CUBAN POSTURE ON ISSUES RELATED TO THE NORMALIZATION OF RELATION

Created: 1/1/1977

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CUBAN POSTURE ON ISSUES RELATED TO THE NORMALIZATION OF RELATIONS WITH THE US

THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL INTELLIGENCE.

THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS, EXCEPT AS NOTED IN THE TEXT, AS FOUOWSi

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contents

KEY

L

Cuban Interesi In ReUliom with the US

Tbe Costs for Castro

Soviet Interests

Cuban Preconditions

Cuban Negotiating Strategy

The Problem of Exile Terrorism

IL THE MAJOR ISSUES FOR

US Trade

Most Favored Nation Status

Control of Cuban Exile

Cessation of

OSTURE ON EXPECTED US

Compensation

Support for Revolutionary

Relationship with the USSR and Nuclear Statu*

Puerto

Human

The Hijacking Agreement

CONCLUSIONS

CUBAN POSTURE ON ISSUES RELATED TO THE NORMALIZATION OF RELATIONS WITH THE US

KEY JUDGMENTS

Normalization of relations would serve Cuba's economic interests and. on balance. Its political interests as well; but moreCastroseeking US acknowledgment of the legitimacy of the Cuban revolution.

Castro is Interested in normalizing relations with the US. but not atprice. He must be able credibly to represent the negotiations as having been arranged essentially on his terms.

While there is some flexibility in Cuba's demand that the US lift trade restrictionsrecondition for negotiation, the Cubans cannot be expected to back down very far. If Castro cannot obtain compliance with the essence of thh precondition, he would probably decide that the cost of normalization is too great.

Cuba's insistence on being dealt with as an equal in negotiations is Intended to convey Its determination not to allow essential elements of its foreign or domestic policies to become issues of negotiation. These would include: Cuba's relationship with the Soviet Union, support of "progressive" governments and revolutionaryand Cuban political prison en.

The Soviets apparently favor normalization of relations, but they do not appear to bo exerting pressure on the Cubans to come to terms with the US.

Another spectacular act of violence by exile terrorists couldajor problem for negotiations.

The Cubans have acknowledged the principle of compensaHon for expropriated property, but will meet US demands for compensation with their own claims for damages caused by US actions. Cuba's ability lo finance anyxtremely limited, and any repayment would probably have to be facilitated by US credits at very favorable terms.

Castro would almost certainly reject any US demands that Cuban troops be withdrawn from Angola and Insist on Cuba's right to provide aid to legitimate governments and movements of national liberation.

nlikely to change Its position on Puerto Ricanbut would probably show some flexibility on thb subject in the context of negotiations.

While the Cubans will probably be willing to discuss certain human rights issuesepatriation of American citizens, reunification of families, emigration, andhey will almost certainly reject any discussion of Cuban political prisoners.

robably willing to renegotiate the annhijscking agreement, but only If the US takes adequate steps to curtail terrorism by Cuban exiles residing in the US.

The Cubans will consider their relationship with the Soviets nonnegotiable, but may be willing to sign the Treaty of Ttaretolco providingatin American nuclear-free zone under certain conditions.

Removal of US restrictions on direct trade with Cuba would satisfy much, if not most, of Cuba's objectives. The remaining Cuban goals (return of Guantanamo, restoration of Most Favored Nation (MFN) status, cessation of overflights)ower priority, and can be negotiatedore leburely pace, from their point of view.

Even If US-Cuban relations are normalized under tbe best of circumstances, they are not likely to be without friction and Castro's fundamental antipathy to US interests in Latin America and elsewhere can be expected to continue.

T

DISCUSSION

BACKGROUND

here li little question that Fidel Castro ud rout other Important figure* In the Cuban leadership would welcome the normallaaBon of relatloni with the US1 Cabas ecoooenic interna would clearly be served by reestabushlng trade and. on balance, normalization would benefit Castro politically as wellS decbion to restore ties may be Castro'i most fundamental objective for pursuingilnee In hb view, it wouldignal to tbe real of Ihe world that tbe US had finally acknowledged the legitimacy of the Cuban revolution.

