YEAR IN REVIEW: Creating Economic Opportunity for All Americans in 2014

WASHINGTON, DC – President Obama took office in the depths of the worst economic crisis since the Great Depression.  Six years later, thanks to the grit and determination of the American people, and the decisive actions he took early on – to bring the economy back from the brink, to save the auto industry, and to build a new foundation for middle-class growth – we’ve made real progress. 

The economy grew at a combined 4.2% pace in the second and third quarters of this year, the strongest six-month period of growth in more than a decade.  American businesses have added new jobs for 57 consecutive months, the longest streak of private-sector job creation on record, for a total of 10.9 million new jobs. The pickup in the pace of job growth this year has come in industries with higher wages.  And wages across the economy are rising – a very welcome sign for millions of American families.

The U.S. economic recovery took a major step forward in 2014, achieving a number of important milestones:

• Jobs: By November, 2014 was already the best year of job growth since 1999.
• Manufacturing: The manufacturing sector added 15,000 jobs per month, and the average workweek for those workers is the highest since World War II.
• Education: The high school graduation rate is the highest on record, and more Americans are earning post-secondary degrees than ever before – the surest pathway to the middle class.
• Energy:  America is now the number one oil and gas producer in the world.  For the first time in nearly two decades, we produce more oil than we buy from abroad.  And we’ve put tens of thousands of Americans to work harnessing energy from the wind and the sun.  Just last month, President Obama and President Xi jointly announced the two countries’ respective post-2020 climate targets in Beijing – a move that will spark investment and innovation in clean energy technology and represent a substantial opportunity for U.S. companies.
• Housing: The continued rise in home prices has cut the number of underwater mortgages from a peak of 14 million to less than 4 million, and the share of mortgages in delinquency or foreclosure has been cut in half.
• Health Care:  Thanks to the Affordable Care Act, 10 million Americans have gained health insurance in the past year alone. Meanwhile, due in part to reforms in the law, the price of health care has been rising at the slowest rate in nearly 50 years.
• The Deficit: Under the President's leadership, the deficit has been cut by nearly two-thirds as a share of the economy – putting America on a more sound financial footing for our kids and grandkids.

The President pledged that 2014 would be a year of action and he has spent the last 12 months working with Congress where he could and taking action on his own where needed to revitalize the economy. He also worked closely with leaders from businesses, nonprofits, education, and communities to expand opportunity for more American families. These efforts have helped contribute to economic progress in a number of ways. Some critical efforts include:

Supporting Job Creation Through Manufacturing and Exports

Manufacturing job growth doubled this year – to about 15,000 jobs per month compared to 7,000 jobs per month last year. In total, since February 2010, the United States has directly added 764,000 manufacturing jobs, with the sector expanding employment at its fastest rate in nearly two decades. And the United States’ renewed competitiveness in manufacturing is bringing production back, with 54 percent of U.S.-based manufacturers surveyed by the Boston Consulting Group actively considering bringing production back from China to the United States, up from 37 percent only 18 months prior. The Administration has helped support these efforts by taking steps including:

• Launching New Hubs as Part of a National Network for Manufacturing Innovation: President Obama has taken action to launch four more manufacturing innovation institute competitions this year, fulfilling his State of the Union pledge, for a total of eight institutes – representing more than $1 billion of public-private investment – underway, passing the halfway mark on his initial goal of 15 institutes. Each manufacturing institute serves as a regional hub, bridging the gap between applied research and product development by bringing together companies, universities and community colleges, training institutions, and Federal agencies to co-invest in technology areas that lead to new, advanced manufacturing capabilities—and the high-paying jobs that come with them—in the United States. And just this week, a bipartisan coalition of legislators passed the Revitalize American Manufacturing and Innovation Act of 2013 (RAMI) to formally launch the President’s vision for a national network linking the institutes.
• Supporting Efforts to Foster Manufacturing Entrepreneurship and Investment in the United States: The Administration helped convene more than 90 mayors who are offering manufacturing entrepreneurs more opportunities to start and grow their businesses, while it also took steps to assist entrepreneurs with securing access to more than $5 billion dollars-worth of cutting edge equipment from the private sector to help start businesses. In addition, the President hosted the first-ever White House Maker Faire to celebrate home-grown manufacturing entrepreneurship and new tools that lower the cost of prototyping.    
• Growing Our Investments in Advanced Manufacturing Research: To keep America’s manufacturers on the cutting edge, the Administration has increased Federal investments in advanced manufacturing research and development to nearly $2 billion, up over 34 percent from $1.4 billion in 2011.              
• Another Year of Record-Breaking Exports: U.S. exports of goods and services through the third quarter of 2014 have increased by 3 percent from 2013, putting us on pace for a fifth consecutive year of record exports. Industries driving this growth include automotive vehicles and parts, petroleum products, and consumer goods as well as services exports, such as travel and tourism and financial services. The services export surplus continued to widen in 2014 to more than $176 billion through the first three quarters, up from $168.6 billion through the similar period in 2013.
  • The Made in Rural America Initiative Leads to a Boost in Small Rural Manufacturing Exports and Other Companies: U.S. agricultural exports reached a record $152.5 billion in fiscal year 2014, surpassing last year’s $144 billion. President Obama’s Made in Rural America Initiative, launched in February, convened a summer “Rural Opportunity Investment” conference and hosted six major regional forums and other rural-focused events, providing enhanced export-related assistance and information to more than 1,000 attendees.
  • Intensifying and Broadening Our Export Promotion: In April, the Administration unveiled plans to open new Foreign Commercial Service offices in Angola, Ethiopia, Mozambique, Tanzania, Tunisia, China, and Burma – expanding the Commerce Department’s presence in 78 countries worldwide. The Commerce Department led and certified about 640 companies on 47 trade missions in 2014, up from 490 companies on 44 missions in 2013.
  • The Advocacy Center at the Department of Commerce Enjoyed a Record-Breaking Year in Helping U.S. Firms Win Contracts Abroad to Create Jobs at Home: The Advocacy Center coordinates federal government advocacy for U.S. firms vying with foreign companies for government procurements overseas. In fiscal year 2014, Advocacy Center clients signed a record 90 international procurement contracts, a 50 percent increase from fiscal year 2013. Of the $134 billion in Advocacy Center deal wins, $80 billion was U.S. export content, supporting nearly 400,000 American jobs. Nearly 20 percent of the Advocacy Center’s 2014 wins were small and medium-sized U.S. companies.

Taking Action to Raise the Minimum Wage

Following President Obama’s call on Congress to raise the national minimum wage to $10.10, states, cities and counties, and business leaders have taken action on their own to increase wages across the country. And on February 12, President Obama signed Executive Order 13658, requiring that workers on new Federal contracts be paid $10.10 an hour.

• 14 States Passed Minimum Wage Increases – and 7 Million Workers Are Set to Benefit From Increases Passed Since the President’s Initial Call in 2013: 14 states passed an increase in the minimum wage this year. According to estimates from the Council of Economic Advisers (CEA), about 7 million workers will benefit from increases in the minimum wage that have passed in 17 states and D.C. since the President made his initial call to raise the wage in the 2013 State of the Union.  
• Cities and Counties Have Also Taken Steps to Raise Wages: Cities like San Francisco, Chicago and Philadelphia have taken action to raise wages for either all local residents or city contractors.
• Businesses – Both Large and Small – Are Taking Action: Since the beginning of the year, large companies like Gap Inc., Disney, and IKEA as well as small businesses across the country have announced increases to their starting wages. For example, Gap Inc.’s increase in its starting wage to $10 an hour by next year will benefit 65,000 workers – and has already helped increase applicants for new positions by 10 percent.
• President Obama’s Action will Ensure that All Employees of Federal Contractors are Paid at Least $10.10 an Hour: Under Executive Order 13658, all new Federal contracts signed after January 1, 2015 will include a provision requiring a minimum wage of at least $10.10 an hour, which will eventually increase pay for hundreds of thousands of workers over time.

Supporting Job Skills and Employment Opportunities

Working with Congress, businesses, states and cities and non-profits, the President has taken action to make sure our job-training system is preparing and connecting Americans to the jobs that employers are looking to fill. From an across-the-board review of our job-training system to new grants that support apprenticeships and help connect the long-term unemployed to work, the President and his Administration have used every tool available to train Americans with the skills they need, and connect them with businesses that are looking for skilled workers.

• Reforming Our Job-Training System to Make It Demand Driven: Following a Presidential Memorandum signed by the President in January, the Vice President led a review of our job training system designed to make our Federal employment and training programs more focused on preparing workers for jobs in high-demand sectors. Working together, agencies with employment and training programs developed a job-driven training checklist that is designed to ensure that programs fulfill this purpose – and will be applied to grant programs across all agencies. For example, training for vocational rehabilitation counselors now includes training in employer engagement and use of labor market information to identify in-demand fields.
• Passage of the Workforce Innovation and Opportunity Act: President Obama signed into law the bipartisan Workforce Innovation and Opportunity Act, which included reforms that the Vice President’s job-driven review had deemed essential, including measuring employment outcomes across all programs, including new measures that illustrate how effectively the workforce system is serving businesses, and requiring training provider scorecards to make it easier for jobseekers to select training programs based on their past results.
• Getting Long-Term Unemployed Americans Back to Work: President Obama issued a three-part call to action – to employers, to communities across the country, and to federal agencies – to help Americans who are out of work, including the long-term unemployed, find jobs or get the skills they need so they can succeed in the labor force. Since that call to action, long-term unemployment has declined by 1.1 million and progress has been made on all three fronts, including:
  • $170 million in grants awarded in October to programs in 20 states and Puerto Rico to partnerships between non-profits, local government, and employers to train and match long-term unemployed job seekers for in-demand jobs.
  • A new set of best practices for hiring and recruiting the long-term unemployed signed by over 200 businesses – including 80 of the nation’s largest companies – to ensure that these candidates receive a fair shot during the hiring process.
  • Toolkits created by Deloitte Consulting in partnership with the Rockefeller Foundation and with the input of about 100 White House Best Practice signatories to help more employers implement the best practices.
  • Finally, following up on a Presidential Memorandum issued in January, the Office of Personnel Management (OPM) issued guidance to Federal agencies to ensure that individuals who are unemployed or have faced financial difficulties because of circumstances like job loss receive fair treatment and consideration for employment by Federal agencies.
• $450 Million in Grants to Nearly 270 Community Colleges Partnering with More than 400 Employers Nationally: In September, the Administration announced the winners of $450 million in job-driven training grants going to nearly 270 community colleges across the country. Administered jointly by the Department of Labor and Department of Education, the grants provide community colleges and other eligible institutions of higher education with funds to partner with employers to expand and improve their ability to deliver education and career training programs that will help job seekers get the skills they need for in-demand jobs in industries like information technology, health care, energy, and advanced manufacturing.
• Investing in a Competitive Workforce Through Apprenticeships: The Administration has launched a $100 million American Apprenticeship Grants competition, administered by the Department of Labor, to help more workers and employers access this evidence-based training method, and is working with the private sector and states and cities to expand access to apprenticeships, which provide a pathway to good jobs in high-demand fields. 

Providing High-Quality Education to America’s Students

Ensuring that all Americans are prepared for the jobs of the future and strengthening middle-class security, starts with a strong education system.  The President has taken a number of steps over the past year to expand access to high-quality early childhood education, connect every student to high-speed Internet, and make college more affordable.

• Committing to Affordable Higher Education: In August 2013, President Obama committed to making college more affordable for all Americans during a major speech at the State University of New York Buffalo.  He explained that while a great education is more important than ever, too many students are facing the difficult choice between risking the inability to pay off student loans or forgoing college and suffering reduced lifetime earnings.  This year, the President made significant progress in alleviating this burden for millions of families, graduates, and low-income students.
  • Expanding Pay As You Earn (PAYE): This year the President took action to ensure that – building on past progress made under this Administration -- everyone with a direct student loan can cap their loan payments at 10 percent of their income. For students that need to borrow to finance college, PAYE provides an important assurance that student loan debt will remain manageable.  Because the PAYE plan is based in part on a borrower’s income after leaving school, it shares with students the risk of taking on debt to invest in higher education.  Today an additional 5 million federal student loan borrowers have the opportunity to benefit from PAYE.
  • The President and First Lady’s Call to Action on College Opportunity: The White House hosted a second College Opportunity Summit on December 4, 2014.  This second Summit generated over 600 actions by colleges, universities, and the private sector to improve outcomes for college students, including over 100,000 additional high school graduates prepared for college and hundreds of thousands of additional college graduates.  
  • Protecting Students from Unaffordable Debts at Career College Programs:  The Administration believes that career colleges play an important role in the higher education system.  But too many hard-working students suffer from poor job opportunities and high levels of debt.  That’s why the Administration finalized critical gainful employment regulations that hold career training programs accountable for putting their students on the path to success.  The new rules will ensure that career colleges do not leave student with loans they cannot afford to repay. Due to these regulations, 1,400 programs serving 840,000 students will improve the outcomes for their students-- or lose access to federal student aid.
• Committing to Early Education: Throughout 2013 and 2014, the President challenged states, business leaders, and Congress to help more children gain access to the early education they need to succeed in school and in life.  On December 10, 2014, the President convened philanthropists, educators, community leaders and others to announce a collective investment of over $1 billion for early childhood education.  Federal commitments of $750 million will support early learning for over 63,000 children while corporate and philanthropic leaders’ independent commitments of $330 million will expand the reach and enhance the quality for thousands more.
• ConnectED to the Future:  In June 2013, President Obama visited Mooresville, NC to announce the ConnectED Initiative, which aims to ensure 99% of American students will have access to next-generation broadband in the classroom by 2017, and called for private sector leaders and the FCC To help connect our students. Since that time, the FCC has taken steps to modernize the E-rate program to support high-speed connectivity for America’s schools and libraries, providing a $2 billion down payment and passing a proposal that provides recourses needed to meet the President’s ConnectED goals.  Additionally, private-sector companies have committed more than $2 billion in resources to schools to supplement federal actions and help support cutting-edge technologies across a greater number of schools and homes. On November 19, 2014, The President hosted school leaders and educators to push this effort forward and make all schools “Future Ready”.  More than 1,200 superintendents joined the Administrations Future Ready District Pledge to set a vision for digital learning across America.  Combined, this pledge will already reach 10 million students across 16,000 schools.  

Statement by the President on the Ukraine Freedom Support Act

Today, I have signed H.R. 5859, the Ukraine Freedom Support Act of 2014, into law. Signing this legislation does not signal a change in the Administration’s sanctions policy, which we have carefully calibrated in accordance with developments on the ground and coordinated with our allies and partners.  At this time, the Administration does not intend to impose sanctions under this law, but the Act gives the Administration additional authorities that could be utilized, if circumstances warranted.

My Administration will continue to work closely with allies and partners in Europe and internationally to respond to developments in Ukraine and will continue to review and calibrate our sanctions to respond to Russia's actions. We again call on Russia to end its occupation and attempted annexation of Crimea, cease support to separatists in eastern Ukraine, and implement the obligations it signed up to under the Minsk agreements.

As I have said many times, our goal is to promote a diplomatic solution that provides a lasting resolution to the conflict and helps to promote growth and stability in Ukraine and regionally, including in Russia.  In this context, we continue to call on Russia's leadership to implement the Minsk agreements and to reach a lasting and comprehensive resolution to the conflict which respects Ukraine’s sovereignty and territorial integrity.  We remain prepared to roll back sanctions should Russia take the necessary steps.

Press Briefing by Press Secretary Josh Earnest, 12/17/2014

James S. Brady Press Briefing Room

See below for a follow up to a question (marked with an asterisk) posed in the briefing.

*On Tuesday afternoon, the President spoke with President Castro via telephone. 

2:08 P.M. EST

MR. EARNEST:  Good afternoon, everybody.  It’s a pleasure to be standing before you on what is a genuinely historic day here at the White House.  We’re starting a little late in order to give Mr. Gross an opportunity to make his appearance and complete his remarks.  And I had the opportunity to see those remarks, and I’ll just say that on behalf of everybody here at the White House, we certainly are pleased that he is home here today.

So with that --

Q    Wow.  (Laughter.)  Dramatic entrance. 

MR. EARNEST:  That was quite an entrance.

Q    You have a problem with it?  (Laughter.)

MR. EARNEST:  Not at all.  Not at all.  Jim, would you like to go ahead and get us started?  (Laughter.)

