President Barack Obama is pursuing a new approach on Cuba, but after several months of secret negotiations, the Communist Cuba is the only one that coming out ahead with its embassy and new-found credibility in the international arena.
U.S. companies have been promised a whole lot by the Obama administration and the Cuba, but it seems like the main winners of this new policy are European entities. For example, after what seemed to be a flurry of Treasury Department licenses issued to American ferry companies to provide transport services to the island, the Cuban government awarded a ferry contract to a Spanish corporation, Baleària.
The House Subcommittee on Terrorism, Nonproliferation, and Trade will hold a hearing tomorrow to review the potential for U.S. ag exports to Cuba. Witnesses will paint a very rosy picture and we’ll hear how American growers could be exporting as much as $1 billion or more a year to Cuba. I’m all about more exports, consistent with U.S. and policy, but at what economic and political cost?
Selling to Cuba is not the same as selling to Mexico, Brazil, or any other country in the Western Hemisphere. For starters, Communist Cuba remains a brutal dictatorship, a police state. Cuba uses food exports from the United States as a political weapon that, in this current state of play, it is using to try use to buy votes in Congress to secure sanctions-easing legislation that goes well beyond the sale of food.
I don’t think they are going to get very far this year; however, Cuba is working with legions of supporters around the country as well as lobbyists in Washington, DC to make a dent in the vote count. And from what I can tell from the most recent food export stats, these lobbyists are not doing a very good job. American ag exports to Cuba are way down, their lowest levels since the law went into effect in 2000.
Rather than purchase U.S. food on market-based terms, Communist Party officials opt to purchase food on the other side of the world from ideological fellow travelers. In 2015, the Cubans purchased a paltry $40 million in U.S. food products. In 2008, when the regulatory restrictions were arguably much tougher, the last year of the Bush Administration, Cuba bought $710,000,000 in U.S. ag products! How is that for gratitude from Obama’s new friends in Havana?
It will be interesting if the administration witnesses answered some of these questions: Who is receiving this food, the Cuban people or rank-and-file Communist Party officials and entities such as the military-run tourist hotels? And what about the more than $7 billion in U.S. certified claims against Cuba that Cuba refuses to pay? How does the U.S. government ensure that U.S. transactions with Cuba involving food sales do not involve properties subject to a certified claim?
The Obama Administration’s wrong-headed approach toward Cuba, as with other rogue regimes, has put U.S. interests in the trunk of the car (not even the back seat). It has also made the hemisphere less secure and will most likely lead to instability in the region. American taxpayers deserve better, as do the Cuban people. U.S. law requires as much and the sanctions should not be eased one inch until the legal requirements outlined for a transition government have been satisfied.
Compared to other regions in Latin America, at least for now, Cuba is a tiny export market run by hard-line communists that uses police state tactics to keep order. They need to change. Until then, be careful not to get too caught up in the Cuba hype. Remember, especially in politics and when it comes to US-Cuba policy, always drink upstream from the herd.