2 The ettent to whk* Castro eaa actively aaak toimited by his long-held and frequently-expressed precrmdlhoos (removal of trade restrictions, and treatment at an equal) for beginning talks and by strong emotional constraints. In effect. Castro wants tacit acknowledgment by the US that he has prevailed despite US efforts to bring about hb defeat, and be will not take any steps which might be construed as placing him In tbe role of supplicant. Castro and the rest of the Cuban leadership are unalterably convinced that Cuba Is the aggrieved party in the US-Cuba dispute and that the primary responsibility to resolve the problem tests with tbe US. If he can obtain normalised relations only at the price of relinquishing tbe essence of hbhe psychological victory would be denied to him, and he would probably decide that theoo great. Should negotiation! falter. Castro will try to place tbe onus for failure on the US.

he weight of Cuban Interests would favor normalization but certainly not at arty price. Castro Is interested, but not anxious. For him, the greatest benefits of restored relations would be not so much in the arm of ecrwoenic advaatages as in the explicit acceptance by tbe US of the Cohan revolutionait accompli with whichilling to live

1 In contrast to full diplomatic and trade reliUoiu, normaUntloQ at relatloni Impltn the ktnd ol relation Um United Statea hai with Esil European cvuntrtet in whichocord Moil Favored Nation

l The question of fishing rights withinlle economicxcluded from thlt discussion because of its highly technical nature andould be resolved relatively rapidly at the beginning of negotiattonx

Cubon Interest in Rasatkm with mo US

espite the declining effectiveness of US efforts to isolate Castro'i Cuba, the opprobrium directed by tbe US against Cuba for lb support of revolutionary activities else what retains some residual force. The restoration of full diplomatic and trade relations between Cuba and the US wouldymbolic act of considerable Importance, and it would inevitably Influence the policies of other nations toward Cuba, particularly within Latin America and tbe Caribbean where onlyut ofations currently have relations with Havana. Normalization of relations wouldarge measure of respect ability on Castro andonstraint which has helpedumber of other governments arrayed In opposition to Cuba. Maay have tbetr own reaaoni for regarding tbe Co bam with suspicion {eg. Brazil. Nicaragua, tbe Dominican Republic, andome would nonetheless be likely to expand flea and cooperate on rpectftc matters of mutual Interest, even In the absence of formal relations. Costa Rlca'i recent decision to establish consular ties with Caba was probably greatly Influencedeoaf that US attitudes toward Cuba had changedndicative of other changes that would be likely to occur If US-Cuban ties were restored. The effect of normalized Cuban relation* with the US oo countries outside the hemisphere would probably be less marked. Castro's stature In mtenianonal organization* such as the UN and the Nonaligned Movement would be perceptibly enhanced, although he would lose some of hb appealartyr.

uban Interest la seeking normalization has been heightened by economic difficulties as work) sugar prices have plummeted to new kiwielatively short period of extremely high levers. The crunch hasutback of Cuba'i goek in Its five-year development plan (formulated while sugar prices stood at recordt ako has forced renegotiation or deferral of contracted purchases of capital goods from Western countries, despite the availability of lines of credit Tbe proportion of

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countries fell from aboutercent5 to an estimatedercenthe dollar value of this trade has been cut almost in half5 billion5 to0 million. largelyesult of falling sugar prices. Exports will probably stagnate0 nuIRonuba is facing increasing difficulties In marketing sugar in noncom-munist countries, particularly since Japan has shifted much of Its purchases to other suppliers and Spain has become Increasingly self-suffldent Imports from the nonoommunts* countries dropped3 billion50 billion6 and will probably be0 million

Cuba's favorable sugar arrangement with the USSR has previously made It possible to market all of the sugar It has available for export. But exclusion from the US market will make It difficult to find hard currency cratorners for planned expansion of outputarticularly when value of sales to other Western markets are declining. Moreover,ew International Sugar Agreement (ISA) assigns export quotas, sugar prices may rise, but Cuba would encounter even more difficulty In increasing hard currency sales. It would not be able to sell much nonquotaat discountedall the mejot Importers (including tbe US) joined the ISA. Another problem would ariseew US sugar law should reestablish country quotas and exclude Cuba, thus making It more difficult to accommodate sizable Cuban sugar Importsater date without antagonizing other exporting countries whose quotas would necessarily be cut. Cuba would beuch better position If it could sell to the US on an equal basis with other exporters when either the new ISAew US sugar law came Into effect. All things being equal, tbe US might absorb as muchillion tons annually of Cuban sugar, which at current prices would be worth0 mUhon.

