On Tuesday, Republican U.S. Representative Tom Emmer introduced the Cuba Trade Act of 2015, a bill intended to lift the United States' 54-year trade embargo on Cuba. The bill is one of several legislative efforts introduced over the past year to end the trade ban. Lifting the embargo is the next logical step in the United States' eight-month outreach to Cuba. U.S. President Barack Obama has already issued directives to expand financial interaction with Cuba and make it easier for U.S. citizens to travel to the island country, but presidential power only goes so far. According to U.S. law, much of the authority to amend or annul the provisions of the embargo depends on Congress' determination that a transitional government is in place in Havana. Consequently, the law must be changed if the United States is to proceed with lifting the embargo anytime soon.

With Cuban President Raul Castro stepping down in 2018, the United States could wait until then to see if Cuba meets the legislative criteria to lift the embargo. A second option, which Emmer and others are promoting, is for Congress to amend the law underpinning the embargo, thereby removing the legal rationale for maintaining the ban. Both options would eventually require negotiations within the Republican-controlled Congress and perhaps with Cuba. However, if resistance within Congress wears down, the second option could result in the embargo being lifted before Cuba's transition of power in 2018.

For Cuba — a capital-poor island only 90 miles from the world's largest economy — lifting the embargo would bring significant economic benefits. The Cuban government is eager to shift away from its state-led economic model toward a more sustainable system that allows Cuba to generate more wealth domestically and reduce its dependence on external patrons. But even with Washington's growing will to lift the embargo, Havana will not be in a position to receive the full benefits of economic trade with the United States for several years.

Even if Congress begins serious deliberations on lifting the embargo after its August recess, the main impediments to Cuba expanding trade ties with the United States are mostly internal economic considerations. Despite Havana's greater attempts to spur the national economy, starting with the legalization of Cuba's informal business activity in 2010, the imbalances created by five decades of economic isolation will remain the principal constraints on Cuba's economic growth. The Cuban government is by far the largest employer on the island, and state-owned exporting businesses (as well as limited joint ventures with foreign firms) are highly inefficient compared to foreign competitors. Cuba's two-tiered currency exchange rate also creates significant distortions and dissuades foreign investment. Moreover, the country's restrictive foreign investment law, which taxes foreign-owned firms heavily and limits international arbitration to settle disputes, is a major drag on foreign investment. If Congress lifts the embargo and travel ban in the near term, Cuba's elites will still benefit from increased tourism (already a multi-billion dollar industry controlled by Cuban military firms), although they likely will continue missing out on potentially higher-value economic activity for years.

Over the next few years, the Cubans will likely turn their attention to addressing these issues, and the end of the embargo would add to the sense of urgency surrounding economic reform. The Cuban government already plans to have a legal draft in place for the unification of the dual currency rates by sometime in 2016. But the pace of Cuba's opening to foreign capital will ultimately depend on whether the U.S. proposals to end the Cuban embargo come to fruition in the next few years.