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Whose Embargo Is It, Anyway?

Dwayne Andreas
From the Print Edition:
The Cuba Issue, May/Jun 99

From a business perspective, the restrictions and prohibitions regarding commerce with Cuba are neither cost-effective nor time-effective. According to the New York City-based U.S.-Cuba Trade and Economic Council, in 1998 Cuba imported approximately $650 million in bulk-food commodities (cooking oil, chicken, pork, powdered milk, soy, rice, beans, wheat, etc.) for distribution to its 11 million citizens. Millions of dollars more were spent importing food products to feed the 1.4 million tourists who visited the country last year, and even more will go to feed the 1.7 million tourists expected to visit this year. In the 1980s and early 1990s, Cuba was importing approximately $1 billion annually in bulk-food commodities.

From where do the majority of these food products originate? France, Argentina, Mexico, Spain, China, the Netherlands, New Zealand and Canada (the single largest trading partner of the United States).

This year, farmers in the United States are watching as domestic and international bulk-food commodity prices continue to decrease. In large measure, these price decreases are a result of a) ironically, increasing efficiencies that continue to permit farmers in the United States to be the most productive in the world and b) the inability of traditional export markets to maintain existing purchasing levels due to their own domestic economic difficulties. Logic would dictate what to do to help the farmers: create new export markets. Logic would dictate what not to do to help the farmers: support taxpayer bailouts in lieu of creating new export markets. Unfortunately, the definitions of logic in the private sector and in the public sector are far too often at odds.

In 1998, the value of U.S. agricultural exports was approximately $51.7 billion. Today, Cuba could almost immediately become a substantial export market for U.S. farmers. For every new $1 billion in exports, the U.S. Department of Commerce reports that approximately 20,000 jobs are created. Cuba could reasonably sustain and then expand to such a level of imports--thus creating new jobs in the United States.

There are those who advocate maintaining the status quo as the most cost-effective means by which to achieve U.S. policy goals in Cuba. There are those who advocate increased pressure, and others who advocate lessening pressure. All three positions have merit.

Amazing, however, is the number of politicians, pundits and others who hold fast to views about Cuba without ever having visited the country. Watching "The Newshour with Jim Lehrer," reading The Wall Street Journal or listening to National Public Radio must not be

substitutes for seeing for yourself. President Ronald Reagan, upon arriving in Moscow in 1988, said that seeing the Soviet Union once was more important to him than hearing about it 1,000 times.

To those who espouse the view that permitting U.S. businesses to conduct transactions within Cuba will undermine, rather than promote, U.S. policy goals, they are simply wrong. Can anyone rationally argue that U.S. companies exporting to Cuba, importing from Cuba, providing services within Cuba or investing in Cuba would "look the other way" when finding a problem? A prosperous Cuba means a more prosperous United States.

To those who want to see an increase in the standard of living of the Cuban people, the solution is this: permit U.S. companies to create employment opportunities. Cuban government-operated companies and companies from other countries, including those already operating within Cuba, will have no choice but to maintain parity with, or exceed, new wage levels established by U.S. companies or risk losing quality employees. We will be the rule, not the exception.

By not interacting today with Cuba, the United States is sacrificing an ability to influence treaties, laws and regulations that affect commercial transactions within that nation. Assisting the National Assembly of Cuba are representatives from the governments and universities of Canada, the United Kingdom, Spain, France, Italy and Mexico, among others. It is in their interest to establish commercial environments that will provide a competitive advantage to companies within their countries, perhaps to the detriment of U.S. businesses.


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