http://www.cato-at-liberty.org/2008/02/15/who-are-the-real-free-traders-in-congress/
Thursday, February 28, 2008
Competition Not Protection For U.S. Automakers in Canada
Competition not protection for Automakers
http://www.thestar.com/printArticle/303443
Try harder to sell cars overseas: Emerson
TheStar.com - Business
Trade minister rejects Hargrove's demand for restrictions on imports
February 14, 2008
Richard Brennan
OTTAWA BUREAU
OTTAWA–The Big Three automakers should try harder to sell their vehicles to other countries rather than expect the federal government to put up protectionist trade barriers, International Trade Minister David Emerson says.
"But the reality is the industry has not focused on non-North American markets, whether it's Korea or any other non-North American market," Emerson said yesterday, reacting to suggestions from Canadian Auto Workers president Buzz Hargrove that Ottawa put trade restrictions on imported vehicles.
"Buzz always kind of speaks the rhetoric of free trade but when it comes right down to it, I'm not convinced he's a true free trader," Emerson told reporters.
Hargrove told a news conference on Tuesday that if reciprocal trade measures are not introduced soon, General Motors Corp. and Ford Motor Co. Ltd., particularly, could go belly up within a decade.
"What he is saying is that he wants us to negotiate access into the Korean and Japanese market for vehicles and parts and obviously that's what a free-trade negotiation is about," Emerson said. "And yet they seem to want us to walk away from the free-trade negotiations. So I'm a little puzzled by it.
"I don't think modern trade negotiations are about those kinds of deals. I don't think major economies like Japan and Korea would be interested in that kind of a deal."
Canada and the United States signed in 1965 the Automotive Products Trade Agreement, which kept Canada's auto industry healthy for 35 years. But the World Trade Organization determined in February 2000 that the Auto Pact violated international trading rules and the agreement formally came to an end in February 2001.
While Hargrove still talks about the days of the North American Auto Pact, Emerson said those days are gone.
"The Auto Pact was a very tender small step, a careful step toward North American free trade and it had built into it all kinds of production safeguards that kept it from actually being a free-trade agreement," Emerson said.
"We eventually went to free trade but that was after many, many years of people reducing their nervousness about our ability to compete in a North American market."
Emerson said North American industry exports only about one-third of 1 per cent of production, but Hargrove said that's because there is no political pressure on countries like Korea and Japan to buy vehicles made by GM, Ford and Chrysler.
"They're not exporting to any significant markets outside of North America. The Canadian auto industry is fundamentally focused on the North American market," he said.
http://www.thestar.com/printArticle/303443
Try harder to sell cars overseas: Emerson
TheStar.com - Business
Trade minister rejects Hargrove's demand for restrictions on imports
February 14, 2008
Richard Brennan
OTTAWA BUREAU
OTTAWA–The Big Three automakers should try harder to sell their vehicles to other countries rather than expect the federal government to put up protectionist trade barriers, International Trade Minister David Emerson says.
"But the reality is the industry has not focused on non-North American markets, whether it's Korea or any other non-North American market," Emerson said yesterday, reacting to suggestions from Canadian Auto Workers president Buzz Hargrove that Ottawa put trade restrictions on imported vehicles.
"Buzz always kind of speaks the rhetoric of free trade but when it comes right down to it, I'm not convinced he's a true free trader," Emerson told reporters.
Hargrove told a news conference on Tuesday that if reciprocal trade measures are not introduced soon, General Motors Corp. and Ford Motor Co. Ltd., particularly, could go belly up within a decade.
"What he is saying is that he wants us to negotiate access into the Korean and Japanese market for vehicles and parts and obviously that's what a free-trade negotiation is about," Emerson said. "And yet they seem to want us to walk away from the free-trade negotiations. So I'm a little puzzled by it.
"I don't think modern trade negotiations are about those kinds of deals. I don't think major economies like Japan and Korea would be interested in that kind of a deal."
Canada and the United States signed in 1965 the Automotive Products Trade Agreement, which kept Canada's auto industry healthy for 35 years. But the World Trade Organization determined in February 2000 that the Auto Pact violated international trading rules and the agreement formally came to an end in February 2001.
While Hargrove still talks about the days of the North American Auto Pact, Emerson said those days are gone.
"The Auto Pact was a very tender small step, a careful step toward North American free trade and it had built into it all kinds of production safeguards that kept it from actually being a free-trade agreement," Emerson said.
