US-Cuba trade numbers hard to follow
According to the Obama administration, there is a lot of trading going on with Cuba. After further review, there is not a lot of trading at all. In fact, the difference may be somewhere between the $6 billion that the Obama administration is projecting and about $380 million in real commerce going on.
This is from The Miami Herald:
The Obama Administration has said that trade with Cuba could reach up to $6 billion under its new policies, but U.S. companies in fact exported barely $380 million worth of goods to the island since the beginning of the thaw in bilateral relations two years ago.
Commerce Secretary Penny Pritzker said early last year that her department had issued 490 licenses to companies trying to do business with Cuba valued at $4.3 billion. More recently, White House spokesman Josh Earnest said that since late 2014 “more than $6 billion in trade has been initiated between Cuba and the United States since then, which obviously has an important economic benefit here in the United States.”
Experts said the administration is exaggerating, and that those numbers must be put in better context.
Well, put me down as one who never bought this nonsense that Cuba and the U.S. were doing $6 billion in trade.
First, let's understand that these are the people who told us you could keep your health care policy if we wanted to. How did that one work out? Not hard to be skeptical after that or the nonsense about ISIS being the J.V. team!
Second, as the article confirms, Cuba's economy is not growing. Cuba's GDP grew by 0.9% in 2016. Cuba's GDP is $81 billion. How can the U.S. and Cuba be doing $6 billion in trade?
Third, Cuba does not have the liquidity to pay for all of these U.S. goods or services. This is because no one is lending Cuba any money, and the US embargo cuts off access to credit lines in the U.S.
Fourth, the article points out that U.S. exports to Cuba, food items such as chicken, soya, and corn, actually fell since the Obama administration eased sanctions on Cuba.
So be cautious with all those expectations about how opening up Cuba would lead to all of those opportunities on the island.
In other words, there are no opportunities, unless you want to build a hotel to fly in U.S. tourists. Of course, such investments require you to have the Cuban government as your partner – the family business, that is!
How can you expect a country with very little purchasing power to buy anything?
We say it again: the Obama policy toward Cuba has not really benefited U.S. companies or the Cuban people. It has been pretty good for the Castros and the thugs who protect them.
In time, a free Cuba could return to the economic relationship it had with the U.S. before 1961. It won't happen anytime soon as long as the aforementioned family is running the island for its own gain.