Q    On the issue of Cuba and opening Cuban relations, Senator Rubio and others are already saying that Congress will not appropriate money to set up an embassy in Havana and that the Senate will not confirm a U.S. ambassador to Cuba.  Is the President confident he can overcome these kinds of obstacles to achieve this kind of historic shift?

MR. EARNEST:  I guess my first reaction is that as a point of fact, it’s not clear to me that additional appropriations will be necessary to establish an embassy in Cuba, principally because there is already a significant diplomatic presence in Cuba.  There is an Interests Section there that represents the interests of the United States.  So I don’t know of any specific appropriations request that has been made; there may be one in the future, we’ll see.

As it relates to support in Congress, I have seen the comments of some who have been critical of this decision.  I think the President acknowledged there would be some who do not agree with his decision.  At the same time, there are many in Congress, both Democrats and Republicans, who are strongly supportive of this decision.  Let me just read you the comments of Senator Flake.  I single him out because he is among the Republicans in the United States Senate who happens to support the President’s policy.  Senator Flake said, “I’ve been in Congress in the House and Senate for 14 years now.  All 14 of those years, I pushed to lift the travel ban and to normalize relations.  I think our policy has done more to keep the Castros in power than anything, so it’s high time for a change -- 50 years is long enough.”  That certainly is consistent with the sentiment that the President expressed today.  I think it is a common-sense position that I think is also strongly supported by the vast majority of the American public.

Q    But doesn’t Senator Flake illustrate the issue?  He’s been trying to do this for quite some time and has not been able to.  So can the President count on actual change in attitudes in Congress?

MR. EARNEST:  Well, I guess based on the math here revealed by Senator Flake, it sounds like he entered the United States Congress at the beginning of the Bush administration.  President Bush obviously did not support making this policy change, and President Obama ran for office in 2008 vowing to address Cuba policy that, for more than five decades, has failed to bring about the kind of results that are in the best interest of American national security.

So the President has long sought to make this change, and the chief impediment to his ability to make that change was the unjust detention of Mr. Gross.  And because he was released today on humanitarian grounds, because through the work of this administration we were able to secure that release on humanitarian grounds, we removed the impediment to being able to implement some of these policy changes that the President clearly believes are in the best interest of this country, they’re in the best interest of our economy, and they’re in the best interest of our national security.

Q    Can you clarify a little bit about how this intelligence asset, this gentleman who has been in prison for 20 years, how he helped in the prosecution and investigations of Ana Montes and the Myers, Kendall Myers and Gwendolyn Myers?  Given that their arrest didn’t occur until 2001 and 2009, respectively, how was he able to do this -- from prison?  Or was this information he had supplied before?  Can you shed some light on that?

MR. EARNEST:  Well, what I can tell -- Jim, there’s not a whole lot that I can share about this high-priority intelligence asset that has been in Cuban custody for nearly 20 years now and is back -- or is now on American soil. 

I can tell you that he provided valuable intelligence and valuable counter-intelligence, that he did provide information about Americans who were sharing information with the Cuban regime.  And because of his efforts and because of information that he shared, it led to the discovery and conviction of a couple of these Americans who were spying for the Cubans.

We also know that he provided valuable intelligence to help us uncover the Wasp Network that was essentially a Cuban-run intelligence network in south Florida.  And the kind of spy swap that was executed today, essentially trading some members of that Wasp Network in exchange for this highly valued intelligence asset in Cuba is consistent with the kinds of spy swaps that have been executed by many Presidents, not just over decades but over centuries. 

And we certainly are pleased that we’re able to bring that highly valued intelligence asset, an individual who is a legitimate hero, to American soil.

Q    But you don’t know when it was that he provided this information that led to those particular cases?

MR. EARNEST:  I’m obviously not in a position to provide a lot of clarity about the clandestine efforts of this intelligence asset.

Q    And lastly, can you talk about the relationship between Rajiv Shah’s departure from USAID and this decision to open up relations with Cuba?

MR. EARNEST:  There is no relationship at all.  I know that Administrator Shah is someone who has served this administration for nearly five years now in the role as the administrator of USAID.  He is a very talented young man who has had an opportunity to use his expertise, both in medicine but also his background in development, to run that agency and to take on some very significant responsibilities.  And whether it was the success that we had in terms of making a contribution to the efforts to rebuild after the Haiti earthquake, to even putting personnel on the ground to try and stop this Ebola outbreak in its tracks in West Africa, that he has presided over a tenure at USAID that has been remarkably challenging, but he has been remarkably effective.  And we certainly are incredibly grateful for his service.

I understand that the transition that was announced today is one that had been in the works for quite some time now.

Q    But as you know, the Cuban government has not been happy with USAID programs in Cuba.  The juxtaposition of the two does raise questions.  If he didn’t want those questions raised, couldn’t one have been delayed?

MR. EARNEST:  That’s why I’m trying to answer the questions, is to make clear exactly what is happening.  I guess the other data point that I can provide to you is that the USAID programs that have been in place and that have drawn the criticism of the Cuban regime will continue even after Dr. Shah transitions out of his current job.

Steve.

Q    Josh, does the President envision a visit to Havana?

MR. EARNEST:  There is nothing on the schedule right now.  The President did hint that there will be senior government officials who will carry out the kind of work that’s indicative of two nations that are seeking to normalize their relations, so I certainly wouldn’t rule out a presidential visit, but I don’t have anything to announce at this point.

Q    Okay.  He would like to go, though?  He would like to go?

MR. EARNEST:  Well, I assume, like many Americans, he has seen that Cuba is a place where they have a beautiful climate and a lot of fun things to do.  (Laughter.)  So if there’s an opportunity for the President to visit, I’m sure he wouldn’t turn it down.  How about that?

Q    One of the points that Senator Rubio made is that the White House has conceded everything but gained little.  What has the White House gained?  What has the United States gained from this deal?

MR. EARNEST:  Well, there are many things, so I’ll go through them.  The first is, we secured the humanitarian release of Mr. Gross.  That’s something that we have long sought.  He was held unjustifiably by the Cubans for more than five years.  His release is long overdue.  And we are pleased to see that the Cubans have granted him his humanitarian release.

The second thing is we have secured an agreement to essentially swap spies, and we recovered a highly valued intelligence asset, probably the most highly valued intelligence asset on Cuban soil in American history.  And that individual is now on American soil.

What we have also done is we have removed what had previously been the chief impediment to our ability to implement the kind of changes and reforms in our policy that the President believes is clearly in the best interest of the country.  And now that Mr. Gross has been returned, we can now better orient our foreign policy and our policy toward Cuba in a way that better reflects our values, that empowers the Cuban people, that will expand economic opportunity for American businesses and American farmers in particular here in the United States.

So we certainly are pleased with the progress that we’ve made here.  The President has been clear that he does not anticipate that we’re going to see the kinds of changes that we’d like to see overnight.  But after more than five decades of a policy in place that didn’t appear to lead to any changes at all that were in our favor, we certainly are optimistic -- very optimistic -- about the new strategy that we’re putting in place that will better serve American interests, that will better empower the Cuban people, that will seek to engage Cuba in a way that will no longer allow our failed policy against Cuba to be such a distraction. 

Some of you have traveled with the President to previous Summit of the Americas conferences, for one example.  This is often a contentious debate that’s held in the context of these summits about whether or not the United States has the right policy on Cuba.  Now that that policy has been changed, we hope that we’re going to foster a greater debate about whether or not the Cuban government has the right policy when it comes to their own people, and whether or not they’re going to continue to get away with trampling the basic human and political rights that the United States has long championed.  And we look forward to that opportunity.

Q    So there’s no guarantees that this deal will result in Cuba making the economic and political reforms?

MR. EARNEST:  Well, we have seen Cuba start to make some preliminary steps towards economic reforms.  And you’ve seen statements today from the American Farm Bureau, from the Chamber of Commerce, indicating that they are optimistic that the changes that the President announced today will lead to substantial economic reforms.  That will not just be good for the United States, that will also be good for the people of Cuba and will better empower the people of Cuba.  And I think that’s what you call a win-win.

Jim.

Q    Josh, but this is all temporary, right?  If you don’t get rid of the embargo, if you don’t get rid of the travel ban while President Obama is in office, a future Republican President, or potentially Democratic President, could come in, close the embassy and put these travel restrictions back in place.  Fair enough?

MR. EARNEST:  I guess as a legal matter that is true.  I suspect, however, it’s hard to imagine that anyone is going to campaign for this office by saying, you know that policy that we had in place for more than five decades and didn’t do anything -- we should go back to doing that.

Q    Jeb Bush is saying he’s against this policy shift that the President announced today.

MR. EARNEST:  I recognize that that may be popular with some very committed individuals that do have principled views on this.  I certainly respect their views.  But I do think that any cold-eyed assessment of the success of the policy that has been in place for more than five decades to isolate Cuba would acknowledge that that policy didn’t succeed.  Since that policy has been in place, the Castro regime has remained in place.  Since that policy has been in place, the Castro regime has continued to trample the basic human rights of the Cuban people. 

It's time for a change.  And there is plenty of reason to believe that the kinds of changes that the President announced today will lead to the kinds of economic and social reforms that will be good for the people of Cuba and will be good for the United States of America.

Q    Does he think he can get the embargo lifted by the time he leaves office?

MR. EARNEST:  We certainly would like to see that.  There’s bipartisan support for it.  But that will require some work.  We’ll have to see. 

Q    I wanted to ask you about the outgoing Senate Foreign Relations Committee Chairman, Bob Menendez.  He had been a fierce opponent -- Cuban American -- fierce opponent of these kinds of changes, a big supporter of the embargo.  Did his departure, or his soon-to-be departure from that position as chair of that committee have anything to do with the timing of this announcement?

MR. EARNEST:  The only impact on timing here was the humanitarian release of Mr. Gross.  This is a policy change that this administration had long sought.  And after securing the humanitarian release of Mr. Gross, we’re able to remove the impediment to the implementation of these policy changes that the President believes is more consistent with our broader national security priorities and more consistent with a policy that’s focused on expanding economic opportunity in this country.

Q    And can you talk at all about the conversation the President had with Alan Gross?

MR. EARNEST:  No, I do know that the President earlier today, while Mr. Gross was on the airplane, had the opportunity to take a phone call from the President.  And I don’t have the details on that phone conversation, but I know that the President was very pleased with having the opportunity to speak briefly with Mr. Gross.  As I mentioned at the top of this briefing, the President, like everybody else here at the White House today, is very pleased to welcome Mr. Gross home.

Q    And are you worried about the -- my last thing on this.  Are you worried that Americans may get the wrong idea about what you’ve announced today?  Because with the embargo in place, Americans cannot go on Orbitz and book a flight to Havana.  They’re not going to be able to go to the cigar shop down the street and buy Cuban cigars.  There is still all of these cumbersome restrictions in place.  So by and large, how much has changed really that Americans can see and touch and feel besides the opening of an embassy in a building that is really already there in Havana? 

MR. EARNEST:  What this will do, Jim, is this will -- this represents a fundamental shift in American foreign policy.  One from isolation that for more than five decades has failed to yield any sort of tangible result that benefits the American people, that benefits the Cuban people, or that benefits the American national security interests.

But because the policy that the President has now announced, we will see greater economic engagement between the United States and Cuba.  And again, this seems like as good of a time as any to read from part of the statement that was issued by the United States Chamber of Commerce today.  They certainly believe that it will have a tangible impact on the U.S. economy in a way that the American people will feel.  They said, “The U.S. business community welcomes today’s announcement and has long supported many of the economic provisions the President touched on in his remarks.  We deeply believe that an open dialogue and commercial exchange between the United States and Cuban private sectors will bring shared benefits.  And the steps announced today by the President will go a long way in allowing opportunities for free enterprise to flourish.”  That is an indication that there is a clear economic benefit associated with the policy decision that the President announced today.

The other strategic objective that has been accomplished here is no longer will the U.S. policy toward Cuba serve as such a distraction in our relations with communities -- with countries throughout the Western hemisphere.  So often when we go to these other events or have engaged in dialogue with other countries in the Western hemisphere, they say, well, let’s talk about your policy towards Cuba.  No longer will they have to raise that objection.  Now we can go to them and say, let’s go talk about your policy toward Cuba and the policy of the Cuban government toward their own people.  And that, ultimately, better serves our objective.  That it shouldn’t be about isolation, it should be about engagement and openness.  And that’s more likely to lead to the kind of strategic accomplishments that the President believes serves our national interest.

Q    When the Castro government starts rounding up political prisoners again, do you have to re-examine what --

MR. EARNEST:  They’ve been doing that for more than 50 years.  And we’re going to continue to use this openness and this engagement to focus pressure on the Castro regime, to live up -- or at least to respect if not protect the basic fundamental human and political rights that this country has long championed.

Alexis.

Q    Josh, two questions.  One is, can you elaborate on the telecommunications and Internet changes and progress that the United States believes it has worked out with the Castro government?  And I ask that in particular because we know that in China, for instance, there have been efforts to block that for the people in China.  And I just wondered, what is the President’s understanding about what the Cuban people will have access to?

MR. EARNEST:  Well, I may have to take some of the more technical aspects of your question, but I think as a general matter, this is consistent with the kind of strategy that the President is pursuing here; that we want to facilitate more openness in our relationship between the United States and Cuba.  And by facilitating that openness, we do principally one thing, which is empower the Cuban people.

For so long, this policy of isolation that has been in place for more than five decades has only added to the burden that the Cuban people have had to bear.  But by making these kinds of changes and allowing for more U.S. telecommunications equipment to be sold and put into use in Cuba, we can give the Cuban people more access to information in a way that will empower them to have potentially more say on the economy and on their government.  And that is certainly consistent with this philosophy that our policy of isolation has failed.  It’s time for us to pursue a policy of openness and engagement.

Q    The second question I had was about Americans who may be imprisoned around the world.  Do you have a status report on how many Americans of whatever disposition or work are imprisoned currently around the world, and whether the President is doing everything -- is in his gain to try to release as many of them as possible in the next two years?

MR. EARNEST:  Well, I’d refer you to the State Department for any sort of list.  If anybody has a list like that, it would be them.  I don’t know if they do, but you can certainly check with them.

But the President I think on a number of occasions, and this is just the latest one, has demonstrated his commitment and demonstrated a tenacity to securing the release of Americans who are unjustifiably detained overseas.

Cheryl.

Q    The President today was talking about easing exports, but how much authority does the administration have to ease both import and export bans?  Or do you need legislation for that?

MR. EARNEST:  The President did take steps today to ease restrictions on exports.  And there are substantial steps that the President can take using his executive authority to relax some of the restrictions that were in place in a way that would facilitate greater trade and greater economic activity between the United States and Cuba. 

But for details about the questions that you’re asking, I think I would actually refer you to the Treasury Department that’s responsible for administering those restrictions.

Q    But he’s going to also pursue legislation --

MR. EARNEST:  Yes, the President does believe that these -- what the President has done is he has used all of the executive authority that he has to try to take away some of these restrictions.  Some of these restrictions remain in place; Mr. Acosta alluded to a couple of them related to travel.  And we do believe that Congress should take the necessary action to remove those restrictions as well, again, to facilitate the kind of openness and engagement that we believe will lead to greater progress in terms of advancing American national security priorities.

Q    And that’s why -- any timelines?  I mean, how soon can we start to see some of these export restrictions lifted?

MR. EARNEST:  Well, the President is certainly eager to see these changes be put into place.  So I’d refer you to both Treasury and Commerce who can walk you through the details.

Major.

Q    Senator Bob Corker will be the new Chairman of the Foreign Relations Committee when the new Congress convenes.  He said just a few moments ago, “There is no real understanding as to what changes the Cuban government is prepared to make.”  What is this administration’s understandings of the commitments the Cuban government is prepared to make in reaction to many things it has long sought from this administration, which it has now received?

MR. EARNEST:  Well, they’ve already made commitments to do three things that, again, over the course of more than five decades, it had been reluctant to do. 

The first is, the Cuban government, based on their own assessment and at the urging of the United States, did release more than 50 political prisoners.  Some of them have already been released, some of them will be released in coming days.  And that is certainly a welcome development.  These are names that were provided by the U.S. government to the Cubans, and we urged them to be released.  And that’s what they did.

The second thing is -- and this is what Alexis referred to -- is they agreed to allow the import and installation and use of American telecommunications equipment that would give the Cuban people access to more information. 

And third, we saw the Cuban government commit to greater engagement with the United Nations and with the International Committee of the Red Cross.  These are two international, multilateral organizations that champion the kinds of values that we’ve been urging the Castro regime to respect for some time. 