"We eventually went to free trade but that was after many, many years of people reducing their nervousness about our ability to compete in a North American market."
Emerson said North American industry exports only about one-third of 1 per cent of production, but Hargrove said that's because there is no political pressure on countries like Korea and Japan to buy vehicles made by GM, Ford and Chrysler.
"They're not exporting to any significant markets outside of North America. The Canadian auto industry is fundamentally focused on the North American market," he said.
East Africans Fail to Remove Technical Market Access Barriers Amongst Themselves, Despite Adverse Impact on Trade Flows
East Africa: Remove Trade Barriers
http://allafrica.com/stories/200802120616.html
The Citizen (Dar es Salaam)
EDITORIAL
11 February 2008
Posted to the web 12 February 2008
A workshop was told In Dar es Salaam recently that no member of the East African Community (EAC) has removed non-tariff barriers. This is despite approval of the EAC Council of Ministers that partner states form committees to oversee the issue.
Formation of the national committees was an attempt to address the problem of non-tariff barriers on trade which would now be removed in order to make the movement of goods between member states smooth.
We are a bit perplexed why partner states have not taken steps to implement such an important issue which affects the trade pattern of member states.
For, as it is now, there are many impediments towards smooth trade among them. These hinder the movement of goods from one country to another, contrary to the very purpose of forming the EAC.
Leading forms of barriers include police road blocks, standards requirements, customs procedures, documentation and poor application of the rules of origin.
It is disheartening that while other economic blocks take steps towards closer cooperation the EAC seems to be marking time. And with the turmoil in Kenya it is anybody's guess if member states will ever take steps to implement the resolution of the EAC council of ministers. Let's wait and see.
http://allafrica.com/stories/200802120616.html
The Citizen (Dar es Salaam)
EDITORIAL
11 February 2008
Posted to the web 12 February 2008
A workshop was told In Dar es Salaam recently that no member of the East African Community (EAC) has removed non-tariff barriers. This is despite approval of the EAC Council of Ministers that partner states form committees to oversee the issue.
Formation of the national committees was an attempt to address the problem of non-tariff barriers on trade which would now be removed in order to make the movement of goods between member states smooth.
We are a bit perplexed why partner states have not taken steps to implement such an important issue which affects the trade pattern of member states.
For, as it is now, there are many impediments towards smooth trade among them. These hinder the movement of goods from one country to another, contrary to the very purpose of forming the EAC.
Leading forms of barriers include police road blocks, standards requirements, customs procedures, documentation and poor application of the rules of origin.
It is disheartening that while other economic blocks take steps towards closer cooperation the EAC seems to be marking time. And with the turmoil in Kenya it is anybody's guess if member states will ever take steps to implement the resolution of the EAC council of ministers. Let's wait and see.
India Won't Tolerate Any More Barriers
'India will retaliate if faced with non-tariff trade barriers'
February 8, 2008
http://www.hindu.com/thehindu/holnus/000200802081866.htm
The Hindu
Bangalore (PTI): India on Friday warned that it will retaliate against countries that seek to impose non-tariff barriers to trade on its exporters.
Without taking names, Commerce and Industry Minister Kamal Nath told exporters at a meeting here that the sub- continent nation has become a key market to some of these countries, which could not afford to lose out on it.
He was replying to questions about some countries creating hindrances to trade by invoking labour laws, packaging standards and safety measures.
Last year, some leading international clothing brands had put a freeze on sourcing of readymade garments from an Indian manufacturer citing employment of child labour. It had nearly caused a diplomatic stand-off between India and the Netherlands.
Industry estimates had pegged the growth of garment sourcing from India at 12 per cent. Other estimates suggested that clothing and textile production in India by foreign brands would touch USD 22-25 billion this year.
The textile industry, an employment intensive sector, is already said to have suffered the worst by the rupee's appreciation against the US dollar.
Nath said India's strength lies in its credibility and should be leveraged in the face of stiff competition offered by global players.
He said India was negotiating trade agreements with various countries to strengthen its position on trade.
India's inherent strength of being a large market and her ability to topping technology and innovation has made the country into a key supply source, the minister said.
February 8, 2008
http://www.hindu.com/thehindu/holnus/000200802081866.htm
The Hindu
Bangalore (PTI): India on Friday warned that it will retaliate against countries that seek to impose non-tariff barriers to trade on its exporters.
Without taking names, Commerce and Industry Minister Kamal Nath told exporters at a meeting here that the sub- continent nation has become a key market to some of these countries, which could not afford to lose out on it.
