Trading with Cuba

The United States and Cuba are going to reopen their embassies in Havana and Washington, though Cuban officials have stated that relations won’t be normalized until the U.S. Congress lifts the trade embargo, or what they call el bloqueo, the blockade. There has been a steady stream of congressional and trade delegations visiting Cuba, all looking for opportunities and hoping to be the first in line to sign new commercial and investment deals.

It should be pointed out that the U.S. already exports a considerable amount of stuff to Cuba, and has been doing so for years: food and health care products, which are not covered by the 1917 Trading with the Enemy Act, or the 1992 Cuban Democracy Act or the 2000 Trade Sanctions Reform and Export Enhancement Act. There’s a cash-up-front, no credit requirement, but according to the U.S.- Cuba Trade and Economic Council the U.S. has exported $1.1 billion in medical equipment, instruments, supplies and pharmaceutical goods to Cuba so far this year, while agricultural sales totalled $83 million (with frozen chicken topping the list). The Council’s June newsletter, Economic Eye on Cuba, has a full breakdown of American exports to Cuba since 2001 can be downloaded from its web site http://www.cubatrade.org/.

The newsletter observes that there are “meaningful exports of products from the United States to the Republic of Cuba that remain unreported/undocumented” and enter the country via charter flights from the U.S. and third country airlines. This seems like an oblique reference to Cuban-American visitors bringing goods to relatives on the island. The Obama administration has authorized exports to private Cuban enterprises, but for the time being it is the Cuban government that controls all imports. The Council also notes that

The government of Cuba may determine greater leverage exists from not increasing purchasing levels as a means of encouraging those impacted United States-based parties to seek further regulatory and legislative changes. Members of Congress, Governors and other political actors will increase their visits to the Republic of Cuba as media coverage of the visits will be generous. However, if too many visitors return without commitments for purchases of products manufactured in their respective states, the media’s generosity will lessen…as will the political actors and, eventually, companies.

Politico has this piece on U.S.-Cuba trade: http://www.politico.com/agenda/story/2015/07/trade-with-cuba-we-already-do-300-million-worth-000130

And a related piece on doing business with Cuba, pointing out that a future Republican administration could undo everything: http://www.politico.com/story/2015/07/us-cuba-relationship-obstacles-119650.html

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