So again, when we’re sort of evaluating the success of these efforts, these are three specific things that the Castro regime has committed to that, after 50 years, or more than 50 years of refusing to do so. 

Q    And to those who would say there’s no commitment to free elections, there’s no commitment to a free press, and there is no promise to end systematic political repression in the country, you would say what?

MR. EARNEST:  I would say that there was no evidence that they were more likely to do those things after the 53 or so years that this embargo has been in place.  We do think that by putting in place a policy that allows for more openness and engagement, a policy that will empower the Cuban people, that there will be more pressure on the Cuban regime brought to bear to force them to better respect the basic political and human rights of their people.

Q    And you alluded to the possibility, somewhat humorously, of the President going to Cuba.  But just to bear down on it a little bit, he would not go there now with the political repression that exists in Cuba.  He would not want to go there under these current circumstances, would he?

MR. EARNEST:  Keep in mind, Major, a month ago we were both in Beijing.  Right?

Q    So he would.

MR. EARNEST:  Well, all I’m saying is that it is not unprecedented for us to go places and interact with countries with whom we have a very fundamental difference of opinion about that country’s treatment of their citizens.

A day after we were in Beijing, we traveled to Burma -- again, a country that does not have a stellar record when it comes to respecting basic human and political rights.  But we engage those countries and we engage the leadership of those countries, and we do so for a variety of reasons.  Sometimes, and often, it serves our national security interests to do so, but also because it’s consistent with the President’s view that by engaging with the leaders of these countries and by engaging with the people of these countries, we can facilitate more respect for basic human rights.

Q    The most recent congressional action dealing with Cuba is the Helms-Burton Act in 1996.  It dramatically intensified the trade embargo and also placed limitations on foreign countries interacting with Cuba.  President Clinton signed that into law.  Was there any interaction between the President or anyone senior in this administration with those Clinton administration officials or President Clinton himself about this very historic change in policy?

MR. EARNEST:  It’s my understanding about the Helms-Burton Act that what it actually did was it took some of the executive actions that had been taken toward putting restrictions on trade and travel in place, and actually codifying them statutorily.  So that is part of what leads us to the need for Congress to take action to repeal some of those restrictions.  So we certainly call on them to do so.

As it relates to your specific question on President Clinton, I know that there have been some consultations with former President Clinton, but I haven't seen a statement that he has put out on this yet.

Q    And the President and -- the two Presidents?

MR. EARNEST:  I often am reluctant to talk about specific conversations that take place between the President and former President Clinton.

Q    (Inaudible.)

MR. EARNEST:  Well, I’m not going to confirm those kinds of conversations.  But I know that there have been conversations between the White House and President Clinton on this specific issue.

Q    Do you seek to enlist President Clinton’s support in this policy and reversing some of the things that he himself signed into law?

MR. EARNEST:  We certainly would welcome the support of President Clinton and anybody else that wants to be supportive of changing a policy that for more than 50 years did not yield results that are beneficial to our national security, and putting in place a different strategy that’s focused on engagement and openness that we believe will empower the Cuban people, expand economic opportunity for American businesses and farmers, and better serve the national security interests of the United States of America. 

Jon.

Q    I’m trying to get at the underlying principle here.  You’ve said that the policy of putting economic pressure on Cuba, isolating Cuba, failed to change Cuba’s bad behavior, and a policy of economic engagement and openness will have the better prospect of changing Cuba’s bad behavior, correct?

MR. EARNEST:  Well, it certainly seems unlikely that it’s going to be worse than a policy that was in place for more than five decades and didn’t yield any tangible change.

Q    Okay.  So explain to me why you think a policy of economic pressure and isolation towards Russia would change Russia’s bad behavior when you say that that very approach to Cuba has utterly failed for more than 50 years?

MR. EARNEST:  This is a timely discussion, so I’m pleased that we’re going to have a chance to talk about it.  We have spent some time talking about this today.  And here’s what I think is the principal difference.  And again, for two days in a row I’m going to violate what is often a core principle about comparing our policies as it relates to very different countries in very different situations.  But I do think this serves as a useful illustration.

In talking about the sanctions regime that we put in place, both against Russia and Iran, we have said the success of that sanctions regime is dependent on our ability to work with our partners and allies around the globe to implement the regime in a coordinated fashion to maximize the pressure on those countries.  And what we saw was we saw that the pressure that was placed on the Iranian economy did yield political pressure that has changed the perspective of the Iranian regime at least as it relates to their willingness to have a discussion with the international community about their nuclear program.

When it comes to Russia, again, we acted in coordinated fashion with countries, principally in Western Europe, to apply pressure to Russia and their economy.  It has had the effect of weakening the Russian economy, but has not yet yielded the kinds of changes in the decision-making by the Russian President that we would like to see.  I think it warrants mentioning that those sanctions -- that sanctions regime that we put place in a coordinated fashion with our allies has been in place for less than a year, certainly a lot less than 53 or 54 years. 

Q    I’m just trying to get at the principle here.  Does economic pressure work to change bad behavior of a regime or not?

MR. EARNEST:  But here’s the principle, Jon.  The sanctions regime that we’ve had in place against Cuba is unilateral.  We’re the only country in the world that has this kinds of sanctions regime.

Q    But it imposes an economic price on Cuba.  I mean, it has hurt Cuba.

MR. EARNEST:  But not nearly in the same kind of way that we would see if the United States were working effectively with our partners and allies to put in place this kind of sanctions regime.  The key to our success in Iran and Russia -- and I’m not saying for the first time today; this is the case that we’ve been making for some time now -- that the success of the sanctions regime has been predicated on our ability to work in coordinated fashion with the rest of the international community to maximize the impact of that sanctions regime.  And as it relates to Cuba, the effect is actually the opposite.  The rest of the world is actually on the other side of this issue.  They criticize our sanctions regime policy against Cuba, and it actually interferes with our ability to bring to bear pressure from the rest of the international community on the Castro regime to better respect human rights in Cuba.

So there is a very stark difference in the way that these policies were implemented.  And that’s why we believe that a strategy -- a fundamental strategy change was necessary.

Q    Can I get you to respond to what Bob Menendez, obviously the top Democrat -- actually, current chairman of the Senate Foreign Relations Committee said about this action?  He said that this action vindicates the “brutal behavior of the Cuban government…Trading Mr. Gross for three convicted criminals sets an extremely dangerous precedent and invites dictatorial rogue regimes to use Americans serving overseas as bargaining chips.”  And he says that this will put thousands of Americans serving overseas increased danger for that very reason.  What’s your response to Senator Menendez?

MR. EARNEST:  Well, here at the White House we obviously have tremendous respect for Senator Menendez.  He is the chairman of the Foreign Relations Committee, and we have worked with him to implement the sanctions regime on Russia that has been useful in advancing our national security interests.  We’ve done the same thing with Iran.  So we have succeeded in working with Senator Menendez, Chairman Menendez on a range of issues. 

But in this situation, we fundamentally disagree.  And there’s no soft-pedaling that.  The fact -- and there’s one factual disagreement that should be pointed out here:  Mr. Gross was released on humanitarian grounds.  For years, the Cuban regime has suggested that Mr. Gross could be released in exchange for the release of Cuban prisoners, and that is a proposal that was summarily rejected by this administration.  If we were open to that, that is an agreement that we would have agreed to years ago.

So the fact of the matter is, Mr. Gross was released on humanitarian grounds at the request of this administration, and the spy swap that was executed between the United States and Cuba did secure the release of this intelligence asset that is now on American soil.

Q    Josh, you are not going to stand there and say that Alan Gross’s release had nothing to do with the release at the same time of the three convicted Cuban spies.

MR. EARNEST:  What I’m telling you is that Alan Gross’s release on humanitarian grounds is something that this administration insisted upon.  And once that agreement was reached, it opened the door for additional negotiations and additional agreements to be reached.  So by removing the impediment of Mr. Gross’s unjust detention, we could engage in a conversation with the Cubans about the spy swap.  And that’s exactly what happened.

Q    So it’s a coincidence that they were both released at the same time?

MR. EARNEST:  No, it’s not -- Jon, it’s not a coincidence.  What exactly happened --

Q    If it’s all part of the same deal, how can you say that the -- I mean, Alan Gross is released, three spies are released.  I understand you also have a Cuban who was working with U.S. intelligence who was released at the same time as part of the same package, but you can’t say that the Alan Gross release is unrelated to the release of these three convicted spies.

MR. EARNEST:  Yes, I can and I just did. 

Q    Really?

MR. EARNEST:  And the reason for that is very simple, Jon.  The reason for that is very simple.  The agreement on a spy swap would not have been reached and was not reached without the standalone agreement to release Mr. Gross on humanitarian grounds.

Q    It happens at the same time, doesn’t it?  Isn’t this all today?  Am I missing something?  Were the --

MR. EARNEST:  Yes, but as I think -- as you know, these conversations between the United States and Cuba were underway for more than a year between senior officials here in this administration and senior Cuban officials.  And all along, the fundamental impediment to our ability to implement the kinds of changes that we would like to see has been the unjust detention of Mr. Gross.  And once the Cubans agreed to release him on humanitarian grounds, then we could have a conversation about some of the other agreements that were reached, and the other agreement that was reached was this specific spy swap between the three Cubans that were held in Florida and the highly valued intelligence asset that has been held in Cuba for almost 20 years but is now on American soil.

Q    Okay.  Just one quick one on a different subject, the Sony hacking.  Does the U.S. government have a reason to believe that, in fact, North Korea was responsible for the hacking?

MR. EARNEST:  Well, I am not in a position to ascribe any responsibility to the apparent hacking of the email system at Sony.

Q    If it were the -- if we do have evidence that it was North Korea, would there be repercussions?  Would the United States seek repercussions for that?

MR. EARNEST:  I wouldn’t want to speculate at this point.  This is something that is under investigation by the Federal Bureau of Investigation, and so for questions on their investigation I’d refer you to them.

Ed.

Q    Are you considering normalizing relations with North Korea under the same theory that if you open it up that you’ll put more pressure on them and maybe they’ll change their behavior?

MR. EARNEST:  No. 

Q    Okay.  On Jon’s questioning about the timing of all of this, will you at least acknowledge that Alan Gross’s release was coordinated?  I mean, the President of the United States had a phone call yesterday with the Cuban dictator.  Did they discuss this maybe in separate sentences, but they discussed all of this in one deal, right?*

MR. EARNEST:  Well, they discussed a wide range of things.  I can’t provide a detailed readout of their conversation, but they spent a lot of time talking about policies in the Western hemisphere, and you can be assured that the President did talk about how important it was for somebody -- for an American citizen who was being held unjustifiably by the Cuban regime, that it was important for that individual to be released on humanitarian grounds, and he was.

Q    On Jon’s other question about what kinds of precedent this sets -- what Marco Rubio and others are charging at least is that this puts a price on American hostages, and that it gives rogue regimes the idea that they can get concessions out of the President of the United States if they take someone hostage.  Why should they think differently?

MR. EARNEST:  Because there was no concession.  Mr. Gross was released on humanitarian grounds.  That’s what we insisted upon and that’s what the Cuban regime followed through on.

Q    Okay, except when we’ve talked about ISIS and the awful tragic beheadings, you’ve repeatedly said the American government won’t pay ransom because that just encourages people to take more Americans.  But I understand you’re trying to make this separation, but as part of the same deal, the U.S. made concessions and released three Cubans.

MR. EARNEST:  Again, as we’ve discussed with Jon, that’s just not the case.  The fact of the matter is, Mr. Gross was released on humanitarian grounds at the insistence of this administration.  And certainly if there are -- I mean, you’ve heard us talk about this in other contexts; when there are Americans who are unjustifiably held overseas, we call for their immediate release as well.

Q    Okay.  Last one.  For months -- months ago, I should say, you had promised that there was a review going on of the separate prisoner swap, Taliban swap, over Bowe Bergdahl.  And we’ve asked you about it before and you said, well, the Pentagon is looking at it.  There’s just been a swap here with spies.  We’re waiting for a public accounting of Bowe Bergdahl.  When will that investigation be released?  When will you be able to show us?  Because there were charges that you broke the law because you did not fully inform Congress.  So when will there be --

MR. EARNEST:  Right.  But that’s not part of the review, Ed, because that’s not the case.  I recognize that that was the charge from some who disagreed with this decision.  The President believed that there was a basic fundamental value at stake here, which is that the Commander-in-Chief was not going to be in a position where we didn’t work to secure the release of one of our men and women in uniform to bring them home; that we were not going to leave that man behind.

And the transfer of detainees from Guantanamo Bay was certified by the Secretary of Defense consistent with the law.  I recognize there’s a difference of opinion about that, but that is what it is.

Q    So you’re going to release the review with the documents that show why the Secretary of Defense made that decision?

MR. EARNEST:  No, the review is related to the circumstances related to the disappearance of Sergeant Bergdahl in the first place.  I don’t have an update in terms of the status of that report, but we believe that that agreement was one that was entirely consistent with a fundamental American value, which is that we leave no man behind.

Kristen.

Q    Josh, you all have made -- highlighted, I should say, the pivotal role that the Pope played in the Vatican, played in securing the release of Alan Gross.  Did President Obama speak with the Pope prior to today’s announcement?

MR. EARNEST:  I don’t believe that he did have an opportunity to speak to the Pope.  You know a couple of things, though, that the President did receive a personal letter from the Pope, and high-level administration officials convened at least one discussion with their Cuban counterparts in the Vatican, in a meeting that was hosted by members of the Pope’s team.  I don’t believe the Pope himself was personally involved in those conversations, but the Vatican was the host of those conversations.  We certainly welcomed their participation in these conversations, and the degree to which the Pope and his team facilitated this reconciliation is one that we appreciate.

Q    Was the Vatican given a heads up prior to today’s announcement in some way, shape or form?  Did top officials here reach out to their counterparts there?

MR. EARNEST:  I don’t have any specific conversations with the Pope to read out, but yes, that there were senior members of the Catholic church that were aware of what was on going here.

Q    Okay.  And when President Obama spoke with President Castro yesterday, first of all, can you tell us what time that conversation happened?  Was it during the day, was it during the evening?

MR. EARNEST:  I believe it was during the day, but I don’t have a specific timeframe.  We can look into that.

Q    Did President Castro give President Obama any specific assurances that he would take steps toward democratic reform like freedom of the press, improving that?  Any other steps or specific guarantees that he gave President Obama?

MR. EARNEST:  Well, he did announce a few things -- or he did inform the President of a few things.  He did inform the President that he intended -- his government intended to release more than 50 political prisoners that we’re being held in Cuban prisons.

Q    But in addition to what’s been announced, of what’s been announced today, did he more broadly say, “and I'm going to continue to take steps to democratize Cuba”?

MR. EARNEST:  Well again, you’d have to talk to him if he wants to read out his aspect of the conversation.  I can tell you that there were three specific commitments that he made.  If there’s more that they want to share, they can do so.  You can be sure that the President continued to impress upon President Castro that it continued to be an American priority and the priority of the Western hemisphere that his government do more to protect and advance the basic fundamental human rights of the Cuban people.

Q    Does President Obama trust President Castro?

MR. EARNEST:  Well, Kristen, this is not a matter of trust, this is a matter of putting in place a policy that the President believes is in the best interest of our economy, is in the best interest of our national security, and will actually succeed in empowering the Cuban people.  That is the goal of this policy and is a policy that we’re eager to put in place.  It's a strategy that’s consistent with our national security priorities, and frankly, it doesn’t hinge upon the trustworthiness of the Cuban leader.

Q    So I guess the other way to say that is, does President Obama have confidence that there will be continued reform within Cuba.  And if so, why?  What gives him that sense confidence?

MR. EARNEST:  What we have confidence in is that the policy that we have announced today will do more to pressure the Castro regime to actually respect and protect, and even advance the basic kind of human rights that for more than five decades under the old policy, that they’ve repeatedly ignored.

Q    And if you don’t see human rights advanced, if you don’t see the regime taking steps toward that end, what recourse does the President have?

MR. EARNEST:  Well, I’d start by saying we already have seen the Cuban regime take more steps in the last day than they have in the last 50 years under the old policy in terms of expanding access to information for the Cuban people, in terms of coordinating with international organizations like the United Nations and the Red Cross, and in terms of releasing political prisoners.

Q    Does the President have any recourse if it ends there?

MR. EARNEST:  What we have is we have a policy in place that will continue to empower the Cuban people, and will remove the distraction of the failed U.S. policy and actually focus international attention on the policy of the Cuban government as it relates to their own people.

Nadia.