On the Import side, tbe US trade embargo has made It more difficult and costly for Cuba to acquire needed capital goods (particularly those involving advanced technology available only from Western suppliers) and certain foodstuffs. This problem hasarge extent been alleviated by the removal of restrictions on trade with other countries and on sales by foreign subsidiaries of USo, certain types of technology are available only in the US. US-made products remain highly regarded ln Cuba, and both proximity aod tradition would favor direct trade by US-bawd firms- if aU-

Commerce Department studyhen sugar prices were aboveestimated that total tradehe sum ofand imports) between the US andillion annually undercondition* (inclucUng MFN status for Cuba).to realize thb fullumber oflegal and political impediments would have toand the value of goods that Cubafrom the US would presumably beany compensation payments for US claims,were granted credits at very favorableactual amount of total trade, at least in thewould probably be considerablyillion figure.

Tha Com for Castro

Restoration of relation* with the US would not be without cost for Cuba. Quite apart from the Issue of US claims, there have been Indications that some Cuban party officials are apprehensive of theS presence on the bland would have on the revolutionary fervor of the Cuban people. They worry about the deleterious Impact that US culture might have on the puritanical unity the Revolution has attempted to Imbue in the younger generation. Military and intelligence officers are also concerned about the security problemS presence and Increased tourism would bring, and reportedly fear that they are unprepared to deal with IL

Others are likely to feel that Cuba bas survived without the US for more thanears, and that renewal of relations would reopen the door to increasing US leverage over Cuba. Castro himself made this point emphaticallypeech onhen he declared thatwe do not depend on them (the US) for. What can they take away from us which they have not already taken away? Nothing. This can be called totalastro has exploited to good effect the Image of little Cuba triumphing in spite of the continuing efforts of the North American Collath. The existenceull panoply of bilateral relation! would restrict somewhat the range of behavior that Castro would permit himself with regard to the US without provoking some undesirable reaction. While there is no evidence of open dissent on this Issue within the Cuban armed forces or Communist Party, Castro must be able credibly to present negotiations to them as having been arranged essentially on hV terms.

Soviei InlOTHllI

be Soviets apparently favor normalization ofut they do not appear to be pressing the Cubans to come to termi with the US. Anwould serve certain Soviet Interests by:

reducing US concern over devetopment* In the Caribbean while leaving tbe Soviet-Cubanand political relationship virtuallyand

openingajor market for Cuban goods, thereby helping to itrengthen Cuba'i economy and eventually diminishing economicon the USSR.

hileo formal treaty Be bef ecu Cuba and the USSR similar lo the mutual defense treaties the Soviet) have with the East European conununtst states,ependent on the Sovietsrelationshipnderscored by Cuba's attendance (as an observer,ember) at Warsaw Pact meetings. Economically Cuba blinked with the Soviet bloc throughIn tbe Council on Economic Mutual Assistance. Neither Moscow nor Cuba would want these relation -ships weakenedondition or result ofof relations with the US.

I bunkering (aal tries. The Sovietsonsider tbo strategic and political value ofoviet preaencc In the Western Hembphere well worth the coat.

Cuban Precondition!

astro's preconditions for beginning official talks are tn essence thai:

tbe US must remove restrictlcns on trade with Cuba, and

Cuba must be dealt with as an equal in negotiations.

The latterntended to convey that the essential elements of lis foreign or domestic policies will not become bsuea of negotiation. These would include Cuba's relationship with tbe Sovietarticularly the militaryts support of "progressive" governments and revolutionaryand Cuban political prisoners

o the extent that the Cubans obtainof their psecondlllonx, they willmuch, if not most, of what tbey wantofficial negotiations bav* even begun.goab {return of Guantanamo andower priority andeisurely* far as the Cubans

he Cubans may bow believe tbe US binterested la following through onand that further Inducements In the form of modifications of Cuba's position on the embargo are no longervert he leaa.robably more flexibility in tfaa Cuban position than appears at first glance. Castro would likely agree to:

Initiate preliminary talks on the nsodairtses of further rsegotUHooj if the US permittedof food and medicines to Cuba, and

negotiate seriously on other bsuea if tbe US agreed to permit direct trade in other nonstrate-gic goods.

