(Updates Cuba reaction)

By Matt Spetalnick

WASHINGTON, April 8 (Reuters) - The Trump administration on Monday scrapped a historic agreement between Major League Baseball and the Cuban Baseball Federation that would have allowed Cuban players to sign with U.S. teams without needing to defect.

The existing deal will not be allowed to go forward because it was based on an erroneous ruling by the former Obama administration that the Cuban Baseball Federation was not part of Cuba's Communist government, a senior U.S. official said.

The move essentially overturns an agreement reached between MLB and the Cuban federation in December after three years of negotiation under which Cuban players would have had a safe, legal path to playing professionally in the United States. In the past, some Cuban stars have undertaken risky escapes, including being smuggled off the island in speedboats.

The U.S. decision was the latest step by President Donald Trump to roll back the rapprochement with Havana, America's old Cold War foe, spearheaded by his predecessor, Barack Obama. Trump has especially stepped up pressure on Cuba recently over its support for Venezuela's socialist president, Nicolas Maduro.

The senior Trump administration official suggested that the agreement would have subjected the players to "human trafficking" by the Cuban government, making them "pawns of the Cuba dictatorship."

"To have the deal not go into effect overlooks the pain experienced by those who have been victims of traffickers," the Cuban Baseball Federation said in a statement. It added it still hoped the deal would ultimately win over the "archaic rhetoric" of critics.

Carlos Tabares, a member of Cuba's 2004 Olympic gold medal-winning squad who until last year played for a Havana team, said the Trump administration was seeking "to destroy us, even through baseball." The MLB deal, he said, would have allowed Cuban players "to enter legally rather than falling into the hands of traffickers and having to risk their lives."

The U.S. official, speaking on condition of anonymity, said the administration would be willing to work with MLB to seek an arrangement consistent with U.S. law.

"We are unsure of the next steps," an MLB source said.

The announcement came just days after the Cuban federation released its first list of 34 players authorized to sign contracts directly with major league teams.

'A PAYMENT TO THE CUBAN GOVERNMENT'

The U.S. Treasury Department on Monday reversed the Obama-era ruling that Cuba's league was not part of the Cuban government, which had laid the groundwork for the baseball deal.