Q    Thank you Josh.  On a different topic, the European Union’s (inaudible) today removed Hamas from the terrorist list.  What’s your reaction to that?  And do you think that will advance the peace process?

MR. EARNEST:  Well, Nadia, we did note today’s ruling by the General Court of the European Union on the challenge by the terrorist organization Hamas to its EU sanctions listing.  We’re studying the court’s opinion carefully.  According to the statement by the EU, the decision was based on procedural grounds.  And we understand that the EU sanctions against Hamas remain in effect, pending the EU’s decision on whether to appeal.  What I can tell you -- so we’re going to continue to review the EU decision, but what is clear is that the EU sanctions will remain in place.

I can confirm for you that the United States position on Hamas has not changed.  Hamas is an organization that’s been designated as a foreign terrorist organization, precisely because Hamas continues to engage in terrorist activity and has demonstrated its intent during this summer’s conflict with Israel.  It fired thousands of rockets into Israeli civilian areas and attempted to infiltrate Israel through tunnels that extended into Israel. 

So the United States will continue to work closely with the EU on a range of Hamas-related issues.  And we believe that the EU should maintain its terrorism sanctions on Hamas.

Q    But the EU decision was legal more than political.  Is the U.S. decision to designate Hamas as a terrorist organization based on the legal issue as well, or just political?

MR. EARNEST:  Well, I think the EU decision is one that was based on procedural grounds, and so we’ll allow that procedure to run its course.  I understand that while that procedure is in place, the sanctions against Hamas will remain in place. 

The decision that’s been made by the United States to designate Hamas as a terrorist organization is based entirely on Hamas’s terror activities; that we saw them use missiles to target innocent Israeli citizens.  We saw them use tunnels to carry out attacks against Israeli civilians.  These are the hallmarks of an organization that’s committed to terrorism, and it’s been designated as such by the U.S. government.

Q    But you don’t have any evidence there’s been international engagement in any kind of terrorism act outside Israel or the Palestinian territories?

MR. EARNEST:  I mean, sort of for the full rundown on Hamas’s rap sheet, I guess I’d refer you to the United States Treasury that would make designations about Hamas as a terrorist organization.  The State Department may have some information on this as well.  But certainly the acts of terror that Hamas has committed in Israel certainly justifies their labeling as a terrorist organization.

Q    On a related subject, the Palestinian Authority is presenting a draft resolution at the Security Council today, calling for the end of Israeli occupation and the establishment of a Palestinian state by 2016.  Are you going to veto that? 

MR. EARNEST:  Well, I have not yet seen the details of the resolution that they say that they’re prepared to table at the United Nations.  So I’m going to reserve any comment on that for now.

I will tell you that it continues to be the policy of the United States that the preferred path to Palestinian statehood and a resolution of this conflict is for the two parties -- the Israelis and the Palestinians -- to reach an agreement on the final status issues by negotiating directly.  We’re going to continue to work to advance the interest we all share in bringing about a lasting peace between the Israelis and the Palestinians.

The United States takes this position because it is clearly in the interest of both the Israeli people and the Palestinian people for this situation to be resolved peacefully and through direct negotiations between the two parties.

Tamara.

Q    Yesterday, the president of the U.S. Conference of Catholic Bishops was at the White House for a meeting.  Was this related?

MR. EARNEST:  The President did have the opportunity to visit with the Archbishop, and they talked about a range of issues.  I don’t have a detailed readout of that meeting.  But to sort of paraphrase Major’s suggestion from earlier in this briefing, if you wanted to infer that this might have been among the things that they talked about because it’s an issue that both the President and the Catholic Church have strong feelings about, then I wouldn’t wave you off that notion.

Q    And an update on the Secret Service.  Do you have any update at all on the search for a new director or any changes that are being made?  The report was due earlier this week.

MR. EARNEST:  It was.  I anticipate that the Department of Homeland Security will have more information on this today, so I’d refer you to them.

Connie.

Q    Thank you.  Follow on Cuba.  A few months ago, I spoke to José Cabañas, the Chief of the Cuban Interests Section, and he outlined how this would be resolved.  And he stressed -- he said, don’t use the words “spy swap” or “prisoner swap;” make sure you call it “humanitarian grounds.”  Who initiated these -- the Cuban side or the American side?

MR. EARNEST:  Well, let’s separate out two things.  The last part there about the spy swap -- Mr. Gross was released on humanitarian grounds.  He was not exchanged for the release of any other prisoners or release of any spies.  Mr. Gross is not a spy, so it would not be possible for him to be part of a spy swap.  He was released on humanitarian grounds.

There was a separate agreement that was reached to exchange three Cuban prisoners, spies who were being held on American soil, for a U.S. intelligence asset that had been held by the Castro regime for nearly 20 years now.  That individual is now on American soil. 

As it relates to the initiation of these talks, the President did authorize members of his team in early 2013 to open up this channel and begin conversations with the Castro regime.

Q    And is this seen as a Hanukkah present?

MR. EARNEST:  Well, I saw -- Mr. Gross certainly seemed to think so. 

Christi.

MR. EARNEST:  Thanks, Josh.  The President -- on the question of whether the President would go to Cuba, presumably you would need to see some performance on the part of the Cuban regime before that happened.  Are we talking about a number of months and some performance on reforms?

MR. EARNEST:  Well, I mean, as I mentioned to Major, it is not unprecedented for the President of the United States to travel to countries with whom we have serious concerns about their respect for basic human rights.  For example, the President just last month traveled to both China and Burma, met with the leaders of those countries to try to advance American national security interests.  In those conversations, the President brought up with leaders their failure to do as much as we believe they should to protect and respect basic human rights, including political freedoms of their people.

So it is possible for the President to travel to other countries to represent the interests of the United States of America even when we have serious concerns about the human rights policies of that country.

Q    But this would seem to be somewhat different.  I mean, it would be the first presidential visit in 50 years.  Wouldn’t you need to see -- aren’t there things that you would need to see first before you could entertain taking a step that significant?

MR. EARNEST:  At this point I’m not going to set up any sort of checklist that would be considered a precondition for a presidential visit.  That’s something that we may do at a later date.  I would just note, again, that there are a number of countries that do have, at best, checkered human rights records that the President has visited.  And again, he did that in pursuit of core national security interests, and used the opportunity of those visits to bring attention to these issues.  And we have seen progress that was made by the Cuban government just today, that they announced the release of more than 50 political prisoners.  They released -- or they agreed to allow the import of American communications equipment that will expand access to the Internet and other information for the Cuban people.  And they agreed to deepen their engagement with the United Nations and the Red Cross, two organizations that serve to advance and champion the basic human rights that we’re talking about here.

So that does represent some progress, and it certainly represents more progress than we saw under the more than 50 years of the previous failed policy.

Q    Can I also just ask you about this Cuban intelligence asset who was in prison for 20 years?  Did you know who he was before?  Had the President heard of him?  And has he had an opportunity to call that person?

MR. EARNEST:  I don’t know that the President has had an opportunity to call that individual.  I was not aware of this individual.  It’s my understanding that this -- I’m certainly not a scholar of U.S.-Cuban relations, though, so that may be a low bar. 

But this is an individual whose existence was not previously widely known.  But there were individual who were deeply engaged in our intelligence community who were aware of the valuable contribution that this individual had made to American national security.  That is what made him a valued intelligence asset, and we are pleased that he’s now on American soil.

Q    How soon do you think the President would name an ambassador to Cuba?

MR. EARNEST:  I don’t have any personnel announcements at this time.  But I will say it sounds like a pretty interesting job. 

Jared.

Q    Josh, you mentioned at the top of the briefing that this is an historic day.  Is it diminished somewhat by the continued existence of the facility at Guantanamo Bay?  That’s something -- another promise that the President made before he was elected to office.

MR. EARNEST:  And one that the President continues to work doggedly to close.  And unfortunately, because of the interference that we’ve seen from Congress, we have not been able to do what the President thinks is in the clear national security interest of the United States, which is to close the prison at Guantanamo Bay.  But we’re going to continue to work even in the face of obstacles from Congress to achieve that goal, and that’s something that we’re going to continue to work on.

Q    You’ve read out a number of conversations on this topic.  Did the President discuss at all with Governor Scott of Florida the moves that he was making, given that obviously this is an issue that affects the 90-mile-away state so much?

MR. EARNEST:  No, I don’t believe that he did. 

Q    And because I know that you didn’t just prepare on foreign policy today -- I know that that’s been the lion’s share of today’s briefing.  New York state banning fracking -- the President has emphasized an all-of-the-above energy strategy.  What does the President think about a state with large shale reserves banning a policy that provides a lot of natural gas?

MR. EARNEST:  Jared, I did see the announcement of Governor Cuomo’s policy shortly before I came out here.  I can’t render a detailed analysis of that policy.

Q    But in general, does the President support governors of states banning fracking?

MR. EARNEST:  In general, what I can say is the President has placed a high priority in ensuring that ongoing fracking operations don’t negatively affect the health and wellbeing of people who happen to live in the area where these fracking operations are being conducted.

Q    Does he believe that it should be something that is resolved on a state-by-state issue, or does he support a national policy?  Can you give me anything more than --

MR. EARNEST:  I think the President has acknowledged that there is a role for both the state government and for federal environmental authorities to have on this.  But again, as a specific policy matter, I just haven’t had an opportunity to review Governor Cuomo’s policy and to draw many conclusions about what impact it would have on ours.

Q    But he welcomes generally states going above and beyond when they think it’s appropriate?

MR. EARNEST:  Well, the President certainly believes it’s important for these fracking operations to be conducted in a way that doesn't undermine or threaten the health and wellbeing of people who live in these areas.

Q    Josh?

MR. EARNEST:  JC.

Q    An historical briefing room fantasy question. 

MR. EARNEST:  You're treading into dangerous territory, JC.  (Laughter.)  It’s a family program.

Q    It’s historical -- a historical question.  What would President Obama say today to President Kennedy who initiated these embargoes 53 years ago?

MR. EARNEST:  Well, I’m not sure what he would say.  I do think that even President Kennedy would acknowledge that, after more than 50 years of a policy of isolation didn't bring about the desired result that I think even President Kennedy would acknowledge, that change was needed.  And certainly throughout his career in public service, President Kennedy was somebody who did believe in the value of openness and engagement and in the value of empowering local populations to take greater control over their economic and political situation. 

So it does strike me that while the President is changing a policy that President Kennedy originally put in place, that the philosophy that the President is pursuing and the values that the President is pursuing is entirely consistent with the kinds of values that President Kennedy championed throughout his life.

John, I’ll give you the last one.

Q    Thank you, Josh.  Did the President reach out to any Republicans he knew were sympathetic on this policy change beforehand?  And I refer specifically to Dr. Ron Paul, whose position is identical to the President on the Cuban embargo, or his son, Rand Paul, who has yet to take a position on the embargo or has yet to put out a statement on the policy change today.

MR. EARNEST:  Interesting.  Well, I assume all of you will be asking him about that.  What I can tell you as a general matter is that the President and members of his team convened a number of conversations over the last couple of days with Democrats and Republicans on Capitol Hill about this policy change.  And I can tell you that there were Democrats and Republicans who were pleased with the anticipated announcement, and that there were Democrats and Republicans on the other side of this issue as well.  I think that is one of the things that makes this such an interesting policy to discuss is that the viewpoints on this topic don't cleanly break down along party lines.

I’m going to read one more statement before I go, because I didn't have the opportunity to do it before.  Bob Stallman is the president of the American Farm Bureau Federation, not somebody who has a long track record of supporting policies that are put in place by the Obama administration.  But today he said, “The American Farm Bureau strongly supports President Obama’s move toward normalized relations with Cuba.  The Farm Bureau has long called for removal of trade restrictions with Cuba.  And we believe expanded trade with the U.S. can serve as the cornerstone for additional reforms.”

So again, there is strong support among Democrats and Republicans for the kind of policy that the President has laid out.

Q    You want to give us any of the names of the Republicans who were at the meetings that he --

MR. EARNEST:  I don't have any details about those calls to read out.

Q    Hey, Josh --

MR. EARNEST:  Yes, Steve.

Q    The President mentioned a Canadian role in all this.  What was that?

MR. EARNEST:  The Canadians -- as the President’s team sought to find a place to meet with the Cubans, we turned to our friends to the north in Canada.  And they, on a number of occasions, hosted private confidential meetings between senior members of the American delegation and senior members of the Cuban delegation.  Many of the conversations took place in Canada.

Q    Where?

Q    In Ottawa or --

MR. EARNEST:  Yes, I believe in Ottawa, yes.

Q    Okay, interesting. 

MR. EARNEST:  All right.  Thanks, a lot, everybody.  Have a good afternoon.

END
3:09 P.M. EST

Background Conference Call on Policy Changes in Cuba and the Release of Alan Gross

Via Telephone

10:02 A.M. EST

MS. MEEHAN:  Hi, everybody.  Thanks very much for joining this background call on policy changes to Cuba.  This call will be embargoed until the end of the call.  We will lift the embargo at the end of the call, so you cannot report anything that you hear on this call until the call is concluded.  At that point, you may quote officials on the call as senior administration officials only, not by name.  We will also lift the embargo on the factsheet that the White House released this morning at the end of this call.

So again, at the end of the call you’re welcome to report on background anything you hear on this call as well as quote from the factsheet, but not before this call is over.

We have seven senior administration officials with us today from across the interagency.  And with that, I will turn it over to senior administration official number one.

SENIOR ADMINISTRATION OFFICIAL:  Great.  Thanks, everybody, for joining the call.  I wanted to start by walking you through the overview of what we will be announcing today, and then my colleagues can fill in some of the details. 

First of all, these steps will be the most significant changes to our Cuba policy in more than 50 years.  The President, when he came into office, was committed to changing a policy that we felt had failed to advance our interests for the last several decades by promoting greater openness with Cuba and facilitating greater access for the Cuban people to economic opportunity and to the type of relations with the United States that can ultimately empower the Cuban people.

In that vein, the President, as you know, authorized, for instance, Cuban Americans to be able to travel to the island and to send remittances to their family on the island.  We received very positive feedback from those initial policy changes.  And the President was committed to pursuing additional steps through his time in office.

However, we had a significant impediment to our ability to pursue additional policy changes with the imprisonment -- wrongful imprisonment of Alan Gross, a USAID subcontractor in Cuba, for over five years now.

So, first, let me walk you through Alan’s release and an exchange of intelligence assets that took place today before getting into the policy changes.  Importantly, we did pursue a swap, an exchange of intelligence assets, including the return of the three Cubans who remained jailed in the United States from the so-called Cuban Five Wasp Network.  They were returned to Cuba this morning.  In exchange, the Cubans released a U.S. intelligence asset who has been imprisoned in Cuba for nearly 20 years.  The identity of this asset will remain secret, but we can provide you with some information about his importance to the United States. 

So this individual was responsible for some of the most important intelligence and counterintelligence prosecutions that the United States has been able to pursue in recent decades.  For instance, he provided the information that led to the identification and conviction of Defense Intelligence Agency senior analyst, Ana Belen Montes; former Department of State official, Walter Kendall Myers and his spouse, Gwendolyn Myers; and members of the Wasp Network in Florida, including the so-called Cuban Five.  So again, this intelligence asset, who was a part of this exchange, provided information that led to the prosecution in part of the Cuban Five.  So his return was particularly important to us.

At the same time, Cuba agreed to release Alan Gross on humanitarian grounds.  And Alan was flown back -- is currently flying back to the United States with his wife, Judy.  Again, we believe Alan was wrongfully imprisoned, and we overwhelmed with joy that Alan will be reunited with his family, particularly in this holiday season of Hanukkah. 

So again, the exchange was the three Cubans who have been imprisoned in the United States for the U.S. intelligence asset who’s been imprisoned in Cuba for nearly 20 years.  And then the Cuban government released Alan Gross on humanitarian grounds.

With that issue resolved, the President is now going to be announcing very significant changes to our Cuba policy.  What we are doing is beginning the normalization of relations between the United States and Cuba.  And I’ll just give the overview of these steps, and then my colleagues can fill in some details.

First, we will be immediately initiating discussions with Cuba to reestablish diplomatic relations that have been severed since 1961.  And so we will enter into discussions with Cuba about reestablishing an embassy in Havana, and we will be initiating high-level contacts and visits with Cuba.  We do so in the belief that there are significant issues where we’d benefit from cooperation, like our current efforts to fight Ebola, where Cuba has dispatched hundreds of health care workers to Africa, but also issues like migration, counterterrorism, drug trafficking, disaster response, where practical cooperation can serve the interests of the United States and Cuba.