The Cubans would probabh/ Insist on an agreetnent la principle to remove all restrictions eventually.

astro's insistence that any negotiations be carried out on the basb of complete equality pointsajor theoretical as well at practical obstacle to tsBfsroving US-Cuban relations. Castro hasrefused to accept what beouble

idel Castro wlQ not be directly Involved ln negrjtiarlons. but he wlQ make all major deextiom. oa Cuban strategy and negotiating poritions and on how the process will be presented to the Cuban public. He will be Influenced by bis brother Raul (representing Ihe interests of the armed forces) and Carlo* Rafael Rodriguez, tbe Vice President of tbe Council of State (who will be esoaety attuned to Soviet views V

The Problem of Exile Terrorism

he unpredictable factor in thb cMlcateb the threat of Cuban exile terrorism In the not unlikely event that exile terrorists succeed In carrying off another spectacular act of violence like the Cubana Alrilnes explosion of last October, Castro will be facedecision of whether to ignore the provocation and accept US assurances of nonlnvolve-ment or to portray It as another evidence of US perfidy Hb decision would depend largely on the climate of discussions and progress achieved and on the prosecution of exile terrorists already under arrest.

lthough Castro has attempted to exploit past US connections with Ihe exile orgsmrxationa forpurposes, hb arxusetiom of US complicity are not entirely for dramatic effect Given hb experiences with Ufrtporrjored operations against hb regime and against himself, be would probably conclude that the US wasUnplscated in the exilenot by direct support, then hy acquiescence and tacit approval. Castro may believe, however, thatwould give the US aa Interest in rettricting exile activities

HE MAJOR JSSUfS FOR NEGOTIATION

he Cubans are Interested ln obtaining aa agreement with the US which would cover both economic and polittco-mllltary Issues. There would appear tolear linkage between the economic Issues to be tabled by bothnd the poUtko-mllitary questions might also be grouped together In discussions. The likely Cuban position on these bsues ts summarized aa follows.

US Trade Restrictions

or discussions to reach the stage of full

standard of international behavior for major and minor power* Thh appear* In:

hb Invocation of the "International principle" that permit! military assurance to friendly countries threatened by thud powers, and

his charges thai the US It guilty of hypocrisy In demanding withdrawal of Cuban troops from Angola.

xtremely sensitive to any nigra Horn thaiess free than the maior powers to pursue its national Interests abroad by military action or by attempting to influence friendly governments or political groups.

he Cubans are likely to reject out of hand any US demands that Cuban troops he withdrawn from Angola and elsewhere, or that Havana provide guarantees against future involvement In soot bem Africa or alee where. Similarly, any attempt to include tbe subject of Cuban political prisoners will almost certainry be metategoric and unyielding refusal

Cuban NaooMating Strote-gy

oastbte that the Cubans would like to diplomatic relations relatively early in tbe negotiating process, leaving other questions such aa US claims for expropriated property to be settledater date. They may calculate that such anwould permit bilateral trade long before any final agreement on the compensation problem had been reached and therefore would not immediately He up earnings from sugar sales in compensation

hile the Cabana are apparently willing to consider US claims, (hoy will present their own Itemized bat of demands These will includefor damages resulting from the trade embargo, US-sponsored raids and sabotage, and Inadequate tax payments by US corporations prior0 The sum wlH probably excesdn adjudicated US claims. Cuba's always limited ability to pay any substantialven leu (ban It wasecaos* of low sugar priors and other economic strains.

he Cubans would probably receivereciprocate US gesture* to Improve theprior to opening official talks, but Iheyexpecled to back down very far on If thai hurdle can he passed, ihey

probably have to be resolved during ihe preliminary talks. The Cuban position on this precondition Is presented in paragraphbove. Tbe compromise envisaged would be based on presidential waiver of restrictions and might leave the legal apparatus of the (rode restrictions intact. The Cubans" ultimate goal would be the removal of all vestiges of the embargo.

