Foreign Relations of the United States, 1964–1968, Volume XXXII, Dominican Republic; Cuba; Haiti; Guyana

243. Paper Prepared by Gordon Chase of the National Security Council¹

Washington, February 26, 1964.

ECONOMIC ISOLATION POLICY—SUMMARY

A. Free World Shipping to Cuba

1. In 1962, Free World ships made a total of 932 trips to Cuba.

2. In 1963, Free World ships made 371 trips to Cuba. This represents roughly a 60% reduction from the 1962 level of Free World shipping to Cuba.

3. The prospects for further reduction in 1964 are fairly bright. In 1963, the Greeks, Lebanese, and British were the primary shippers. For all practical purposes, the Greeks have now left the trade. A Lebanese law is expected to become effective in mid-March which should eliminate many Lebanese ships during 1964. We have made very little headway with HMG, but a U.S. deal with the biggest shipper in the British trade (Mavroleon) is expected to result in a substantial reduction in the British ships by the end of 1964. Thus, the shipping figures in 1964 should be even lower than in 1963; this of course assumes that we can prevent other Free World ships from picking up the slack which we expect the Greeks, Lebanese, and Mavroleon to leave.

B. Free World Aviation to Cuba

1. In October 1962, Free World scheduled services to and from Cuba consisted of 20 flights per week, operated by four carriers. Also, there was a Cubana flight which operated between Mexico City and Havana, and a Canadian cargo service which operated once a week between Montreal and Havana. In addition, there were a number of Free World non-scheduled operations to Havana.

2. At present there is only one Free World scheduled service to Havana—Air Iberia operates between Madrid and Havana once a week. Cubana still operates its flights to Mexico and is now also operating, twice a month, to Madrid. The non-scheduled Canadian cargo run is still in operation. Other non-scheduled operations to Havana have been substantially reduced.

3. The prospects for 1964 appear fairly bright. At the least, we think we can hold the line. Hopefully, OAS action, because of the Venezuelan arms cache discovery, will result in the cutting-off of the Havana/Mexico City air link. This will put another crimp in Castroʼs efforts to bring Latin Americans to Cuba for subversive training. (Other steps have already had a marked effect—in 1963, as compared to 1962, there was a 50% reduction in the number of Latin Americans who traveled to Cuba.)

C. Free World Trade with Cuba

1. In 1958, Cubaʼs total trade with the Free World amounted to $1.5 billion. Of this, about $1 billion was trade with the U.S., while about $500 million was trade with other Free World countries.

2. In 1962, U.S. trade with Cuba was negligible while Free World trade with Cuba fell about 50% from 1958 levels to about $200–$250 million; exports to Cuba were roughly $115 million while imports from Cuba were roughly $120 million. Estimates indicate that when all the statistics are in, Free World trade with Cuba in 1963 will amount to roughly $250–$320 million; exports to Cuba are expected to remain the same at roughly $115 million while imports are expected to jump to $190 million. A table is attached which shows the primary Free World traders in 1962 and 1963.

3. The prospects for 1964 are not at all good. Assuming we generally continue on our present course, and take no further concrete steps to restrict trade (e.g. the drastic proclaimed list action), it is estimated that total Free World trade with Cuba could amount to roughly $520 million, an increase of nearly 75% over 1963. This, of course, could vary. For example, if sugar prices drop below the estimated 8¢ per pound, then the value of Free World/Cuba trade in 1964 could be less than $520 million. On the other hand, the value of Free World/Cuba trade in 1964 could be more than $520 million if Free World countries extend large-scale credits to Cuba, or if the Bloc, anxious to break our isolation policy, decides to give foreign exchange to Cuba for purchases in the Free World.

GC

1. Source: Johnson Library, National Security File, Country File, Cuba, Free World Economic Ties with Cuba, 1964. Secret. Drafted by Chase and forwarded to Bundy attached to an “as you requested” covering memorandum of February 26.