The oddest thing about Florida’s new state law to punish foreign companies that do business in Cuba is not that it is an election season gimmick by Republican lawmakers to win Cuban-American votes, nor that it is likely to cost taxpayers a lot before it ends up defeated in the courts. It’s that it would actually help Cuba’s dictatorship.
Before we get into why, let’s look at the facts. The new state law, signed Tuesday by Gov. Rick Scott, prohibits local governments from hiring firms that do business in Cuba or Syria for contracts worth more than $1 million, and forbids Florida state pension funds from investing in these firms.
Drafters of the law tell me there are about 200 foreign companies that could fall into one of these two categories, including Brazil’s Miami-based engineering and construction giant Odebrecht USA, whose parent company has a subsidiary that is upgrading Cuba’s port of Mariel.
In defense of new law
In a telephone interview Wednesday, U.S. Rep. David Rivera (R-Miami), one of the most vocal backers of the new state law, rejected criticism that it is unconstitutional and that it will scare away foreign investments from the state.
Rivera said that the new Florida law does not contradict the constitutional provisions entrusting the federal government — and not the states — to conduct foreign policy, because the new Florida law allegedly refers to the state’s right to manage its public funds and “has nothing to do with foreign policy.”
“The new Florida law does not prevent foreign companies from doing any private sector business in Florida,” Rivera said. “It only says that if companies want to do business with cities or counties or the state of Florida, they have to decide whether they would prefer to do business with a terrorist regime or do business with the state of Florida.”
Rivera also rejected the belief that this state law will be successfully challenged in the courts, saying that there is a precedent whereby federal courts have upheld a Florida law prohibiting Florida universities from using taxpayers’ money to organize trips to countries on the U.S. State Department’s list of terrorist nations, like Cuba.
On the other side of the argument, the Florida Chamber of Commerce and several other pro-business groups are opposing the new law, saying that it will hurt Florida’s business climate and encourage foreign companies to invest in other states.
To my surprise, even some high-profile Cuban-American Republicans, such as J. Antonio “Tony” Villamil, dean of Saint Thomas University’s School of Business and former U.S. Undersecretary of Commerce in the George W. Bush Administration, think that the new law is counter-productive.
‘A black eye on Florida’
Villamil, who also served as Florida director of economic development under former Republican Gov. Jeb Bush, did not mince words: he told me that the new law is “a black eye on Florida.”
“First, this law is unconstitutional, because it violates the federal power to conduct foreign policy, ” he said. “Second, it violates World Trade Organization rules that say that you cannot discriminate against a foreign company and create second-class companies.”
“Third, it hurts Florida’s business climate,” Villamil said. After all these “trade missions that Florida and the governor have taken around the world, including to Brazil, telling foreign companies that we welcome them in Florida, we are excluding them from meaningful state and local contracts.
“And it doesn’t do anything to help the freedom of Cuba,” he said. “It allows Castro to have a propaganda point and say, ‘Look how hostile Cuban exiles are against our country.'”
The boomerang effect
My opinion: The new Florida state law, if enacted, will boomerang on its sponsors for one additional reason. It would encourage other U.S. states to pass foreign policy and trade laws.
That would not only make U.S. foreign policy even more dependent on local constituencies that push for their own economic agendas ahead of the national interest, but would encourage many U.S. states to pass laws giving tax breaks or other special privileges to firms that have affiliated companies doing business in Cuba.
To score points with Cuba’s regime, Iowa, Kansas and other farm states that are eager to increase their already significant exports to Cuba would try to promote their business ties with companies doing business on the island.
Cuba’s octogenarian military rulers would be the biggest winners.
Andres Oppenheimer, is a Latin America correspondent for the Miami Herald, 1 Herald Plaza, Miami, Fla. 33132.