The US and Cuba have reached a milestone. After decades of trade embargos, the political and economic situation is finally thawing. What many would assume is that trade would blossom between the two nations which are only 90 miles apart from each other. However, the complete opposite seems to be true. Just because the US wants to go back to business as usual does not automatically mean Cuba wants to as well.
But why is this the case? Apparently, amidst the trade embargo, the US was still the number one trading partner of Cuba for food and medical supplies using a legal loophole. However, an interesting development is that trade has actually started to dip with the thawing of diplomatic relations.
Apparently, a whole lot of American politicians have been visiting Cuba for decades to talk trade. Governors, senators, and congressmen flock to the small island to make deals. In 2000, a landmark ruling allowed for cash-only sales of US products. Since then, $1.5 billion has traded hands. However, a marked decrease in exports was observed.
2006 totaled $340 million in exports, representing a 3% drop from the previous year. 2005 experienced a decline too since exports from 2004 reached $392 million. The trend is a slowing down of exports to Cuba, Directorio reported.
It is possible that global competition for business with Cuba puts the US at a disadvantage, Vice reported. For instance, US regulations forbidding agricultural goods sold to Cuba on credit makes trade a lot harder. But, more importantly, it is more possible that the trade decline is politically motivated.
The state-owned Alimport controls all agricultural goods that enter Cuba. It is more than possible that the Castro regime is using it to pressure trade partners. Michael Gershberg, a trade lawyer, was quoted in saying "Alimport can certainly make decisions on imports that aren't purely economic. If they receive orders from the government to make decisions based on political reasons, that can certainly have an effect [on purchases]."
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