Most Povorod Notion Status

ubaember In good standing of thegreement oo Tariffs and Trade (CATTl and in the Cuban view the hi lateral trade agreement with the US signed7 within the CATT framework Is still In effect. Cuba holds that the US has been In violation of CATT since It first suspended MFN treatment of Cuband thai Cuba at therefore still entitled to MFN status Cuban products entering the US at MFN tariff rates wouldompetitive advantage which they would not have If MFN status were denied. Under the US Trade Reform ActFNied to emigration policies and wouldew bilateral trade agreement. Tbeot arceaaarily an impassable obstacle, since both Poland and Romania have been granted MFN status by tbe US. The basic Cuban position therefore would be that Cuban products should enter the US at MFN tariff rate* effectivend that Cuba will reciprocate by extending similar treatment to Imports from the US (Inargely meaningless concession)aflbeck. Cuba might agree toew trade bilateral with the US. but In doing so would argue strenuously that Its emigration policies are sufficiently flexible to qualify under4 Trade Act for MFN status. Acldlhon-oBy. Cuba would soak generalizedeas developed country and member of the Group

Control of Cuban Exile Extremists

he recent escalation of anti-Castro exile terrorism has Increased Cuban concerns aboutexile organisations operating out of the US. Cuba would therefore insert onUS pledge that It would:

not Intervene in Cuban Internal affairs, nor engage ta any aggressive act against Cube, and

not promote, support, or permit aggression against Cuba by exile organizations

la return forproviding there b

lhai thernnlng its

sabotage by ogenb employed by and/ox bated In ihe US: and

inadequate tax payment* by US corporations prior

While il il impossible to estimate the value the Cubans will place on these claims, it will probably initially be some figure that would exceed anticipated USd the rseighborhood ofillionnlikely that the Cubans have any genuineof being able to collect such an amount, but they undoubtedly will regard their daims at serious and will attempt to use them to cancel out US claims (or expropriated property. Cuba will demand tliat the US free all frozen Cuban assets, including accrued Interest There will probably be very little flexibility oo this point, although there may be some question about the actual value of these assets, which weillion The Cubans might be willing to apply them against US daims.

III. POSTURE ON EXPECTED US DEAAANOS

Cuban governmenl is almostUS demands regarding compensationUS properties. Cuban support formovements. Cuba's nuhrery relationshipUSSR and nuclear status, advocacy ofindependence, human rights, and theof the entibijocklng agreement. Tbediscuss Cuba's likely posture on N

Compensation

Tbe Cuban government has acknowledged thr principse of compensation for rationalized properties, but probably considers the nearlybillion total of US adjudicated claims to be an inflated figure. It wiD therefore seek to reduce th* value of US claims as much as possible and balance rhem off against Cuban counterclaims. The Cubans are likely to argue that US claims should be based on the book value of US investments, which the US Departraent of Commerce set at the end0 at6 muUon, orercent of the figure recognixzd by tbe US Claims Settlement Commission

Cube's economic straits caused by theworld price of sugar hove further reduced lb always limited ability to pay compensation for expropriated US property. There is virtually no prospect that Cuba willurrent account surplus to finance compensation. Any repayment would have to be facilitated by US credits granted at very favorable terms. Cuba has Indicated it will not consider Individual daims and would therefore Insistackage settlement to be distributed by the US Government among the claimants.

Support for Revolutionary Movssrnents

Castro and other top Cuban officials certainly understand that further military interventions In Africa or elsewhere wouldharply negative effect on any movement toward normalization They will, however, continue to Insist on Cuba's right to provide military. Internal security, and technical assistance at the request of legitimate governments, and tbey will not abjure aid to other "movements of national

As noted in paragraphsastro would almost certainly reject any US demands to withdraw Cuban troops Irom Angola. At the same time, he would claim that hb troops are being repatriated and replaced by dvilian advisers. The Cubans are likely to counter with demands that tha US reaoiiDoe overt or covert intervention In other countries.nlikely to accept any forreulatioo oo "export of revolution"ro forma statement oo retraining iron mtxafering in th* internal affairs of other countries.

Relationship with tho USSR and Nuclear Status

basrle position will probably be thatwith the Sovietattersovereignty and thereforeubjectwith the US. Cuba will insist that then

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are no Soviet military bates In Cuba, and that the presence of Soviet military personnel visits of Soviet warships, or rrconnaUsance aircraft to the Caribbean region are not proper njbjects for the negotiation*.