He was replying to questions about some countries creating hindrances to trade by invoking labour laws, packaging standards and safety measures.
Last year, some leading international clothing brands had put a freeze on sourcing of readymade garments from an Indian manufacturer citing employment of child labour. It had nearly caused a diplomatic stand-off between India and the Netherlands.
Industry estimates had pegged the growth of garment sourcing from India at 12 per cent. Other estimates suggested that clothing and textile production in India by foreign brands would touch USD 22-25 billion this year.
The textile industry, an employment intensive sector, is already said to have suffered the worst by the rupee's appreciation against the US dollar.
Nath said India's strength lies in its credibility and should be leveraged in the face of stiff competition offered by global players.
He said India was negotiating trade agreements with various countries to strengthen its position on trade.
India's inherent strength of being a large market and her ability to topping technology and innovation has made the country into a key supply source, the minister said.
WTO Finds That China Employed Illegal Protectionist Border Tariffs & Indirect 'Local-Working' Subsidies
WTO rules against China on car parts; Finds in favour of Canada, U.S. and EU
http://www.theglobeandmail.com/servlet/story/LAC.20080214.RCHINA14/TPStory/Business
theglobeandmail.com
STEVEN CHASE
With files from AP
February 14, 2008
OTTAWA -- The World Trade Organization has for the first time ruled against China for breaking global trade law in a precedent-setting case over car part imports that is expected to spur further challenges aimed at forcing Beijing to open its markets.
Yesterday's interim decision by the WTO found in favour of Canada, the United States and the European Union, all of which complained that China is raising unfair barriers to imports of foreign car parts.
China only joined the 151-member WTO in 2001 and while the state-heavy economy faces several challenges to its trade behaviour at the global body, yesterday's ruling is the first decision handed down.
International Trade Minister David Emerson cheered the ruling - which is officially secret until March despite being leaked yesterday - saying the decision may help open up a new market for
Canadian auto parts makers.
Print Edition - Section Front
"Hopefully it will bring about change in the practices that China's been applying," he said. "With our companies in such tough shape right now, a growing market is critically important to restoring health to our Canadian auto parts industry."
The WTO ruling is only an interim decision but the global referee's adjudicators have never changed their minds in the final version of their rulings. It could take more than a year for the case to conclude, but when it does, China may be forced to alter its behaviour or face trade sanctions from Ottawa, Washington and Brussels.
The WTO reportedly found that China was breaking agreed-upon global trade rules by taxing imports of car parts at the same higher rate levied on foreign-assembled autos.
"It's rendering it uneconomic for Canadian parts suppliers in this market," Mr. Emerson said of China's tax rate.
Toronto trade lawyer Lawrence Herman with Cassels Brock & Blackwell LLP predicts more WTO challenges of Chinese trade barriers.
Mr. Herman noted China's growing importance as an export destination, particularly for U.S. goods. "I think it's the beginning of many more such cases where the U.S. is taking on China, rightly or wrongly, for not complying with WTO rules," he said. "The huge U.S. trade deficit with China can't be ignored."
U.S. exports to China have more than quadrupled between 1996 and 2006, when they hit $55.2-billion (U.S.). That same year, the U.S. trade deficit with China hit $233-billion.
The three trade powers argued at the WTO that China's tariff was discouraging auto makers from using imported car parts for the vehicles they assemble in China. As a result, car parts firms had an incentive to shift production to China, costing Americans, Canadians and Europeans their jobs, they said.
The ruling will be closely watched by makers of batteries and brakes, seats and spark plugs on both sides of the Atlantic, including U.S.-based Delphi Corp. (General Motors' former parts supplier) and Robert Bosch GmbH in Germany.
China, which can appeal the ruling, claims the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It argues all measures are consistent with WTO rules and do not discriminate against foreign auto parts.
But the U.S. and EU say China promised not to treat parts as whole cars when it joined the WTO in 2001.
[This point is significant in light of the prior 1998 WTO case Indonesia – Certain Measures Affecting the Automobile Industry (WT/DS54,55,59 & 64/R). US and EU allege that two sets of Indonesia measures constitute subsidies that cause ‘serious prejudice’ to their interests within the meaning of SCM Art. 5 (c). They alleged that the effect of the ‘subsidies’ was to displace or impede imports of ‘like’ products from the EC and US into the subsidizing Indonesian market. In other words, the prices of 'like' EC and US autos were significantly undercut by the subsidized national car company, and thus discriminated against in the marketplace.
