We were at Guantanamo Bay (on the Cuban side) on Monday, the day that the US and Cuba formally re-established diplomatic relations with a ceremony in Havana, on the opposite side of the island.Well, anyone could see the official ceremony on television.

What you cannot see on television is the sense of anger and humiliation in the eyes of Cubans when you mention Guantanamo.

On the road out of Guantanamo City there is a lookout on some high ground. It is not quite high enough, so someone has built a small tower and an enterprising young man was charging tourists (all non-US) for access to the tower, the use of binoculars and a bit of commentary along with a folder of aerial photographs of the US-leased area taken with huge telephotos lenses.

From the tower you can just glimpse the radar domes of the US base and not much else.

Every map you see describes the US base as: “Territorio occupado ilegalmente por los EUA.

”In the 19th century the US always had its eye on Cuba – wanting to buy it from Spain or least wanting to dominate the island economically and militarily.

Granting the lease over the exquisite port at Guantanamo to the US in 1902 was the price Cubans had to pay for independence after Spain had ceded the island to the US in 1898 after its loss in the Spanish-American War. 

Cuba has long regarded the occupation as illegal and since 1959 has refused to accept payment of rent on the lease.

So, on Monday the thaw in Cuban-US relations began. But there is a long way to go.

Travel and trade bans (referred to by Cubans as “the blockade”) continue. Removing these will be more difficult than the presidential decree establishing diplomatic relations, because a great part of them are in half a dozen pieces of legislation.

Congress will have to repeal the laws if there is to be full free trade and travel. That will be difficult while ever the Republicans are beholden to a voting rump of right-wing Cuban exiles, mainly in Florida, a key Electoral College state in presidential elections.

Unfortunately, it is not just a question of the Cubans saying, to use the words of Ronald Regan in Berlin: “Tear down this embargo, Mr Obama.” – even if the demand has equal moral force.

The nastiest elements of the embargo are the Helms-Burton Act and the Cuban Democracy Act which impose penalties on any company anywhere that does business in the US and dares also to do business with Cuba. These Acts also severely infringe the rights of individual US citizens who wish to travel to Cuba – all in the name of human rights and democracy, of course.

The embargo is utterly hypocritical and completely ineffective. The US is supposed to be the great promoter of free trade as the means of improving the lot of all parties who trade.

Trade generally does that. Equally, the denial of it impoverishes both parties. Economists might call it the law of comparative disadvantage.

The US can afford it economically (perhaps $1 billion a year), but the moral impoverishment it causes the US is another matter. More importantly, the embargo causes shortages of a large array of necessities and consumer goods in Cuba, causing great and unnecessary hardship.

One Cuban told me, “We don’t care about the US, but they should not prevent other foreign companies from trading with us.”

Quite right. If a company tried to do that in Australia, it would be a criminal breach of the Australian Consumer and Competition Act.

The Europeans are also outraged at the extraterritoriality of the embargo. They feel they should be allowed to trade with whomever they like, and that their US transactions should not be jeopardised by the mere fact they also trade with Cuba. That is none of the US’s business, they quite rightly argue.

You can tell that the embargo is nothing but number-counting politics bereft of principle. If the US were so concerned about trading with nasty communist regimes, why does it engage in lucrative trade with Vietnam – a communist nation with which it fought a protracted war?

Defenders of the embargo say that Cuba confiscated the property of US companies and citizens after the revolution without compensation – now valued at about $6 billion. Maybe so. Equally, the US froze Cuban assets.

But that was all half a century ago. The shareholders of the companies have long since changed. The individuals are dead. And in any event, the second casualty of any war or revolution is property.

The embargo has been worse than ineffective. Rather than undermine the communist regime, it has increased its resolve and the resolve of its resourceful and resilient people. 

Everywhere you go in Cuban you see proud (if somewhat overdone) revolutionary slogans painted on walls and some billboards (though nowhere near the number of inane advertising billboards you see in the west).

Moreover, the embargo gives the Cuban regime the perfect external-enemy scapegoat so needed by any government wanting to distract the people from its own shortcomings.

The embargo serves the interests of no-one but a few voter number-crunchers in Florida.

Some Cubans are exited at the prospect of better trade relations with good reason. Others are worried. They do not want to see the loss of what they see as the benefits of socialism – free universal health care and education. It is a justifiable concern when you see the trend of big business in many nations pressuring governments to privatise health and education to the detriment of most people.

It would be terrific if Cuba could get the best of both worlds. Its education and health care rate are in the top one or two among Latin American countries. Cuba spends 10 per cent of GDP on education. Australia could well emulate that.

That is Cuba’s greatest resource. If the embargo goes, that education combined with foreign investment will enable Cuba to take off.

It would also help end the chronic lack of incentive in government-owned “enterprises” and chronic underemployment in paying five or six people to do what one or two could do.

One of the great ironies and tragedies of Fidel Casto’s rule has been that in attempting to free Cuban workers from the yoke of colonialism and imperialism, so many very well-educated Cubans are now desperate to get into any job in foreign tourism where the convertible-currency tips from foreigners (however uncertain in timing and quantity) outweigh the pathetic government wages in any sector of the economy. Too many economists, engineers and teachers are guides and taxi drivers.

Meanwhile, the huge well-kept 1950s American cars ply Havana streets as a symbol of Cuba’s economic isolation. But there is a more powerful metaphor in those cars. If you lift the bonnet of nearly any one of them you will find a much newer Japanese or Korean motor underneath got though expensive third party sources.

The charade of the US embargo surely cannot go on for much longer. An engine simply will not last that long, however glossy and well-painted the exterior might be.