At the same time, we fully expect that we’ll continue to have strong differences, particularly on issues related to democracy and human rights.  The United States will continue to promote our values.  We will continue to support civil society in Cuba.  We’ll continue our democracy programming. 

So, again, the fact that we are reestablishing diplomatic relations is, frankly, a better way in our view of advancing our interests and our values.  President Obama has long believed that engagement is a better tool than isolation, and nowhere is that clearer than in Cuba where we have seen a policy of isolation fail for the last 50 years in advancing American interests and values on the island.

Second, the President has instructed Secretary Kerry to review Cuba’s designation as a state sponsor of terrorism.  So that process will be initiated and has to go through a formal review so that we are guided by the facts and the law in making that determination.

Third, we are taking a number of steps to significantly increase travel, commerce, and the flow of information to and from Cuba.  And we do this on the premise that it does not make sense to impose restrictions on the American people and on American businesses that disadvantage the freedom of Americans to travel or the ability of U.S. businesses to operate in Cuba.  And so those -- the steps that we are taking will facilitate greater activity for U.S. persons and businesses, but also, importantly, we believe that by further opening up to Cuba, we will be able to promote openness and reform in Cuba. 

There have been some incremental reforms taken in Cuba in recent years, but clearly we believe that more needs to be done.  Again, however, we believe that openness is a better policy than isolation in advancing the things that we care about in Cuba.  So there will be greater people-to-people engagement and travel opportunity.  There will be the ability for the American people to use credit and debit cards when they travel to Cuba.  We’ll be increasing significantly the amount of money that can be sent to Cuba through remittances.  We will, again, be facilitating increased transactions, including U.S. financial institutions being allowed to open accounts in Cuban financial institutions.  And we will be authorizing increased telecommunications connections between the United States and Cuba.  All of these policy changes my colleagues can go through in greater detail.

In addition, the United States will be participating at the Summit of the Americas in Panama next year, and Cuba will be participating as well.  We are not objecting to Cuba’s participation at the summit.  We are making clear that we believe that democracy and human rights have to be on the agenda at the summit; that civil society has to be included at the summit.

But I would note that in all of his engagements with Latin American leaders, the President has consistently heard of the importance of taking the kind of steps that he is taking today, which we believe will be strongly welcomed across the hemisphere.

Let me just go through a couple other points before turning to my colleagues. 

In terms of how we got to where we are today, the President authorized a high-level channel of communication with the Cuban government last spring.  The individuals on the U.S. side who participated in that channel are Ben Rhodes and Ricardo Zuñiga, the Senior Director for Western Hemisphere here at the National Security Council.

There were multiple meetings with Cuban officials that took place in third countries; I’ll just identify the two principal ones.  Canada hosted the majority of these meetings, and I want to thank the Canadian government for providing its good offices and hosting our discussions with the Cuban government.  Canada did not participate in the substance of the discussions, but they were indispensable in providing a venue and support for these efforts.

Second, and very importantly, the Vatican played a role in this as well.  Pope Francis personally issued an appeal through a letter that he sent to President Obama and to President Raul Castro, calling on them to resolve the case of Alan Gross and the cases of the three Cubans who have been imprisoned here in the United States, and also encouraging the United States and Cuba to pursue a closer relationship.  The Vatican then hosted the U.S. and Cuban delegations where we were able to review the commitments that we’re making today in terms of the exchange of assets, in terms of the release of Alan Gross, and also in terms of some of the other changes in our relations that we’re pursuing.

I’d also note that the Cuban government has made some additional decisions.  These are sovereign decisions of the Cuban government that we have welcomed.  Specifically, the Cuban government agreed to release 53 prisoners whose cases we brought to their attention.  These are individuals that we believe are political prisoners, and we welcome very much their release.  A number of those individuals have already been released, and we expect to continue to see those releases going forward. 

The Cuban government also made it known to us that it is going to be taking steps to increase internet connectivity for its citizens.  This would obviously be a welcomed step.  And with the additional authorization for U.S. telecommunications companies to operate in Cuba, combined with Cuba’s willingness to pursue greater internet connectivity, we believe that the Cuban people will be further empowered.

Lastly, the Cubans are increasing their engagement with the United Nations and with the International Committee of the Red Cross to have discussions about certain conditions within Cuba.  This is an issue that we have consistently encouraged the Cubans to take action on, and so there will be additional visits to come for those two institutions.

Finally, I’d note that President Obama spoke yesterday with President Raul Castro of Cuba to review and finalize the steps that were taken today in terms of the release of the three Cubans in exchange for our intelligence asset and for the release of Alan Gross.  And the President also made clear his intent to pursue these policy changes, but also to continue our advocacy for human rights in Cuba.

With that, I’ll turn it over to my State Department colleague to give a little bit more detail on the State pieces of this.

SENIOR ADMINISTRATION OFFICIAL:  Thank you very much.  Let me just go through a couple of things from the State Department’s perspective that are our responsibility, or our emphasis.

On diplomatic relations let me just say a couple of things.  Obviously, diplomatic -- full diplomatic relations are something that get worked out between two governments.  We’ve agreed to move towards full diplomatic relations, reestablishment of them.  They were broken in 1961, as my colleague mentioned.

As you probably all know, we did not have any presence in Cuba from 1961 until 1977, when we established the Interests Section.  We’ve been under the protection of the Swiss the entire time.  But we will end that relationship and move towards having an embassy and the full normal diplomatic relations.  But those things get worked out between the two governments, and they will -- we will proceed to do so in conjunction with the Cubans.  And we don't know exactly what that timeline will be, but we’ll move towards that as quickly as we can.

The other part of this that is within the State Department’s purview is the review that the President has asked for of the listing of Cuba on the state sponsor of terrorism list.  Cuba has been on that list since 1982.  And we will undertake that review quickly.  But there are many steps that are in the law that we must undertake, and so we will do that, including the consultations with the intelligence community and other steps in the law before we undertake the recommendation that will be made at the end of that process.

Let me also emphasize that I think what my colleague said -- let me emphasize, as well, that it’s important to note that this is being done because we believe the policy of the past has not worked and because we believe that the best way to bring democracy and prosperity to Cuba is to do so via a different kind of policy.  But that does not for a moment believe that we're lessening our emphasis on human rights, on democracy, on the importance of civil society.  Quite the contrary.  In fact, our emphasis on human rights will be just as strong and we believe more effective under this policy.  We will engage directly with the Cuban government on human rights. 

And as an example of that, our principal officer in Havana, Jeff DeLaurentis, will be meeting with members of Cuban society and dissidents later today to walk them through the President’s initiatives of today, and to emphasize to them, as well, that their efforts on behalf of democracy and human rights in Cuba not only won’t be forgotten in these initiatives, but will, in fact, take center stage and a new emphasis, and we believe a new -- get new wind, if you will, by this approach.

Let me also say that one of the things you all know is that our policy and the way we’ve gone about it on Cuba has been a severe problem -- or we’ve been severely criticized for it by most countries, if not all, in this hemisphere.  You may remember that in 2012, when the President attended the Summit of the Americas in Cartagena, this was one of the issues that was universally criticized by countries around the hemisphere, our policy on Cuba.

We believe that this policy shift and the way we will engage the Cuban government in support of democracy and prosperity will greatly help our policy initiatives around the hemisphere and our influence throughout the hemisphere on things that are important to us, including democracy and human rights.  And we expect strong support from governments throughout the hemisphere, both for this policy change and for efforts to support and promote civil society and human rights in Cuba.  So we expect those efforts to be more effective under this policy than they’ve been in the past. 

Let me stop with that.  Thank you.

MS. MEEHAN:  Thank you.  And now we’ll turn it over to our colleague at the Department of Treasury.

SENIOR ADMINISTRATION OFFICIAL:  Thank you and good morning, everyone.  As my colleague noted, the changes that the President will be announcing today aimed at advancing the administration’s policy on empowering the Cuban people, promoting political, social and economic reform in Cuba, and will also pave the way for enhanced commerce and trade between the United States and Cuba in certain areas.  There is a slew of changes that the Office of Foreign Access Control, or OFAC, will be implementing through amendments to our Cuban assets control regulations to give effect to these changes, and I expect to see those changes made in the coming weeks. 

To give you a little bit of detail, in 2011 we took steps to ease travel restrictions, in particular with respect to Americans’ ability to visit family in Cuba, generally licensing such travel.  We will be easing travel in the coming weeks across all of the 12 categories for which OFAC has historically issued licenses.  Those categories are family visits; official business of the U.S. government, foreign governments and international organizations; journalistic activity; professional research and professional meetings; educational activities, religious activities, public performances, workshops, and other competitions and expeditions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; export-import of the transmission of information or informational materials, as well as certain export transactions that may be considered for authorization under the existing guidelines. 

Under these new forthcoming regulations, travel to Cuba for tourist activities, which Congress has defined as activities outside of these 12 categories, will remain prohibited.  Concerning remittances, we had already eased in 2009 restrictions on non-family remittances to allow individuals in the United States to send up to $500 to any Cuban national, with the exception of Cuba government or communist party officials per quarter.  The President will be announcing that we will be increasing that amount to $2,000 per quarter.  Notably, donated remittances for humanitarian projects, support for the Cuban people, and development of private businesses in Cuba will be generally licensed with no limitation on amount. 

Another very important area in which we will be easing restrictions is increasing communication and access to communication technology for the Cuban people.  Telecom and Internet linkages between the U.S. and Cuba, including infrastructure related to those linkages in Cuba, will be authorized without requiring a specific license from OFAC.  These steps build upon efforts initiated in 2009 to facilitate the increase flow of information to and from the island. 

The regulatory definition of cash in advance, a provision that regulates payment for the export of agricultural and medical goods from the U.S. to Cuba, will be changed to a cash before transfer of title definition.  This will allow U.S. exporters to be more competitive with respect to their exports to Cuba, and will generally permit the export of agricultural products to Cuba so long as payment is received prior to the goods arrival at a Cuban port of entry.

U.S. travelers to Cuba will be permitted to import into the United States merchandise as they bring back with them with a value of up to $400 per person.  Included in this new provision will be an allowance of up to $100 per person of alcohol or tobacco products.  I also want to note that we will be issuing new regulations to allow U.S. banks to establish correspondent accounts with Cuban banks.  U.S. financial institutions will also be authorized to facilitate the use of U.S. credit and debit cards by travelers in Cuba. 

These changes will ease the flow of remittances to, and authorize transactions with, the Cuban people.  This also means that those who do trade with Cuba -- for example, in the areas of agricultural medicine and medical products, telecommunications, et cetera -- will have a much easier time doing so, and the financial easing will facilitate a number of the changes that I outlined above.

As I noted earlier, the regulatory amendments are currently in development and you will see these changes in the coming weeks, along with detailed guidance.  These changes will not take effect, however, until the new regulations have been published, and we will take every measure possible to keep everyone apprised of developments.  Thank you.

SENIOR ADMINISTRATION OFFICIAL:  Great.  We’ll go to Commerce now.

SENIOR ADMINISTRATION OFFICIAL:  Hi, Secretary Pritzker strongly supports the President’s initiative to spur long overdue economic and political reform in Cuba.  She believes that commercial diplomacy initiatives outlined today will strengthen human rights and the rule of law.  She believes that economics and more commercial engagement have the power to change lives for the better, and she looks forward to the opportunity to visit -- to do a commercial diplomacy visit to Cuba as part of the President’s initiative to encourage positive change in Cuba.

Specifically, the Commerce Department will be issuing regulations that will authorize for export certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.  These changes will make it easier for Cuban citizens to have access to lower-priced goods to improve their living standards, gain greater economic independence from the state, and overall develop the private sector in Cuba.

In addition, regulations also will be issued to facilitate export of telecom devices equipment, including related hardware, software and services in order to enhance communications to and from Cuba and among the Cuban people.

Q    Hi, guys.  Thanks for doing the call.  I wonder if, one, you could talk a little bit more about President Obama’s call with President Castro yesterday, how long it lasted and what else was discussed.  Is there any plan for them to talk again in the future?  And then, secondly, on these talks that have taken place since the spring, mostly in Canada, could you elaborate a little bit more on that, how that took place?  And was there a key moment -- what happened that made today happen?  In other words, was there a meeting last week?  What was the final critical stage that pulled all this together?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Peter.  On the first question, the call yesterday I think lasted between 45 minutes and an hour, and it was obviously the first engagement at the presidential level with Cuba since the Cuban Revolution.  And President Obama went through the swap and the release of Alan Gross, and then discussed the changes that he would be announcing today.  They discussed the potential for cooperation on issues like Ebola, issues in the hemisphere, issues like counterterrorism and counter-narcotics.  At the same time, the President did underscore that we would continue our support for democracy and human rights in Cuba.

Again, President Castro reviewed the steps that Cuba is taking, and I'll leave it -- I believe President Castro is making a statement later today, so I won't go into too much detail about what he said.  We tend not to do that with calls with foreign counterparts.  But suffice to say, they were summing up the work that's been done through the channel over the course of the last -- over a year now, as well as looking forward to the announcements today, while noting that we understand we're going to continue to have differences.  So this change doesn’t negate the fact that the U.S. and Cuba are going to have strong differences on the Cuban political model and on aspects of foreign policy, both U.S. and Cuban foreign policy.  So they had areas of agreement and areas of difference that they went through on the call.

With respect to the channel, I could give a couple more details.  This was initiated when the President authorized exploratory discussions with Cuban officials in the spring of 2013.  We have multiple ways of communicating with Cuba, through our Interests Section in Havana and those here in Washington, and we interacted -- our missions in New York.  So we have the ability to pass messages, and so we initiated this contact with the Cuban government last spring.

The first face-to-face discussions with the Cubans took place in June of 2013 in Canada.  And again, Canada was the principal venue for a series of discussions that took place between June of 2013 and November of this year. 

In terms of critical meetings or junctures, I'd just note a couple things.  One, it was very important to us that we recover this intelligence asset for a couple of reasons.  Obviously, we’ve wanted Alan Gross to be released for five years now.  We rejected the notion that Alan Gross was an intelligence asset, so we were not going to engage in a swap of intelligence assets that involved Alan Gross directly.

Number two, this intelligence asset did heroic work for the United States at great risk to himself, enabling the prosecution of a number of individuals, including the Cuban Five.  And he’s been in a Cuban prison for nearly 20 years, and so our ability to recover him was an important principle for us in those discussions.  But also, this was an opportunity to review broader aspects of our relationship, areas of agreement and disagreement, to get a sense from Cuba of the steps that they are contemplating taking, and the release of a certain number of prisoners was important to us, but also to explore with them areas of practical cooperation and the types of steps that President Obama is announcing today.

An important meeting, and I guess where you could say this all was finalized, was hosted by the Vatican.  So senior Vatican officials received both the U.S. and Cuban delegations this fall, and essentially the Vatican was a venue for the U.S. and Cuban sides to present their commitments and to finalize the types of steps that are being taken, including obviously the prisoner transfers.  And the support of Pope Francis and the support of the Vatican was important to us, given the esteem with which both the American and Cuban people hold the Catholic Church and, in particular, Pope Francis, who as you know has a substantial history in Latin America -- the first Pope to be chosen from Latin America.  So President Obama has enormous respect for Pope Francis and his personal engagement in this was important to us.

When President Obama met with Pope Francis, for instance, earlier this year, Cuba was a topic of discussion that got as much attention as anything else that the two of them discussed.  So I would say that particularly the exchange and transfer of prisoners was finalized in that meeting at the Vatican, but we also were able to review the steps that we’d each be taking with the Vatican, including the normalization of relations between the countries and the establishment of diplomatic relations.  And the Vatican welcomed that news.

I’d just note that there were no meetings that took place in either Cuba or the United States in this channel, and I’d also just note that we are not going to characterize the Cuban participation just because that’s our principle in terms of these types of negotiations.  That’s what we did with respect, for instance, to the work that Jake Sullivan and Bill Burns did with the Iranian side in the lead-up to the Joint Plan of Action last year.

So with that, we’ll move to the next question.

Q    Can you talk about the timeframe or the opening end of this?  Does this have to follow the sort of the (inaudible) to what happened with Vietnam?  When would you expect to actually have restoration of diplomatic relations?  And will the President be trying to overturn Helms-Burton?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Andrea.  So the decision has been made to establish diplomatic relations by both President Obama and President Castro.  So we’ve decided to establish an embassy, we’ve decided to restore diplomatic relations.  So it’s, frankly, just a matter of going through the process -- logistical and otherwise -- of formalizing that decision.  So I can’t put an exact timeline on it, but we expect to do it as soon as possible.  But for your purposes, I mean, I think you can characterize this as a decision that has been made that will be taken. 