The first set of measures entailed a ‘grant’ of National Car company status to Indonesian car companies that met specified criteria as to ownership of facilities, use of trademarks and technology. The ‘benefits’ provided were exemption from luxury tax on car National Car sales and exemption from import duties. They were maintainable by meeting increasing local content requirements.
The second set of measures provided that National Cars manufactured in a foreign country by Indonesian nationals and that fulfill (20%) local content requirements shall be treated the same as ‘National Cars’ (exemption from luxury tax and import duties). The 20% local content requirement was deemed satisfied if the overseas car manufacturer ‘counter-purchases’ Indonesian parts and components that account for 25% or more of the cost & freight (C&F) value of the imported cars. Indonesia maintained a duty of 200 percent on imports of finished passenger cars. As a result, almost ALL passenger cars imported into Indonesia including the EC and US models in question were imported as ‘completely knocked down’ (CKD) kits and assembled in Indonesia.
The WTO Appellate Body (AB) did not consider that an unassembled product ipso facto was NOT a ‘like’ product to that product assembled. The AB considered that a tariff classification was a useful tool in ‘like’ product analysis. It noted how the Gen’l Rules for Interpreting Harmonized System stated that any reference in a heading to an article shall include a reference to that article incomplete or unfinished, provided, the incomplete or unfinished article has the essential character of the complete or finished article.
The AB believed that a comparable approach to the relation between assembled and unassembled products made good sense in the context of that dispute. Due to the high Indonesian duties, ‘completely built-up, EC and US producers shipped ‘cars in a box’ to Indonesia. Consequently, they could properly be considered to have characteristics closely resembling those of a completed car. In WTO jurisprudence, the AB employed a ‘Big Accordion’ of ‘likeness’.]
http://www.theglobeandmail.com/servlet/story/LAC.20080214.RCHINA14/TPStory/Business
theglobeandmail.com
STEVEN CHASE
With files from AP
February 14, 2008
OTTAWA -- The World Trade Organization has for the first time ruled against China for breaking global trade law in a precedent-setting case over car part imports that is expected to spur further challenges aimed at forcing Beijing to open its markets.
Yesterday's interim decision by the WTO found in favour of Canada, the United States and the European Union, all of which complained that China is raising unfair barriers to imports of foreign car parts.
China only joined the 151-member WTO in 2001 and while the state-heavy economy faces several challenges to its trade behaviour at the global body, yesterday's ruling is the first decision handed down.
International Trade Minister David Emerson cheered the ruling - which is officially secret until March despite being leaked yesterday - saying the decision may help open up a new market for
Canadian auto parts makers.
Print Edition - Section Front
"Hopefully it will bring about change in the practices that China's been applying," he said. "With our companies in such tough shape right now, a growing market is critically important to restoring health to our Canadian auto parts industry."
The WTO ruling is only an interim decision but the global referee's adjudicators have never changed their minds in the final version of their rulings. It could take more than a year for the case to conclude, but when it does, China may be forced to alter its behaviour or face trade sanctions from Ottawa, Washington and Brussels.
The WTO reportedly found that China was breaking agreed-upon global trade rules by taxing imports of car parts at the same higher rate levied on foreign-assembled autos.
"It's rendering it uneconomic for Canadian parts suppliers in this market," Mr. Emerson said of China's tax rate.
Toronto trade lawyer Lawrence Herman with Cassels Brock & Blackwell LLP predicts more WTO challenges of Chinese trade barriers.
Mr. Herman noted China's growing importance as an export destination, particularly for U.S. goods. "I think it's the beginning of many more such cases where the U.S. is taking on China, rightly or wrongly, for not complying with WTO rules," he said. "The huge U.S. trade deficit with China can't be ignored."
U.S. exports to China have more than quadrupled between 1996 and 2006, when they hit $55.2-billion (U.S.). That same year, the U.S. trade deficit with China hit $233-billion.
The three trade powers argued at the WTO that China's tariff was discouraging auto makers from using imported car parts for the vehicles they assemble in China. As a result, car parts firms had an incentive to shift production to China, costing Americans, Canadians and Europeans their jobs, they said.
The ruling will be closely watched by makers of batteries and brakes, seats and spark plugs on both sides of the Atlantic, including U.S.-based Delphi Corp. (General Motors' former parts supplier) and Robert Bosch GmbH in Germany.
