The United States will restore full diplomatic ties with Cuba, a historic step in healing divisions between the two nations that have lasted for more than half a century.

In a dramatic shift after decades of both frost and hostility, U.S. President Barack Obama announced an end to an “outdated” approach that will see the reopening of the U.S. embassy in Havana along with an easing of travel and commerce restrictions. He also suggested he will push Congress to end the U.S. trade embargo against Cuba, which has contributed to crippling the island’s economy since the early 1960s.

WHAT HAS CHANGED?

• the U.S. will soon reopen an embassy in the capital, Havana
• the U.S. will ease travel bans to Cuba, including for family visits, official U.S. government business and educational activities, but will not lift its ban on tourist travel
• licensed American travellers to Cuba will now be able to return to the U.S. with $400 in Cuban goods, including tobacco and alcohol products worth less than $100 combined
• the amount of money Americans can send to Cubans will increase from $500 to $2,000 every three months
• the U.S. will unfreeze the U.S. bank accounts of Cubans who no longer live in Cuba
• U.S. Secretary of State John Kerry will launch a review of Cuba’s designation as a state sponsor of terror

Just 140 kilometres separate the two countries, but the ideological rift has been much wider. Their shared history reads like a novel encompassing spies, CIA assassination plots with exploding cigars, a missile crisis that brought the U.S. and Soviet Union to the brink, Cold War tactics, secret Vatican diplomacy and the two grizzled Castro brothers, who outlasted 10 American presidents.

Mr. Obama’s announcement came after the release earlier Wednesday of American contractor Alan Gross, who had spent five years in a Cuban prison.

On the same day, the U.S. released three Cubans convicted of spying who were jailed in the United States – the last of the “Cuban Five” depicted as heroes in murals across the Communist-ruled island. In exchange, Cuba released a prisoner who had worked for U.S. intelligence.

“Isolation has not worked,” the U.S. President said. “I do not believe we can keep doing the same thing for over five decades and expect a different result.”

In many respects, it is the United States that has found itself isolated in its position on Cuba. The United Nations General Assembly has voted 23 times to condemn the U.S. embargo against Cuba. At its last vote in October, 188 countries voted in support of the resolution to end the embargo. Only two opposed it: the U.S. and Israel.

The thaw “is extraordinary,” said John Kirk, a professor at Dalhousie University who has written several books on Cuba and has been going there since 1976. “The whole world has been waiting for this to happen.”

In Havana, church bells tolled and some citizens cheered at news of the release of the remaining three prisoners of the Cuban Five. In a speech televised at the same time as Mr. Obama’s, Cuban President Raul Castro said the two countries can work together in a “civilized manner,” despite their differences in areas such as human rights.

The U.S. broke diplomatic relations with Cuba on Jan. 3, 1961, after the nationalization of American assets without compensation. Its embargo – or blockade as Cubans call it – forbids almost all trade and travel to the country.

“Re-establishing diplomatic relations is going to open doors to much more rational discussion in the future,” said John Price, Miami-based managing director at Americas Market Intelligence. “There are lots of people in both countries who realize the embargo is doing more harm than good, but there’s also some people who politically exploit the embargo in both countries and they are the ones who are hesitant to change.”

Cuba is home to just 11 million people but it carries a far greater geopolitical weight in the region, and the move will bolster U.S. relations with Latin American as a whole.

“Cuba has always been a sticking point for relations between the United States and Latin America,” Mr. Price said. “Latin Americans continue to band together to oppose the U.S. in the UN and in other voting blocs, around the embargo, which they’ve always considered to be illegal, and unjust. So that’s certainly going to alleviate some tension.”

It takes away ammunition among left-leaning or statist parties or governments in Latin America. “It’s [now] a lot harder to demonize the U.S. and gain political favour domestically by doing so.”

Canada played a key role in the lead-up to this week’s announcement. U.S. and Cuban officials have been in talks for about 18 months – and Canada hosted and facilitated most of the meetings, a U.S. representative said. Mr. Obama thanked Pope Francis for his efforts in urging reconciliation and the government of Canada.

Mr. Obama also pledged to help expand Cuba’s Internet access, which is now slow, sporadic, limited and expensive. Travellers will be able to use American credit and debit cards while in Cuba. Mr. Obama is also ordering a review of Cuba’s designation as a state sponsor of terrorism.

The shift has longer-term implications for Canada and Canadians, who are the top tourists to Cuba. About 1.4 million Canadians visit Cuba’s white-sand beaches and old Havana’s cobblestone streets each year and they will, eventually, find their holiday destination a lot more crowded. It could also mean increased competition for Canadian businesses there – and diminished diplomatic clout in Havana.

The opening will bolster Cuba’s anemic economy, injecting much-needed cash into its system through more remittances, more visitors to the island and eventually more foreign direct investment. It will also affect Americans, more of whom will finally be permitted to travel to Cuba for professional or educational reasons(the ban on tourist travel still stands).

The announcement triggered outrage among some Republicans and will doubtless be a subject of heated debate in the 2016 presidential race. It also set off small protests in Miami. But even there, public opinion about the embargo has shifted significantly. A majority of Cuban-Americans in South Florida now oppose continuing the embargo, a poll this year by Florida International University showed. “The main trend has been a growing erosion for support of the embargo,” said Jorge Duany, director of the university’s Cuban Research Institute. “The embargo has lost a lot of clout it had among Cuban-American voters, particularly the more recent immigrants and younger second-generation Cuban Americans.” The poll, conducted since 1991, “shows increasing support for engagement rather than isolation.”

It is not clear what the opening with the U.S. will mean for Cuba’s one-party political system, run with an iron hand first by Fidel Castro and now, with a looser hand, by his brother Raul. It continues to have a poor human-rights record. Reporters Without Borders puts it in 170th spot of 180 countries in its index of press freedom.

“It’s going to profoundly transform and challenge the way Cubans think about their nation and its relationship with the outside world,” said Jason Colby, associate professor at the University of Victoria who specializes in U.S.-Latin American relations.

That’s because “the touch-point of Cuban identity and Cuban government’s legitimacy has been the argument that we’re under siege from the United States and we’re protecting you from American imperialism. So when that vanishes – and kudos to Raul Castro for having the courage to open this up – when that central pillar of your government’s legitimacy gets removed, it opens the question of what is the basis of the revolutionary regime’s power and legitimacy now?”

TAVIA GRANT
The Globe and Mail
Published Wednesday, Dec. 17 2014, 9:09 AM EST
Last updated Thursday, Dec. 18 2014, 1:15 AM EST