And now, with the announcement today, what that will do is set in motion discussions that can take place between the Department of State and then reps in Cuba to resolve any specifics related to the establishment of a U.S. embassy in Cuba and a Cuban embassy here in the United States.  That shouldn’t be too difficult, given the fact that we already have a very significant Interests Section in Cuba.  So we have a presence there, but we are now going to transition that into an embassy.  So I can’t put an exact timeline on it because the discussions are just being initiated today, but the discussions are taking place with both Presidents having taken a decision to establish diplomatic relations.

The second question was Helms-Burton.  Look, we start from the premise that -- the President does -- that the collective policy known as the embargo hasn’t worked, so we support efforts to remove those restrictions.  However, we understand that Congress is unlikely to take those steps in the immediate future.  So what we’re doing today is acting within the boundaries of the law to substantially increase travel, investment, commerce with Cuba through what the President can do.  At the same time, we’d encourage members of Congress to look at what they can do to support the direction the President has set today.

And again, our belief is that -- as with the family travel and remittances -- it will become evident that there are benefits in this type of engagement, and that already there is support in Congress on a bipartisan basis for a new approach.  But there’s also strong opposition.  So there will be a debate that takes place.  But we believe that the utility of these policy changes will become evident and will hopefully create greater momentum for legislative action going forward.

I’d also note that attitudes have been changing.  The Cuban American population, particularly younger generations of Cuban Americans have increasingly supported greater openness.  That's something that President Obama personally experienced in his contacts with Cuban Americans and in his travels to places like Florida and New Jersey and in the 2008 and 2012 campaigns.  So there’s been a continued evolution of public opinion, of opinion in the Cuban American community. 

But if you look at the constituency for this type of change, it involves many different elements of American society:  Cuban Americans; the Catholic Church has been very supportive; the U.S. business community has been very supportive of the type of changes that we're announcing today.  So again, we believe that there is a substantial constituency and multiple constituencies for this type of change.  And that too will shape the dynamic in Congress going forward.

Next question.

Q    Hey, guys, thanks for doing the call.  Just wondered if you could follow up on the Congress question.  Do you know if the President has talked to the new Republican leadership about this and asked them for anything in terms of a timeline on moving forward on lifting the embargo?

And then, I’m also curious -- there’s been a lot of reporting from some of my colleagues on some USAID programs that have been pretty controversial in Cuba.  Does that factor into these discussions at all?  And is Raj Shah’s decision to leave the administration part of this negotiation?

SENIOR ADMINISTRATION OFFICIAL:  So on your first question, Julie, the President has had a number of conversations with members of Congress leading up to this decision.  And he and other administration officials have briefed multiple members of Congress, including the leadership and key committee members and key members who focused on Cuban American relations.

Again, we're not focused today on legislative action; we're focused on what the President can do.  So he’s not sought to initiate any process with respect to the lifting of the embargo.  Again, I think he’s signaling with the actions he’s taking today that he does not think that policy has succeeded, and we’d welcome efforts in Congress to end those restrictions.  But we're not focused today on calling on Congress to take a particular action.  We're focused on communicating this new direction for U.S. policy.

I’d also note that in terms of the recovery of Alan Gross, we had Senator Flake, Senator Leahy and Congressman Van Hollen travel on the plane to get Alan.  And that's indicative of bipartisan support in Congress for not just Alan’s recovery, but for the types of changes that we have announced today.  Alan will also be greeted at the airport by a group of members of Congress.

And I’d like to thank really a broad group of members of Congress who have advocated for Alan’s release, but also for these types of changes we're announcing.

With respect to USAID, Raj’s departure had absolutely nothing to do with this.  He had long planned to leave around the end of this year.  We’ve known that for some time now.  So it’s merely a coincidence of timing.  Raj, by the way, has done extraordinary work as USAID Director and we’ll certainly have more time to honor his contributions.

With respect to the democracy programming, it did factor into the discussions.  The Cubans do not like our democracy programming.  They consistently protest those initiatives, not just in our channel, but in other diplomatic engagements with the United States. 

Again, we made clear that we’re going to continue our support for civil society for the advancement of our values in Cuba.  So really, that was an issue of difference that we will continue to have with Cuba, and we fully expect them to raise those issues just as we will raise issues with the Cubans about democracy and human rights.  However, we’re going to do that through a normal relationship.  We’re going to do that through our embassy in Havana.  We’re going to do that through contacts between our various agencies.

This does not need to be a relationship that is frozen in time.  If there is any U.S. foreign policy that has passed its expiration date, it is the U.S.-Cuba policy.  And what we’re focused on today is turning the page to a new chapter where we’ll be more able to raise directly with the Cubans our concerns, and, frankly, they’ll be more able to directly raise with us their concerns.  And frankly, that can avert hopefully the type of scenario we had with Alan Gross.

Q    Thanks.  Just briefly, could you talk about the timing of the Pope’s letter?  And then also, could you give a little bit more color about the upcoming OAS Summit and how much of a -- how awkward the existing U.S. policy would have been, how much pushback there would have been?  Would the President not have even been able to attend that summit, or what would that have been like had you not made this change?

SENIOR ADMINISTRATION OFFICIAL:  Good questions there.  The letter followed the President’s meeting with Pope Francis.  So they discussed these issues.  I think Pope Francis got a sense that President Obama was contemplating these types of changes.  We had already initiated discussions with Cuba, but Pope Francis then decided to make a personal appeal, which is very rare.  We haven’t received communications like this from the Pope that I’m aware of other than this instance.

And so he sent that letter directly to President Obama, and separately he communicated through a letter directly to President Castro early this summer following the meeting.  And that gave I think greater impetus and momentum for us to move forward.  And then of course, the Vatican hosted the two delegations, and they were the only government, I should note, that participated in these discussions.  Canada hosted talks, but when we met at the Vatican with the Cuban side, Vatican officials were in that meeting, and so they were able to participate and express their support for these steps.

With respect to the Summit of the Americas, it is a huge burden, if not an albatross, on our relations in the hemisphere.  The last Summit of the Americas, instead of talking about the things that we were focused on -- exports, counter-narcotics, citizen security -- we spent a lot of time talking about U.S.-Cuba policy.  And frankly, any of you who cover the hemisphere know that a key factor in every bilateral relationship we have -- including with our closest friends in the hemisphere -- is when are you going to change your Cuba policy. 

And so we believe that this substantially opens the door for the United States in the hemisphere.  This could be a transformative event for the United States in Latin America, and I think that will be a very positive aspect of this policy.  And frankly, for us, it’s not just about Cuba, it’s about Latin America broadly.

I would also add that, having taken these steps, we’ll also be saying to our friends in the hemisphere that we all need to be raising human rights with the Cuban government; that, frankly, there will no longer be this focus on American policy.  We’ve changed that.  And now we can focus on discussing issues we care about and that includes human rights.  So we believe that there’s opportunity in that respect, as well.  And the summit in Panama will be an opportunity to advance those discussions. 

But again, we believe that this is going to be a very important issue in terms of increasing our engagement in Latin America, and it positions the United States to advance our interests and our values more effectively without us being the issue, without our Cuba policy consistently being the issue. 

Just one additional in terms of international fora.  There’s the annual vote on whether or not the U.S. embargo should be lifted at the United Nations.  That took place earlier this year.  I believe the vote was something along the lines of 192 to 2.  I think we were joined by Palau in that vote.  The rest of the world has gone from this set of policies, and I think this will be good for the United States and not just the hemisphere, but in the world and in international fora generally. 

Next Question.

Q    Hello, yes, thank you for doing this.  I was wondering if in the past, Congress, and especially led by Cuban American lawmakers, have (inaudible) at this by the Obama administration to ease restrictions on travel and remittances.  I was wondering if you reached out to them and what has been their response in terms of all these new efforts being announced today.  And also, can you confirm that, in fact, there was a swap -- because I’ve seen media reports that Alan Gross’s freedom was not a swap, so can you clarify that please?  And thank you so much for doing this again.

SENIOR ADMINISTRATION OFFICIAL:  Yes, no I'm happy to clarify that.  There was a swap for the three Cubans in exchange for the U.S. intelligence asset who’s been detained in Cuba for nearly 20 years.  That was a swap.  Alan Gross was not a part of that exchange because he’s not an intelligence agent, but the Cuban government took the decision to release Alan Gross on humanitarian grounds.  That’s the basis for their decision to release Alan.  So it's a swap -- three Cubans who were intelligence assets for Cuba and who have been imprisoned here in the United States for over 15 years for the U.S. intelligence asset who’s been imprisoned in Cuba.  And then Alan Gross was released concurrently this morning as a humanitarian step by the Cuban government.

With respect to Cuban American members of Congress, look, we respect the passion of those who have been advocates for change in Cuba.  We recognize that some members of Congress, including some Cuban American members of Congress, will strongly disagree with elements of what the President is announcing today.  But this is going to be a continued dialogue, and our point is going to be that we’re taking these steps because we care about the same things.  We care about the Cuban people.  We care about human rights.  And we believe that the current approach isn’t working and that a policy of engagement is going to be more effective.

However, as we engage Cuba, as we establish an embassy, as we prepare for the Summit of the Americas, we want the Cuban American community broadly to be partners in setting the agenda and communicating to us what we need to be concerned about.  But with respect to the President’s authority, we are acting within the limits that have been set by Congress but we believe and are certain, and we’ve done the appropriate reviews inside the government, that the President has the authority to announce the steps that he did today. 

For instance, diplomatic relations -- that’s an area that falls fully within the purview of the President.  The SSOT list, we’ll make a determination based on the facts.  And then these regulatory changes that will facilitate greater commerce and travel, we are acting within the boundaries that have been set and so we’re confident in our ability to take these steps.

We’ve got time for a couple more questions.

Q    Regarding the trade portion of this plan, how would you characterize how open trade will be with Cuba?  Is there any estimate on the potential market for U.S. exporters?  And then, finally, what about the Cuban side?  Are we going to be able to buy Cuban cigars?

SENIOR ADMINISTRATION OFFICIAL:  I’ll turn this to my Treasury and Commerce colleagues to start.

SENIOR ADMINISTRATION OFFICIAL:  This will open up certain kinds of products that will be mainly used by the private sector within Cuba, which only recently has initiated and is growing.  It will be residential construction, goods used by private sector Cuban entrepreneurs such as restaurants, barber shops, small business operators, and agricultural equipment for small farmers.  So it is designed to strengthen civil society and the private sector.

In addition, there is a focus on telecommunications equipment and facilitating exports of goods and services that will enable the country to improve its telecom and IT infrastructure.

SENIOR ADMINISTRATION OFFICIAL:  To give you some round numbers for dollar values, last year, in 2013, we at Commerce issued licenses for almost $300 million worth of commercial sales for medical products alone and about $3 billion of agricultural exports.  So just in those two areas that have already been authorized, there are some substantial potential.

SENIOR ADMINISTRATION OFFICIAL:  And the regulatory changes being announced today will be implemented through new regulations, but they will facilitate the ability to do exports by making the opportunity to do that more general and have more general authority to do that, rather than having to apply for specific licenses each time.  

SENIOR ADMINISTRATION OFFICIAL:  This is from the Treasury Department.  I would just respond to the final part of the question.  Authorized travelers to Cuba we allow to return with $400 worth of general goods and up to $100 of alcohol or tobacco products.  That can include cigars.  But that authorization is for personal consumption; that is not for resale or commercial purposes. 

SENIOR ADMINISTRATION OFFICIAL:  I would just add one more piece to that, which is that existing authorized trade for food and medicine, but particularly for agricultural goods, is going to be facilitated by a number of the measures that are going to be undertaken by the Department of the Treasury, particularly with respect to the cash and advance rule for agricultural sales.

Q    I’m not quite sure you fully answered Angela’s question about buying Cuban cigars.  Not to take it to that level, but there are some of us who would probably like that answered question -- that question answered.  It sounds like from what you’re saying that the importing of Cuban goods is still going to be restricted by the embargo.  And is the travel ban on American travel to Cuba being lifted here, or is that still being constrained by the embargo?  And I just wanted to know if Fidel Castro was involved.  Was Fidel Castro involved in any of these conversations that led up to today’s announcement?  Thanks very much for doing the call.

SENIOR ADMINISTRATION OFFICIAL:  Jim, I’ll start.  And again, I know you’re a proud Cuban American.  With respect to the travel, we cannot completely lift the travel ban because of the legislation.  However, what we’re doing is we’re authorizing as much travel as we possibly can within the constraints of legislation.  So every kind of travel that can possibly be licensed we are now permitting.  And so that should lead to a significant ability for Americans to travel to Cuba for the broad variety of purposes that were outlined earlier in the call.

So the ban has to be lifted by Congress, but the President is doing everything that he can with his authority to facilitate travel within the limitations of the law.  And we believe that that will lead to a significant increase in travel.  We’ve already seen Americans take advantage of the more limited licensing that has facilitated travel to Cuba.  With these steps, there is a significant broadening to include every kind of travel that is licensable under the law, and that should lead to an increase in Americans traveling.

Fidel Castro was not involved in the discussions.  President Raul Castro obviously was the individual on the Cuban side who was authorizing his team and the person who communicated with President Obama yesterday.  The Cuban side can speak to their decision-making process.  But clearly, Raul Castro is the President of Cuba now and is the decision-maker on these steps.

And then I’ll turn it over to my colleagues on your question.  But again, you are permitted to purchase tobacco products, including cigars up to a certain amount, so that may be the answer you're looking for.  But I’ll turn it over to my colleagues.

SENIOR ADMINISTRATION OFFICIAL:  Yes, so that amount is $100 if you're an authorized traveler.  So if you're going under any of the categories that my colleague and I have outlined, you can purchase up to $100 of tobacco products to bring back to the United States -- but not for resale -- for consumption or for personal use.

With respect to the travel categories, I do want to just correct a misstatement I made at the very outset in my opening remarks.  There have been two prior relaxations by President Obama with respect to travel:  2009 generally focused on family travel, and 2011 focused on a number of other categories, including educational, cultural, religious, and journalistic activity.  And I had put the 2011 date on family travel.  I just wanted to be sure I corrected that.

MS. MEEHAN:  Thank you, everyone.  With that, our call is concluded.  Just to reiterate the ground rules on -- the embargo on this call is now lifted.  The embargo on the White House factsheet is also now lifted.  But you can only quote the officials on this phone call on background and attributed to senior administration officials, rather than by name.

Thank you very much.  Have a great day.

END

11:02 A.M. EST

Via Telephone

10:02 A.M. EST

MS. MEEHAN:  Hi, everybody.  Thanks very much for joining this background call on policy changes to Cuba.  This call will be embargoed until the end of the call.  We will lift the embargo at the end of the call, so you cannot report anything that you hear on this call until the call is concluded.  At that point, you may quote officials on the call as senior administration officials only, not by name.  We will also lift the embargo on the factsheet that the White House released this morning at the end of this call.

So again, at the end of the call you’re welcome to report on background anything you hear on this call as well as quote from the factsheet, but not before this call is over.

We have seven senior administration officials with us today from across the interagency.  And with that, I will turn it over to senior administration official number one.

SENIOR ADMINISTRATION OFFICIAL:  Great.  Thanks, everybody, for joining the call.  I wanted to start by walking you through the overview of what we will be announcing today, and then my colleagues can fill in some of the details. 

First of all, these steps will be the most significant changes to our Cuba policy in more than 50 years.  The President, when he came into office, was committed to changing a policy that we felt had failed to advance our interests for the last several decades by promoting greater openness with Cuba and facilitating greater access for the Cuban people to economic opportunity and to the type of relations with the United States that can ultimately empower the Cuban people.

In that vein, the President, as you know, authorized, for instance, Cuban Americans to be able to travel to the island and to send remittances to their family on the island.  We received very positive feedback from those initial policy changes.  And the President was committed to pursuing additional steps through his time in office.

However, we had a significant impediment to our ability to pursue additional policy changes with the imprisonment -- wrongful imprisonment of Alan Gross, a USAID subcontractor in Cuba, for over five years now.

So, first, let me walk you through Alan’s release and an exchange of intelligence assets that took place today before getting into the policy changes.  Importantly, we did pursue a swap, an exchange of intelligence assets, including the return of the three Cubans who remained jailed in the United States from the so-called Cuban Five Wasp Network.  They were returned to Cuba this morning.  In exchange, the Cubans released a U.S. intelligence asset who has been imprisoned in Cuba for nearly 20 years.  The identity of this asset will remain secret, but we can provide you with some information about his importance to the United States. 

