Strengthening Trade with our Communist Southern Neighbor

Wednesday, March 1, 2017 - 3:30pm

By: Taylor Edward Crouch

The recent death of Cuba’s former president and revolutionary political leader, Fidel Castro Ruiz, has put into question the future of U.S. trade relations with the island nation. President Barack Obama re-established diplomatic ties with Cuba in 2014 by vowing to “cut loose the shackles of the past.” In the interest of U.S. trade policy and the protection of human rights, the current trade embargo with Cuba must be eliminated.

Following the Cuban Missile Crisis of 1962, the Kennedy administration placed an embargo on all commercial, economic, and financial trade for U.S. industries with Cuba.  Purportedly established to punish the Castro regime for human rights violations, the embargo has actually financially disadvantaged Cubans by giving economic control to the regime, furthering oppression and disenfranchisement of its citizens.  In addition, the embargo directly blocks immense U.S. trade opportunities in technology, tourism, and agricultural sectors – the latter two having flourished prior to the embargo.

Despite the current trade embargo, Cuba has worked hard to maintain a viable economy.  In 1995 it became a World Trade Organization (WTO) member, thereby establishing trade relations with other nations.  The Central Intelligence Agency reported in 2015 that Cuba exports an estimated $3.9 billion and imports an estimated $13.5 billion worth of goods and services.  As one of Cuba’s top trading partners, China is playing an increasingly important role in this region with total trade growing 57% in the first three quarters of 2015.  In addition, China has expressed interest in internet infrastructure and luxury housing for Chinese tourists.

WOLA, a leading research and advocacy organization advancing human rights in the Americas, reported on a 2014 study by the Peterson Institute for International Economics that merchandise exports to Cuba could reach an estimated $4.3 billion annually if the embargo were lifted.  By opening trade relations wider than President Obama, Cuba would become a financial partner with the U.S., thereby deterring China’s future efforts to control the region.  Increased travel of goods, services, and people from the U.S. to Cuba (and vice versa) would help establish transparency and address the current human rights concerns.  

In 2015, the U.S. Embassy in Havana was reopened and the first diplomatic outreach occurred between the U.S. and Cuba in 53 years.  When Secretary of State John Kerry landed he called for the immediate start of bilateral dialogues focused on human rights in addition to security, immigration, science, technology, and transportation between the two nations.  In addition, the U.S. Treasury has expanded upon the current 12 travel categories to include organized person-to-person education-based travel.  Many tourist agencies, like insightCuba, are beginning to offer trips to the island starting at the low cost of approximately $2,000 per person.

Throughout his campaign, President Donald Trump maintained a hardline stance on U.S.-Cuban relations.  His demands, which mirror those of Cuban exiles in Florida, focused on political and religious freedom for Cuban citizens and the release of political prisoners.  Trump critiqued President Obama’s use of an executive order to establish relations with Cuba, threatening a full-scale reversal of diplomatic ties if the Cuban regime fails to meet mutually shared demands. 

American businesses already investing on the island are expected to show strong resistance to such reversal.  Power to fully eliminate the trade embargo with Cuba lies with the U.S. Congressional Republicans, who have expressed a recent willingness to open full trade relations.  Most are fearful of a Chinese takeover within the region.  With the recent death of Castro, the complete transition of political power to Raul (which began several years ago) offers Trump an opportunity to shape future U.S.-Cuba trade relations.

By stepping forward and being the first President to offer full trade relations with a post-Castro Cuba, President Trump would be establishing a clear deterrence against growing Chinese influence in the region, protect human rights, and offer greater economic viability for U.S. producers and consumers.  It is time to eliminate this failed policy.