United States Commerce Secretary Penny Pritzker is visiting Cuba today in order to promote the possibility of better trade relations between the United States and the island nation. The visit comes as existing trade has been lessening between the two countries.
Even though Cuba has been under an embargo from America for the past 53 years, the country still buys some goods from America. Certain exceptions allow American companies to sell food and medical supplies in Cuba.
Surprisingly, even though the United States and Cuba have started to settle their differences, trade between the two countries has declined in recent years. From 2007 to 2014, agricultural exports to Cuba by the United States fell from $710 million to $291 million. This year alone, they have further declined by 41% to just $122 million.
Officials are quick to point out that the Cuban government has just as much to do with the situation as the Obama Administration.
President of the US-Cuba Trade and Economic Council John Kavulich says, “What the Obama administration does is only 50 percent of the equation. This is also about what the Cuban government wants. And right now the Cuban government is showing a less than enthusiastic focus on what the president’s done.”
Some of the decline is simply related to basic economics. Global commodity prices are down, resulting in a decreased value for all trade. Furthermore, Cuba can purchase agricultural products anywhere in the world. A disadvantage to buying from the United States for Cuba is that law in the United States does not allow domestic producers to sell goods on credit to Cuba. Elsewhere, other countries worldwide are willing to sell Cuba goods on credit.
Meanwhile, Cuban politics are also harming trade. In Cuba, all agricultural goods that are purchased from the United States must be sold to the state-owned company of Alimport, which many analysts believe the Castro regime uses as a political influencer. Indeed, Alimport has been known to make decisions based on politics rather than economics.
The burden is felt by companies in the United States. Texas agricultural company WestStar Food previously sold 5,000 tons of pinto beans to Cuba on an annual basis. Now, those sales are gone.
WestStar president Patrick Wallesen said, “We haven’t exported anything there for almost four years now. For the most part, the way I see it, they pretty much quit buying everything except chicken and grains.”
However, the government of the United States is hoping to rekindle its relationship with Cuba. In August, the embassy of the United States reopened in Cuba’s capital city of Havana. Last month, the Cuban government loosened restrictions on companies from the United States operating in Cuba. Such moves should allow greater business opportunities between the two nations.
For now, many people are hopeful that Pritzker’s visit today can provide the needed spark to stimulate trade between the United States and Cuba.
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