So this individual was responsible for some of the most important intelligence and counterintelligence prosecutions that the United States has been able to pursue in recent decades.  For instance, he provided the information that led to the identification and conviction of Defense Intelligence Agency senior analyst, Ana Belen Montes; former Department of State official, Walter Kendall Myers and his spouse, Gwendolyn Myers; and members of the Wasp Network in Florida, including the so-called Cuban Five.  So again, this intelligence asset, who was a part of this exchange, provided information that led to the prosecution in part of the Cuban Five.  So his return was particularly important to us.

At the same time, Cuba agreed to release Alan Gross on humanitarian grounds.  And Alan was flown back -- is currently flying back to the United States with his wife, Judy.  Again, we believe Alan was wrongfully imprisoned, and we overwhelmed with joy that Alan will be reunited with his family, particularly in this holiday season of Hanukkah. 

So again, the exchange was the three Cubans who have been imprisoned in the United States for the U.S. intelligence asset who’s been imprisoned in Cuba for nearly 20 years.  And then the Cuban government released Alan Gross on humanitarian grounds.

With that issue resolved, the President is now going to be announcing very significant changes to our Cuba policy.  What we are doing is beginning the normalization of relations between the United States and Cuba.  And I’ll just give the overview of these steps, and then my colleagues can fill in some details.

First, we will be immediately initiating discussions with Cuba to reestablish diplomatic relations that have been severed since 1961.  And so we will enter into discussions with Cuba about reestablishing an embassy in Havana, and we will be initiating high-level contacts and visits with Cuba.  We do so in the belief that there are significant issues where we’d benefit from cooperation, like our current efforts to fight Ebola, where Cuba has dispatched hundreds of health care workers to Africa, but also issues like migration, counterterrorism, drug trafficking, disaster response, where practical cooperation can serve the interests of the United States and Cuba.

At the same time, we fully expect that we’ll continue to have strong differences, particularly on issues related to democracy and human rights.  The United States will continue to promote our values.  We will continue to support civil society in Cuba.  We’ll continue our democracy programming. 

So, again, the fact that we are reestablishing diplomatic relations is, frankly, a better way in our view of advancing our interests and our values.  President Obama has long believed that engagement is a better tool than isolation, and nowhere is that clearer than in Cuba where we have seen a policy of isolation fail for the last 50 years in advancing American interests and values on the island.

Second, the President has instructed Secretary Kerry to review Cuba’s designation as a state sponsor of terrorism.  So that process will be initiated and has to go through a formal review so that we are guided by the facts and the law in making that determination.

Third, we are taking a number of steps to significantly increase travel, commerce, and the flow of information to and from Cuba.  And we do this on the premise that it does not make sense to impose restrictions on the American people and on American businesses that disadvantage the freedom of Americans to travel or the ability of U.S. businesses to operate in Cuba.  And so those -- the steps that we are taking will facilitate greater activity for U.S. persons and businesses, but also, importantly, we believe that by further opening up to Cuba, we will be able to promote openness and reform in Cuba. 

There have been some incremental reforms taken in Cuba in recent years, but clearly we believe that more needs to be done.  Again, however, we believe that openness is a better policy than isolation in advancing the things that we care about in Cuba.  So there will be greater people-to-people engagement and travel opportunity.  There will be the ability for the American people to use credit and debit cards when they travel to Cuba.  We’ll be increasing significantly the amount of money that can be sent to Cuba through remittances.  We will, again, be facilitating increased transactions, including U.S. financial institutions being allowed to open accounts in Cuban financial institutions.  And we will be authorizing increased telecommunications connections between the United States and Cuba.  All of these policy changes my colleagues can go through in greater detail.

In addition, the United States will be participating at the Summit of the Americas in Panama next year, and Cuba will be participating as well.  We are not objecting to Cuba’s participation at the summit.  We are making clear that we believe that democracy and human rights have to be on the agenda at the summit; that civil society has to be included at the summit.

But I would note that in all of his engagements with Latin American leaders, the President has consistently heard of the importance of taking the kind of steps that he is taking today, which we believe will be strongly welcomed across the hemisphere.

Let me just go through a couple other points before turning to my colleagues. 

In terms of how we got to where we are today, the President authorized a high-level channel of communication with the Cuban government last spring.  The individuals on the U.S. side who participated in that channel are Ben Rhodes and Ricardo Zuñiga, the Senior Director for Western Hemisphere here at the National Security Council.

There were multiple meetings with Cuban officials that took place in third countries; I’ll just identify the two principal ones.  Canada hosted the majority of these meetings, and I want to thank the Canadian government for providing its good offices and hosting our discussions with the Cuban government.  Canada did not participate in the substance of the discussions, but they were indispensable in providing a venue and support for these efforts.

Second, and very importantly, the Vatican played a role in this as well.  Pope Francis personally issued an appeal through a letter that he sent to President Obama and to President Raul Castro, calling on them to resolve the case of Alan Gross and the cases of the three Cubans who have been imprisoned here in the United States, and also encouraging the United States and Cuba to pursue a closer relationship.  The Vatican then hosted the U.S. and Cuban delegations where we were able to review the commitments that we’re making today in terms of the exchange of assets, in terms of the release of Alan Gross, and also in terms of some of the other changes in our relations that we’re pursuing.

I’d also note that the Cuban government has made some additional decisions.  These are sovereign decisions of the Cuban government that we have welcomed.  Specifically, the Cuban government agreed to release 53 prisoners whose cases we brought to their attention.  These are individuals that we believe are political prisoners, and we welcome very much their release.  A number of those individuals have already been released, and we expect to continue to see those releases going forward. 

The Cuban government also made it known to us that it is going to be taking steps to increase internet connectivity for its citizens.  This would obviously be a welcomed step.  And with the additional authorization for U.S. telecommunications companies to operate in Cuba, combined with Cuba’s willingness to pursue greater internet connectivity, we believe that the Cuban people will be further empowered.

Lastly, the Cubans are increasing their engagement with the United Nations and with the International Committee of the Red Cross to have discussions about certain conditions within Cuba.  This is an issue that we have consistently encouraged the Cubans to take action on, and so there will be additional visits to come for those two institutions.

Finally, I’d note that President Obama spoke yesterday with President Raul Castro of Cuba to review and finalize the steps that were taken today in terms of the release of the three Cubans in exchange for our intelligence asset and for the release of Alan Gross.  And the President also made clear his intent to pursue these policy changes, but also to continue our advocacy for human rights in Cuba.

With that, I’ll turn it over to my State Department colleague to give a little bit more detail on the State pieces of this.

SENIOR ADMINISTRATION OFFICIAL:  Thank you very much.  Let me just go through a couple of things from the State Department’s perspective that are our responsibility, or our emphasis.

On diplomatic relations let me just say a couple of things.  Obviously, diplomatic -- full diplomatic relations are something that get worked out between two governments.  We’ve agreed to move towards full diplomatic relations, reestablishment of them.  They were broken in 1961, as my colleague mentioned.

As you probably all know, we did not have any presence in Cuba from 1961 until 1977, when we established the Interests Section.  We’ve been under the protection of the Swiss the entire time.  But we will end that relationship and move towards having an embassy and the full normal diplomatic relations.  But those things get worked out between the two governments, and they will -- we will proceed to do so in conjunction with the Cubans.  And we don't know exactly what that timeline will be, but we’ll move towards that as quickly as we can.

The other part of this that is within the State Department’s purview is the review that the President has asked for of the listing of Cuba on the state sponsor of terrorism list.  Cuba has been on that list since 1982.  And we will undertake that review quickly.  But there are many steps that are in the law that we must undertake, and so we will do that, including the consultations with the intelligence community and other steps in the law before we undertake the recommendation that will be made at the end of that process.

Let me also emphasize that I think what my colleague said -- let me emphasize, as well, that it’s important to note that this is being done because we believe the policy of the past has not worked and because we believe that the best way to bring democracy and prosperity to Cuba is to do so via a different kind of policy.  But that does not for a moment believe that we're lessening our emphasis on human rights, on democracy, on the importance of civil society.  Quite the contrary.  In fact, our emphasis on human rights will be just as strong and we believe more effective under this policy.  We will engage directly with the Cuban government on human rights. 

And as an example of that, our principal officer in Havana, Jeff DeLaurentis, will be meeting with members of Cuban society and dissidents later today to walk them through the President’s initiatives of today, and to emphasize to them, as well, that their efforts on behalf of democracy and human rights in Cuba not only won’t be forgotten in these initiatives, but will, in fact, take center stage and a new emphasis, and we believe a new -- get new wind, if you will, by this approach.

Let me also say that one of the things you all know is that our policy and the way we’ve gone about it on Cuba has been a severe problem -- or we’ve been severely criticized for it by most countries, if not all, in this hemisphere.  You may remember that in 2012, when the President attended the Summit of the Americas in Cartagena, this was one of the issues that was universally criticized by countries around the hemisphere, our policy on Cuba.

We believe that this policy shift and the way we will engage the Cuban government in support of democracy and prosperity will greatly help our policy initiatives around the hemisphere and our influence throughout the hemisphere on things that are important to us, including democracy and human rights.  And we expect strong support from governments throughout the hemisphere, both for this policy change and for efforts to support and promote civil society and human rights in Cuba.  So we expect those efforts to be more effective under this policy than they’ve been in the past. 

Let me stop with that.  Thank you.

MS. MEEHAN:  Thank you.  And now we’ll turn it over to our colleague at the Department of Treasury.

SENIOR ADMINISTRATION OFFICIAL:  Thank you and good morning, everyone.  As my colleague noted, the changes that the President will be announcing today aimed at advancing the administration’s policy on empowering the Cuban people, promoting political, social and economic reform in Cuba, and will also pave the way for enhanced commerce and trade between the United States and Cuba in certain areas.  There is a slew of changes that the Office of Foreign Access Control, or OFAC, will be implementing through amendments to our Cuban assets control regulations to give effect to these changes, and I expect to see those changes made in the coming weeks. 

To give you a little bit of detail, in 2011 we took steps to ease travel restrictions, in particular with respect to Americans’ ability to visit family in Cuba, generally licensing such travel.  We will be easing travel in the coming weeks across all of the 12 categories for which OFAC has historically issued licenses.  Those categories are family visits; official business of the U.S. government, foreign governments and international organizations; journalistic activity; professional research and professional meetings; educational activities, religious activities, public performances, workshops, and other competitions and expeditions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; export-import of the transmission of information or informational materials, as well as certain export transactions that may be considered for authorization under the existing guidelines. 

Under these new forthcoming regulations, travel to Cuba for tourist activities, which Congress has defined as activities outside of these 12 categories, will remain prohibited.  Concerning remittances, we had already eased in 2009 restrictions on non-family remittances to allow individuals in the United States to send up to $500 to any Cuban national, with the exception of Cuba government or communist party officials per quarter.  The President will be announcing that we will be increasing that amount to $2,000 per quarter.  Notably, donated remittances for humanitarian projects, support for the Cuban people, and development of private businesses in Cuba will be generally licensed with no limitation on amount. 

Another very important area in which we will be easing restrictions is increasing communication and access to communication technology for the Cuban people.  Telecom and Internet linkages between the U.S. and Cuba, including infrastructure related to those linkages in Cuba, will be authorized without requiring a specific license from OFAC.  These steps build upon efforts initiated in 2009 to facilitate the increase flow of information to and from the island. 

The regulatory definition of cash in advance, a provision that regulates payment for the export of agricultural and medical goods from the U.S. to Cuba, will be changed to a cash before transfer of title definition.  This will allow U.S. exporters to be more competitive with respect to their exports to Cuba, and will generally permit the export of agricultural products to Cuba so long as payment is received prior to the goods arrival at a Cuban port of entry.

U.S. travelers to Cuba will be permitted to import into the United States merchandise as they bring back with them with a value of up to $400 per person.  Included in this new provision will be an allowance of up to $100 per person of alcohol or tobacco products.  I also want to note that we will be issuing new regulations to allow U.S. banks to establish correspondent accounts with Cuban banks.  U.S. financial institutions will also be authorized to facilitate the use of U.S. credit and debit cards by travelers in Cuba. 

These changes will ease the flow of remittances to, and authorize transactions with, the Cuban people.  This also means that those who do trade with Cuba -- for example, in the areas of agricultural medicine and medical products, telecommunications, et cetera -- will have a much easier time doing so, and the financial easing will facilitate a number of the changes that I outlined above.

As I noted earlier, the regulatory amendments are currently in development and you will see these changes in the coming weeks, along with detailed guidance.  These changes will not take effect, however, until the new regulations have been published, and we will take every measure possible to keep everyone apprised of developments.  Thank you.

SENIOR ADMINISTRATION OFFICIAL:  Great.  We’ll go to Commerce now.

SENIOR ADMINISTRATION OFFICIAL:  Hi, Secretary Pritzker strongly supports the President’s initiative to spur long overdue economic and political reform in Cuba.  She believes that commercial diplomacy initiatives outlined today will strengthen human rights and the rule of law.  She believes that economics and more commercial engagement have the power to change lives for the better, and she looks forward to the opportunity to visit -- to do a commercial diplomacy visit to Cuba as part of the President’s initiative to encourage positive change in Cuba.

Specifically, the Commerce Department will be issuing regulations that will authorize for export certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.  These changes will make it easier for Cuban citizens to have access to lower-priced goods to improve their living standards, gain greater economic independence from the state, and overall develop the private sector in Cuba.

In addition, regulations also will be issued to facilitate export of telecom devices equipment, including related hardware, software and services in order to enhance communications to and from Cuba and among the Cuban people.

Q    Hi, guys.  Thanks for doing the call.  I wonder if, one, you could talk a little bit more about President Obama’s call with President Castro yesterday, how long it lasted and what else was discussed.  Is there any plan for them to talk again in the future?  And then, secondly, on these talks that have taken place since the spring, mostly in Canada, could you elaborate a little bit more on that, how that took place?  And was there a key moment -- what happened that made today happen?  In other words, was there a meeting last week?  What was the final critical stage that pulled all this together?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Peter.  On the first question, the call yesterday I think lasted between 45 minutes and an hour, and it was obviously the first engagement at the presidential level with Cuba since the Cuban Revolution.  And President Obama went through the swap and the release of Alan Gross, and then discussed the changes that he would be announcing today.  They discussed the potential for cooperation on issues like Ebola, issues in the hemisphere, issues like counterterrorism and counter-narcotics.  At the same time, the President did underscore that we would continue our support for democracy and human rights in Cuba.

Again, President Castro reviewed the steps that Cuba is taking, and I'll leave it -- I believe President Castro is making a statement later today, so I won't go into too much detail about what he said.  We tend not to do that with calls with foreign counterparts.  But suffice to say, they were summing up the work that's been done through the channel over the course of the last -- over a year now, as well as looking forward to the announcements today, while noting that we understand we're going to continue to have differences.  So this change doesn’t negate the fact that the U.S. and Cuba are going to have strong differences on the Cuban political model and on aspects of foreign policy, both U.S. and Cuban foreign policy.  So they had areas of agreement and areas of difference that they went through on the call.

With respect to the channel, I could give a couple more details.  This was initiated when the President authorized exploratory discussions with Cuban officials in the spring of 2013.  We have multiple ways of communicating with Cuba, through our Interests Section in Havana and those here in Washington, and we interacted -- our missions in New York.  So we have the ability to pass messages, and so we initiated this contact with the Cuban government last spring.

The first face-to-face discussions with the Cubans took place in June of 2013 in Canada.  And again, Canada was the principal venue for a series of discussions that took place between June of 2013 and November of this year. 

In terms of critical meetings or junctures, I'd just note a couple things.  One, it was very important to us that we recover this intelligence asset for a couple of reasons.  Obviously, we’ve wanted Alan Gross to be released for five years now.  We rejected the notion that Alan Gross was an intelligence asset, so we were not going to engage in a swap of intelligence assets that involved Alan Gross directly.

Number two, this intelligence asset did heroic work for the United States at great risk to himself, enabling the prosecution of a number of individuals, including the Cuban Five.  And he’s been in a Cuban prison for nearly 20 years, and so our ability to recover him was an important principle for us in those discussions.  But also, this was an opportunity to review broader aspects of our relationship, areas of agreement and disagreement, to get a sense from Cuba of the steps that they are contemplating taking, and the release of a certain number of prisoners was important to us, but also to explore with them areas of practical cooperation and the types of steps that President Obama is announcing today.

