The U.S. embargo on most trade with Cuba, put in place following the Cuban missile crisis in 1962,no longer has even a whisper of a chance of bringing the regime to its knees, economically speaking, as was imagined by the U.S. political leadership 50 years ago.
That’s evident from even a cursory review of foreign trade with the island nation, as a McClatchy Newspapers report detailed. Just in the last five years, there is now evident an“abundance of foreign goods and investment in Cuba,” according to the report.
“While U.S. companies are blocked from doing business in Cuba, that hasn't stopped their international competitors from Canada, Mexico, Brazil and even China from setting up shop,” the story noted. “It’s striking when visiting the island just how much the rest of world now trades with, invests in and sends tourists to Cuba.”
Examples include not only hordes of Europeans, Canadians and Brazilians vacationing on the tropical island, but such foreign powers as:
- China’s Greatwall Drilling Co., which is searching for oil in cooperation with the Cuban state oil company Cupet.
- Greatwall’s parent company, China National Development Corp., which is expanding a Cuban oil refinery jointly owned with Venezuela’s state oil company, PDVSA.
- Canada, which is engaged in a joint venture with Cuba’s state energy sector and Sherritt International Corp.in oil and natural gas exploration
- Spanish oil company Repsol YPF, which is drilling in the deep waters offshore, about 30 miles northwest of Havana; along with Indian and Norwegian oil companies
Growth potential denied
Up until 2004, U.S. farm exports represented about 36% of food aid to Cuba, according to USDA’s Foreign Agricultural Service. The bulk of that trade involved exports of corn, soybeans and poultry products. But then the Bush administration tried to further pressure the Cuban government by requiring more cash upfront for imported food.
By2008, the United States was supplying less than 30% of Cuba’s food and agricultural imports, according to FAS data. Meanwhile, declining production in Cuba’s non-sugar agricultural sectors mean that ag imports will be even more important for feeding Cuba’s population near term.
As FAS reports painstakingly document, the United States offers Cuba numerous advantages in purchasing food and agricultural commodities:
- Quality is generally high
- Pricing—especially for raw commodities—tends to be very competitive
- Geographic proximity results in faster transit times and lower shipping costs, important for perishable food and ag products
- Shorter lead times for orders reduces pressure on Cuba’s domestic storage capacity