Cuban* would probably follow theon the question of nuclearo Indication that they are opposed toution Treaty or regionalatter of principle. Cubabe willing to itgn the Treaty ofmay attempt to tie luoh action to US adherenceI of that accord which would prohibitof nuclear weapon* In Latin America.

Puarto Rico

b virtually no prospect mat CubaIt* basic position In support of PuertoNevertheless, the Cuban*tn the US view, Puerton interna!they realbtkcally do not expect Puerto RicoIndependence except over an extended periodCuba'* promotion of this Issue In the UNInternational forums ha* varied widelyTbe Cuban* madeimited effortformer Presidentroposal ofPuerto Rtoo, and recently Cuba ha*lessIn pushing Puerto in the UN Cosnmlttee of 2* have given Indications that they wouldflexibility on thlt subject, perhaps going so fargive prlvote assurances that they will not pressUN observer status for the Puertonlikely, however, that Havana's tie*group will be severed. Cuba woulddeny any US charge that It supportsterrorists, but might discourage Puertogroups from provocative activitywtth the US.'

Human Right*

he Cubans would probably be willing to dbcuss some issue* under toe general rubric of human rightsepatriation of American citixens, rcunlfi-

FBI hoi Identtftnd lix lr*ORi of it* Puerto Rican SocwrW Party who reWwd nalauig tn Cut* In tahorasf uid when twrortan3 and IBT6 end who havn nrunxdPuerto Rico. TW other member, of the Puerto Rlcen Sodel* Psrty -ere recently eneMed tai pameMaaoundi ol an nplortve odW

of families, emigration, andut any attempt to Include the wbfect of Cuban political prisoners will almost certainly be metategooc and unyielding refusal on grounds that It It so internal matter. Cuban officials have suggested that they might be willing to release some or all of the eight American dnxeru now In prison on political charges tn return for US removal of reatricnoni on sale of food and nwdkinis Tbey might abo agree to releaseood will gesture Arnerican being held on drug smuggling charge*.

n part because restrict lorn on movement of people are linked to US trade preferences. Cuba may be expected to show some Increased flexibility on travel and emigration, perhaps facilitating exit vitas for US citizen* or dual nationals Mil resident In Cuba and relative* of emigres. Cuba may also ease restrictions on ristts from US residents, but fears of rarile activities will probably strictly limit the number of persons admitted for thb purpose. Despite Cuba's refusal to discus* political prisoners and It* official

position that political prisoners do not exist In Cuba,eD aware of the importance attached to thb

issue In the US and might, therefore,imited

number, of people for cosmetic purposes without

linking their release to the negotiations.

The Hqcxstlng Agree-re--

astro has Indicated to recent visitors that3 antAhbacklng agreement will be allowed to lapse on April IS in accordance with hb denunciation of htst October, but he will continue to observe Its provision* mfcarnally As noted above, the Cubans haveillingness to renegotiate the regree-ment, but only In the context of tbe3 treaty, which contains clear responsibilities for the US to dbcounage terrortam by exile* residing In the US.

IV. COLLUSIONS

he process of normalizing US-Cuban relations will be protracted and difficult, and the haunt and rcrultMties involved an highly complex. The term "normallration" may, Ln fact, be somewhatilxtce the two countries' opposing social systems and political philosophies will limit the relationship for many yean lo come. Equallyhe emotional factor which has developed during ixeariyean of hostile relation* and which often tend* to magnify misunderstandings and complicateTheot likely to be without

can be expected to eonnrtue hb oppcaJtlott to US Influence In the hembphera and hb nipfxet of political and loctal revolution In other countries.

d additional (actor limitinghe Sovietf Cuba to further Its own objectives. Tbe USSR would, for tounple. insist on maintaining lb strategic post lice in the Caribbean including bunkering facilities for Soviet submarines at

Qenfuegos, the ScMet-controlled electronicfacilities In Cube, and binding rights forecti nnuisi an ce missions On the otherradual reduction of mistrust could work to strengthen Cube's sense of national confidence over the long term and thereby attenuate Cuba's symbiotic relationship with the Soviet Union If Havana foundeasible.

NOTId

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