An important meeting, and I guess where you could say this all was finalized, was hosted by the Vatican.  So senior Vatican officials received both the U.S. and Cuban delegations this fall, and essentially the Vatican was a venue for the U.S. and Cuban sides to present their commitments and to finalize the types of steps that are being taken, including obviously the prisoner transfers.  And the support of Pope Francis and the support of the Vatican was important to us, given the esteem with which both the American and Cuban people hold the Catholic Church and, in particular, Pope Francis, who as you know has a substantial history in Latin America -- the first Pope to be chosen from Latin America.  So President Obama has enormous respect for Pope Francis and his personal engagement in this was important to us.

When President Obama met with Pope Francis, for instance, earlier this year, Cuba was a topic of discussion that got as much attention as anything else that the two of them discussed.  So I would say that particularly the exchange and transfer of prisoners was finalized in that meeting at the Vatican, but we also were able to review the steps that we’d each be taking with the Vatican, including the normalization of relations between the countries and the establishment of diplomatic relations.  And the Vatican welcomed that news.

I’d just note that there were no meetings that took place in either Cuba or the United States in this channel, and I’d also just note that we are not going to characterize the Cuban participation just because that’s our principle in terms of these types of negotiations.  That’s what we did with respect, for instance, to the work that Jake Sullivan and Bill Burns did with the Iranian side in the lead-up to the Joint Plan of Action last year.

So with that, we’ll move to the next question.

Q    Can you talk about the timeframe or the opening end of this?  Does this have to follow the sort of the (inaudible) to what happened with Vietnam?  When would you expect to actually have restoration of diplomatic relations?  And will the President be trying to overturn Helms-Burton?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Andrea.  So the decision has been made to establish diplomatic relations by both President Obama and President Castro.  So we’ve decided to establish an embassy, we’ve decided to restore diplomatic relations.  So it’s, frankly, just a matter of going through the process -- logistical and otherwise -- of formalizing that decision.  So I can’t put an exact timeline on it, but we expect to do it as soon as possible.  But for your purposes, I mean, I think you can characterize this as a decision that has been made that will be taken. 

And now, with the announcement today, what that will do is set in motion discussions that can take place between the Department of State and then reps in Cuba to resolve any specifics related to the establishment of a U.S. embassy in Cuba and a Cuban embassy here in the United States.  That shouldn’t be too difficult, given the fact that we already have a very significant Interests Section in Cuba.  So we have a presence there, but we are now going to transition that into an embassy.  So I can’t put an exact timeline on it because the discussions are just being initiated today, but the discussions are taking place with both Presidents having taken a decision to establish diplomatic relations.

The second question was Helms-Burton.  Look, we start from the premise that -- the President does -- that the collective policy known as the embargo hasn’t worked, so we support efforts to remove those restrictions.  However, we understand that Congress is unlikely to take those steps in the immediate future.  So what we’re doing today is acting within the boundaries of the law to substantially increase travel, investment, commerce with Cuba through what the President can do.  At the same time, we’d encourage members of Congress to look at what they can do to support the direction the President has set today.

And again, our belief is that -- as with the family travel and remittances -- it will become evident that there are benefits in this type of engagement, and that already there is support in Congress on a bipartisan basis for a new approach.  But there’s also strong opposition.  So there will be a debate that takes place.  But we believe that the utility of these policy changes will become evident and will hopefully create greater momentum for legislative action going forward.

I’d also note that attitudes have been changing.  The Cuban American population, particularly younger generations of Cuban Americans have increasingly supported greater openness.  That's something that President Obama personally experienced in his contacts with Cuban Americans and in his travels to places like Florida and New Jersey and in the 2008 and 2012 campaigns.  So there’s been a continued evolution of public opinion, of opinion in the Cuban American community. 

But if you look at the constituency for this type of change, it involves many different elements of American society:  Cuban Americans; the Catholic Church has been very supportive; the U.S. business community has been very supportive of the type of changes that we're announcing today.  So again, we believe that there is a substantial constituency and multiple constituencies for this type of change.  And that too will shape the dynamic in Congress going forward.

Next question.

Q    Hey, guys, thanks for doing the call.  Just wondered if you could follow up on the Congress question.  Do you know if the President has talked to the new Republican leadership about this and asked them for anything in terms of a timeline on moving forward on lifting the embargo?

And then, I’m also curious -- there’s been a lot of reporting from some of my colleagues on some USAID programs that have been pretty controversial in Cuba.  Does that factor into these discussions at all?  And is Raj Shah’s decision to leave the administration part of this negotiation?

SENIOR ADMINISTRATION OFFICIAL:  So on your first question, Julie, the President has had a number of conversations with members of Congress leading up to this decision.  And he and other administration officials have briefed multiple members of Congress, including the leadership and key committee members and key members who focused on Cuban American relations.

Again, we're not focused today on legislative action; we're focused on what the President can do.  So he’s not sought to initiate any process with respect to the lifting of the embargo.  Again, I think he’s signaling with the actions he’s taking today that he does not think that policy has succeeded, and we’d welcome efforts in Congress to end those restrictions.  But we're not focused today on calling on Congress to take a particular action.  We're focused on communicating this new direction for U.S. policy.

I’d also note that in terms of the recovery of Alan Gross, we had Senator Flake, Senator Leahy and Congressman Van Hollen travel on the plane to get Alan.  And that's indicative of bipartisan support in Congress for not just Alan’s recovery, but for the types of changes that we have announced today.  Alan will also be greeted at the airport by a group of members of Congress.

And I’d like to thank really a broad group of members of Congress who have advocated for Alan’s release, but also for these types of changes we're announcing.

With respect to USAID, Raj’s departure had absolutely nothing to do with this.  He had long planned to leave around the end of this year.  We’ve known that for some time now.  So it’s merely a coincidence of timing.  Raj, by the way, has done extraordinary work as USAID Director and we’ll certainly have more time to honor his contributions.

With respect to the democracy programming, it did factor into the discussions.  The Cubans do not like our democracy programming.  They consistently protest those initiatives, not just in our channel, but in other diplomatic engagements with the United States. 

Again, we made clear that we’re going to continue our support for civil society for the advancement of our values in Cuba.  So really, that was an issue of difference that we will continue to have with Cuba, and we fully expect them to raise those issues just as we will raise issues with the Cubans about democracy and human rights.  However, we’re going to do that through a normal relationship.  We’re going to do that through our embassy in Havana.  We’re going to do that through contacts between our various agencies.

This does not need to be a relationship that is frozen in time.  If there is any U.S. foreign policy that has passed its expiration date, it is the U.S.-Cuba policy.  And what we’re focused on today is turning the page to a new chapter where we’ll be more able to raise directly with the Cubans our concerns, and, frankly, they’ll be more able to directly raise with us their concerns.  And frankly, that can avert hopefully the type of scenario we had with Alan Gross.

Q    Thanks.  Just briefly, could you talk about the timing of the Pope’s letter?  And then also, could you give a little bit more color about the upcoming OAS Summit and how much of a -- how awkward the existing U.S. policy would have been, how much pushback there would have been?  Would the President not have even been able to attend that summit, or what would that have been like had you not made this change?

SENIOR ADMINISTRATION OFFICIAL:  Good questions there.  The letter followed the President’s meeting with Pope Francis.  So they discussed these issues.  I think Pope Francis got a sense that President Obama was contemplating these types of changes.  We had already initiated discussions with Cuba, but Pope Francis then decided to make a personal appeal, which is very rare.  We haven’t received communications like this from the Pope that I’m aware of other than this instance.

And so he sent that letter directly to President Obama, and separately he communicated through a letter directly to President Castro early this summer following the meeting.  And that gave I think greater impetus and momentum for us to move forward.  And then of course, the Vatican hosted the two delegations, and they were the only government, I should note, that participated in these discussions.  Canada hosted talks, but when we met at the Vatican with the Cuban side, Vatican officials were in that meeting, and so they were able to participate and express their support for these steps.

With respect to the Summit of the Americas, it is a huge burden, if not an albatross, on our relations in the hemisphere.  The last Summit of the Americas, instead of talking about the things that we were focused on -- exports, counter-narcotics, citizen security -- we spent a lot of time talking about U.S.-Cuba policy.  And frankly, any of you who cover the hemisphere know that a key factor in every bilateral relationship we have -- including with our closest friends in the hemisphere -- is when are you going to change your Cuba policy. 

And so we believe that this substantially opens the door for the United States in the hemisphere.  This could be a transformative event for the United States in Latin America, and I think that will be a very positive aspect of this policy.  And frankly, for us, it’s not just about Cuba, it’s about Latin America broadly.

I would also add that, having taken these steps, we’ll also be saying to our friends in the hemisphere that we all need to be raising human rights with the Cuban government; that, frankly, there will no longer be this focus on American policy.  We’ve changed that.  And now we can focus on discussing issues we care about and that includes human rights.  So we believe that there’s opportunity in that respect, as well.  And the summit in Panama will be an opportunity to advance those discussions. 

But again, we believe that this is going to be a very important issue in terms of increasing our engagement in Latin America, and it positions the United States to advance our interests and our values more effectively without us being the issue, without our Cuba policy consistently being the issue. 

Just one additional in terms of international fora.  There’s the annual vote on whether or not the U.S. embargo should be lifted at the United Nations.  That took place earlier this year.  I believe the vote was something along the lines of 192 to 2.  I think we were joined by Palau in that vote.  The rest of the world has gone from this set of policies, and I think this will be good for the United States and not just the hemisphere, but in the world and in international fora generally. 

Next Question.

Q    Hello, yes, thank you for doing this.  I was wondering if in the past, Congress, and especially led by Cuban American lawmakers, have (inaudible) at this by the Obama administration to ease restrictions on travel and remittances.  I was wondering if you reached out to them and what has been their response in terms of all these new efforts being announced today.  And also, can you confirm that, in fact, there was a swap -- because I’ve seen media reports that Alan Gross’s freedom was not a swap, so can you clarify that please?  And thank you so much for doing this again.

SENIOR ADMINISTRATION OFFICIAL:  Yes, no I'm happy to clarify that.  There was a swap for the three Cubans in exchange for the U.S. intelligence asset who’s been detained in Cuba for nearly 20 years.  That was a swap.  Alan Gross was not a part of that exchange because he’s not an intelligence agent, but the Cuban government took the decision to release Alan Gross on humanitarian grounds.  That’s the basis for their decision to release Alan.  So it's a swap -- three Cubans who were intelligence assets for Cuba and who have been imprisoned here in the United States for over 15 years for the U.S. intelligence asset who’s been imprisoned in Cuba.  And then Alan Gross was released concurrently this morning as a humanitarian step by the Cuban government.

With respect to Cuban American members of Congress, look, we respect the passion of those who have been advocates for change in Cuba.  We recognize that some members of Congress, including some Cuban American members of Congress, will strongly disagree with elements of what the President is announcing today.  But this is going to be a continued dialogue, and our point is going to be that we’re taking these steps because we care about the same things.  We care about the Cuban people.  We care about human rights.  And we believe that the current approach isn’t working and that a policy of engagement is going to be more effective.

However, as we engage Cuba, as we establish an embassy, as we prepare for the Summit of the Americas, we want the Cuban American community broadly to be partners in setting the agenda and communicating to us what we need to be concerned about.  But with respect to the President’s authority, we are acting within the limits that have been set by Congress but we believe and are certain, and we’ve done the appropriate reviews inside the government, that the President has the authority to announce the steps that he did today. 

For instance, diplomatic relations -- that’s an area that falls fully within the purview of the President.  The SSOT list, we’ll make a determination based on the facts.  And then these regulatory changes that will facilitate greater commerce and travel, we are acting within the boundaries that have been set and so we’re confident in our ability to take these steps.

We’ve got time for a couple more questions.

Q    Regarding the trade portion of this plan, how would you characterize how open trade will be with Cuba?  Is there any estimate on the potential market for U.S. exporters?  And then, finally, what about the Cuban side?  Are we going to be able to buy Cuban cigars?

SENIOR ADMINISTRATION OFFICIAL:  I’ll turn this to my Treasury and Commerce colleagues to start.

SENIOR ADMINISTRATION OFFICIAL:  This will open up certain kinds of products that will be mainly used by the private sector within Cuba, which only recently has initiated and is growing.  It will be residential construction, goods used by private sector Cuban entrepreneurs such as restaurants, barber shops, small business operators, and agricultural equipment for small farmers.  So it is designed to strengthen civil society and the private sector.

In addition, there is a focus on telecommunications equipment and facilitating exports of goods and services that will enable the country to improve its telecom and IT infrastructure.

SENIOR ADMINISTRATION OFFICIAL:  To give you some round numbers for dollar values, last year, in 2013, we at Commerce issued licenses for almost $300 million worth of commercial sales for medical products alone and about $3 billion of agricultural exports.  So just in those two areas that have already been authorized, there are some substantial potential.

SENIOR ADMINISTRATION OFFICIAL:  And the regulatory changes being announced today will be implemented through new regulations, but they will facilitate the ability to do exports by making the opportunity to do that more general and have more general authority to do that, rather than having to apply for specific licenses each time.  

SENIOR ADMINISTRATION OFFICIAL:  This is from the Treasury Department.  I would just respond to the final part of the question.  Authorized travelers to Cuba we allow to return with $400 worth of general goods and up to $100 of alcohol or tobacco products.  That can include cigars.  But that authorization is for personal consumption; that is not for resale or commercial purposes. 

SENIOR ADMINISTRATION OFFICIAL:  I would just add one more piece to that, which is that existing authorized trade for food and medicine, but particularly for agricultural goods, is going to be facilitated by a number of the measures that are going to be undertaken by the Department of the Treasury, particularly with respect to the cash and advance rule for agricultural sales.

Q    I’m not quite sure you fully answered Angela’s question about buying Cuban cigars.  Not to take it to that level, but there are some of us who would probably like that answered question -- that question answered.  It sounds like from what you’re saying that the importing of Cuban goods is still going to be restricted by the embargo.  And is the travel ban on American travel to Cuba being lifted here, or is that still being constrained by the embargo?  And I just wanted to know if Fidel Castro was involved.  Was Fidel Castro involved in any of these conversations that led up to today’s announcement?  Thanks very much for doing the call.

SENIOR ADMINISTRATION OFFICIAL:  Jim, I’ll start.  And again, I know you’re a proud Cuban American.  With respect to the travel, we cannot completely lift the travel ban because of the legislation.  However, what we’re doing is we’re authorizing as much travel as we possibly can within the constraints of legislation.  So every kind of travel that can possibly be licensed we are now permitting.  And so that should lead to a significant ability for Americans to travel to Cuba for the broad variety of purposes that were outlined earlier in the call.

So the ban has to be lifted by Congress, but the President is doing everything that he can with his authority to facilitate travel within the limitations of the law.  And we believe that that will lead to a significant increase in travel.  We’ve already seen Americans take advantage of the more limited licensing that has facilitated travel to Cuba.  With these steps, there is a significant broadening to include every kind of travel that is licensable under the law, and that should lead to an increase in Americans traveling.

Fidel Castro was not involved in the discussions.  President Raul Castro obviously was the individual on the Cuban side who was authorizing his team and the person who communicated with President Obama yesterday.  The Cuban side can speak to their decision-making process.  But clearly, Raul Castro is the President of Cuba now and is the decision-maker on these steps.

And then I’ll turn it over to my colleagues on your question.  But again, you are permitted to purchase tobacco products, including cigars up to a certain amount, so that may be the answer you're looking for.  But I’ll turn it over to my colleagues.

SENIOR ADMINISTRATION OFFICIAL:  Yes, so that amount is $100 if you're an authorized traveler.  So if you're going under any of the categories that my colleague and I have outlined, you can purchase up to $100 of tobacco products to bring back to the United States -- but not for resale -- for consumption or for personal use.

With respect to the travel categories, I do want to just correct a misstatement I made at the very outset in my opening remarks.  There have been two prior relaxations by President Obama with respect to travel:  2009 generally focused on family travel, and 2011 focused on a number of other categories, including educational, cultural, religious, and journalistic activity.  And I had put the 2011 date on family travel.  I just wanted to be sure I corrected that.

MS. MEEHAN:  Thank you, everyone.  With that, our call is concluded.  Just to reiterate the ground rules on -- the embargo on this call is now lifted.  The embargo on the White House factsheet is also now lifted.  But you can only quote the officials on this phone call on background and attributed to senior administration officials, rather than by name.

Thank you very much.  Have a great day.

END
11:02 A.M. EST