Key issues at present
Only one high level issue is embedded in this case. The title would lead the reader to think that the case was about Sherritt Corporation. When in fact it’s a larger economic issue affecting U.S. companies versus all non-U.S. companies around the world. (Except those from Israel & Uzbekistan) Sherritt was just the first company to be affected by the Helms-Burton law. It was later pointed out in the case that Sherritt had no U.S. business relations. Essentially the law only inconvenienced the members of the board and their families. The real issue is around the thirty plus years of, and now tightening, sanctions by the U.S. against Cuba. As a result not only have U.S. companies lost assets in Cuba from 30 years ago, they and others are in a worsening position to conducting business in the country when the sanctions are finally lifted.
We believe there is another economic issue under the surface faced by the U.S. in this situation. While U.S. companies unable to conduct business with Cuba there is no subsequent GDP benefit for our country. Meanwhile, we continue to take large numbers of Cuban citizens as immigrants. The increased population negatively affects unemployment, and is amplified by the fact that our companies can’t conduct business with their country of origin. Another words if allowing our businesses to conduct trade with Cuba would create more job opportunities, essentially offsetting the immigration effect on unemployment.

Analysis
The U.S. sanctions were having some desired result, which is to force the country to deploy more diplomacy and improve human rights. As was indicated by Cuba’s electoral reform in 90’s, where citizens were allowed to vote on their National Assembly Representative. At a broader level, Cuba was reaching out to other countries, such as Argentina, and members of the EU, to establish trade. The fact that they reached out to these countries indicates willingness to change.
The fact that the U.S. is greatly out numbered by other countries trading with Cuba, greatly inhibits the progress of diplomacy. With Cuba’s shift in foreign trade with the EU and Latin America from single digit percentages up to 30% each from 1988 to 1993 is evidence of the weakening power of U.S. embargo application on the country. It is likely the sanction efforts will eventually fail to have any direct affect.
At which point it only makes sense to lift the sanctions, accept the political situation and attempt a more constructive method. In the case the authors point out that sanctions have not always provided the desired results. Cuba is one indication of this fact along with North Korea, Libya, and Iraq. Since seeking out trade possibilities with non-U.S. countries, Cuba’s economy has been improving. As indicated in exhibit 5 in the case, their GDP growth was contracting by 15% in 1993, only to significantly turn around in 1994 with a 0.7% growth. Their GDP continued to grow by increasing percentage through 1996 to 3%. Meanwhile, their growth of foreign debt is growing at a slower rate at 2.5%, 3.5%, 4.5% between 1993 to 1996 respectively. At the same time the GDP per capita is increasing. With that I assume an improving standard of living, without knowing the inflation or unemployment statistics. These factors indicate a growing economy, in which the political regime is obviously making some correct decisions. As previously mentioned, there is evidence that they are moving, albeit slowly, away from entirely government controlled to adopting some free market. (But not much)
Despite all of this we do feel there are grounds for the U.S. not to trust Cuba and be cautious when dealing with them. Considering start of the conflict between the two countries began sometime around the time the Soviet Union had a strong relationship with Cuba during the Cold War. Intensified by Cuba allowing them to place nuclear missiles on the island so close to the U.S.
However upon the dismantling of the Soviet Union, we feel the U.S. should have reassessed the situation after some time and looked for opportunity to engage Fidel Castro. Attempting to destroy an entire countries economy by telling other non-U.S. companies conducting business with them they will be punished, is not amicable or diplomatic.

Future Course of Action

The case ended with President Clinton needing to make a decision on whether to continue or suspend the HB law. He needed to assess the situation with allies and Cuba and take a stand. Although the U.S. may not have agreed on Cuba’s way of government and handling of human rights issues it was evident that the sanctions were not effective.

The U.S should have taken a different approach at resolving the issues with Cuba. Demanding that Sherritt International Corporation stop all business with Cuba or they would be punished in the form of restricting their entry to the U.S. was not a diplomatic approach. Neither was the expectation that all other nations should follow the U.S on the trade embargos. The Helms-Burton law should have been revisited and updated to reflect the changing times.
Some of the changes would include allowing people to travel to Cuba freely. Allowing Americans to visit the island would help the economy. The American dollar would start off by landing in the hands of those that have direct contact with the tourism and later exchanged for other goods or services such as a local shoe cobbler or the baker. Restrictions on Cubans in the U.S. sending money back to their families should be removed. By allowing the private sector to handle more money, it gives them a sense of independence from the government which can eventually lead to reform. The U.S. should also take steps towards engaging themselves with the Cuban government and accepting the fact that the sanctions were not a win-win situation for either country. They need to sit down with the Cuban officials and come up with new agreements that will benefit both countries. For example, by making changes, U.S. companies are now able to have a global presence in a country where nations from all over the world do business with. This will also allow cubans to have access to food and other goods at a lower cost to them. Implementing some of these changes will show that we are ready to have an open conversation with the Cuban government as well as with other nations globally. Through engagement and communication the U.S. can than perhaps achieve what the initial goal should have been, constructive discussions about diplomacy and human rights.