by 2004, with United States agricultural
products capturing 42 percent of the Cuban market; and

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WHEREAS, begin insert According to a 2001 study sponsored by the Cuba
Policy Foundation, the estimated economic impact of expanded
agricultural exports under the TSRA is $3.6 billion. end insert According to
the United States Chamber of Commerce, the embargo’s annual
cost to the begin delete U.S. end delete begin insert United States end insert economy begin delete ranges from end delete begin insert is end insert $1.2 begin delete to $3.6
billion and end delete begin insert billion, and the embargo end insert disproportionately affects
begin delete U.S. end delete begin insert United States end insert small businesses begin delete who end delete begin insert that end insert lack the transportation
and financial infrastructure to skirt the embargo; and

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WHEREAS, These restrictions result in real reductions in
income and employment, negatively impacting U.S. small
businesses; and

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WHEREAS, Since 2008, Cuba has undertaken more than 300
economic reforms designed to encourage enterprise with small
businesses, and, in 2008, United States exports to Cuba reached
$718 million, with corn exports estimated at $198 million, followed
by meat and poultry at $152.6 million and wheat at $135 million;
and

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WHEREAS, Allies of the United States have taken a
disproportionate share of the market of an island that is only 90
miles from our shores and is a natural market for begin delete U.S. end delete begin insert United States end insert
goods and services; and

WHEREAS, California is currently the eighth largest economy
in the world but exported only $122,000 in agricultural products
to Cuba in 2013, approximately .00068 percent of the $18 billion
of agricultural products exported from California each year; and

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WHEREAS, According to the United States Department of
Agriculture’s Economic Research Service data for 2013, each
dollar of agricultural exports stimulated an additional $1.22 in
business activity, thereby further highlighting the potential for
creating American jobs through California agricultural exports;
and

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WHEREAS, California’s agricultural growers face great
opportunities by moving to Cuba to aid in the development of
agricultural technology, innovation, and investment; and

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WHEREAS, As Cuba raises its agricultural profile, Cuba will
need food manufacturing technology and education on effective
practices that Californian expertise can provide; and

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WHEREAS, California agricultural products will support
economic mobility by exporting products for middle and rising
middle classes in Cuba to consume; and

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WHEREAS, As a growing middle class rises, Cuba’s crumbling
infrastructure will no longer support these communities, and Cuba
will look to California for construction expertise and equipment,
which could lead to job growth in these California industries; and

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WHEREAS, The expected growth of infrastructure will allow
for the spread of telecommunication technology to advance in
Cuba, where only 5 percent of Cubans have Internet access; and

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WHEREAS, California is the high-tech capital of the nation and
is well positioned to export telecommunications infrastructure to
Cuba; and

WHEREAS, California pharmaceutical companies and begin insert medical end insert
devicemakers will be able to sell their products in Cuba, a new
market hungry for its products; and

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WHEREAS, Biotechnology firms will be able to partner with
California companies on key ventures such as research and
medical product development in areas focusing on diabetes and
cancer treatment; and

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WHEREAS, Cuba has already become a leader in the
biopharmaceutical arena, and its vaccine industry will be able to
ship more of its high-quality products to California to be
distributed to underserved populations at lower costs; and

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WHEREAS, California begin delete healthcare end delete begin insert health care end insert providers can
benefit immensely from renewed Cuban relationships; and

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WHEREAS, California Latinos are an increasing part of the
electorate, and increasing economic integration with Latin
American countries is a natural evolution of who America is
becoming; and

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WHEREAS, Acknowledging that the begin delete embargo has not produced
any positive economic or political outcomes in end delete begin insert increase in trade
with end insert Cuba begin delete or the United States, and that lifting the embargo end delete will
better serve California’s interests and improve the lives of Cubans
and their families; begin delete now, therefore, be it end delete begin insert and end insert

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WHEREAS, California can benefit economically and culturally
from direct air travel from the United States to Cuba, including
direct flights from California; now, therefore, be it

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Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature of the State of California
urges the Congress of the United States to support President
Obama’s initiative to normalize diplomatic relations with Cuba
and to, with all deliberate speed, move forward with legislation to
begin delete lift the economic embargo on end delete begin insert help increase trade with end insert Cuba; and
be it further

Resolved, That the Chief Clerk of the Assembly transmit copies
of this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, to the
Minority Leader of the House of Representatives, to the Majority
Leader of the Senate, begin insert to end insert the Minority Leader of the Senate, and to
each Senator and Representative from California in the Congress
of the United States.