China, which can appeal the ruling, claims the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It argues all measures are consistent with WTO rules and do not discriminate against foreign auto parts.
But the U.S. and EU say China promised not to treat parts as whole cars when it joined the WTO in 2001.
[This point is significant in light of the prior 1998 WTO case Indonesia – Certain Measures Affecting the Automobile Industry (WT/DS54,55,59 & 64/R). US and EU allege that two sets of Indonesia measures constitute subsidies that cause ‘serious prejudice’ to their interests within the meaning of SCM Art. 5 (c). They alleged that the effect of the ‘subsidies’ was to displace or impede imports of ‘like’ products from the EC and US into the subsidizing Indonesian market. In other words, the prices of 'like' EC and US autos were significantly undercut by the subsidized national car company, and thus discriminated against in the marketplace.
The first set of measures entailed a ‘grant’ of National Car company status to Indonesian car companies that met specified criteria as to ownership of facilities, use of trademarks and technology. The ‘benefits’ provided were exemption from luxury tax on car National Car sales and exemption from import duties. They were maintainable by meeting increasing local content requirements.
The second set of measures provided that National Cars manufactured in a foreign country by Indonesian nationals and that fulfill (20%) local content requirements shall be treated the same as ‘National Cars’ (exemption from luxury tax and import duties). The 20% local content requirement was deemed satisfied if the overseas car manufacturer ‘counter-purchases’ Indonesian parts and components that account for 25% or more of the cost & freight (C&F) value of the imported cars. Indonesia maintained a duty of 200 percent on imports of finished passenger cars. As a result, almost ALL passenger cars imported into Indonesia including the EC and US models in question were imported as ‘completely knocked down’ (CKD) kits and assembled in Indonesia.
The WTO Appellate Body (AB) did not consider that an unassembled product ipso facto was NOT a ‘like’ product to that product assembled. The AB considered that a tariff classification was a useful tool in ‘like’ product analysis. It noted how the Gen’l Rules for Interpreting Harmonized System stated that any reference in a heading to an article shall include a reference to that article incomplete or unfinished, provided, the incomplete or unfinished article has the essential character of the complete or finished article.
The AB believed that a comparable approach to the relation between assembled and unassembled products made good sense in the context of that dispute. Due to the high Indonesian duties, ‘completely built-up, EC and US producers shipped ‘cars in a box’ to Indonesia. Consequently, they could properly be considered to have characteristics closely resembling those of a completed car. In WTO jurisprudence, the AB employed a ‘Big Accordion’ of ‘likeness’.]
"It will be instructive to see how China responds," U.S. Trade Representative Susan Schwab said in a recent interview with Associated Press. "If, as we hope and expect, China will be found in contravention of its WTO obligations, hopefully that will help those forces within China that have been advocating reform."
Mexican Trade Barriers May Help Immigration Flow to US
End of trade barriers may send many Mexican farmers north
San Antonio News (MySA.com)
February 20, 2008
San Antonio News (MySA.com)
February 20, 2008
Are Cuban Trade Sanctions a Vestige of the Past??
http://www.latimes.com/business/la-fi-cubaecon20feb20,1,7782700.story?track=rss
From the Los Angeles Times
FIDEL CASTRO STEPS DOWN: U.S. businesses are eager to jump in
For many, the question is when, not if, trade barriers against Cuba will be lifted, a veteran observer says.
By Marla Dickerson
Los Angeles Times Staff WriterFebruary 20, 2008
MEXICO CITY — With Fidel Castro stepping aside, California vegetable growers, Alabama chicken producers and Kansas wheat farmers -- not to mention scores of other nonagricultural businesses -- see new opportunity to push for an expansion of U.S.-Cuba trade.
America has quietly become the largest foreign supplier of food products to the communist nation, thanks to a loosening of the long-standing U.S. trade embargo against the island nation in 2000. U.S. farmers sold an estimated $437 million worth of agricultural products to Cuba last year, according to the U.S.-Cuba Trade and Economic Council. The Cuban government puts the figure even higher, at more than $600 million.
Though the U.S. has limited its trade to mostly agricultural items, economic rivals such as China have been much more aggressive -- cutting deals with Cuba to develop its oil reserves and other natural resources. With a population of more than 11 million just 90 miles off the U.S. coast, Cuba is a largely untapped market for American goods and services.
"We're leaving billions of dollars on the table," said Kirby Jones, president of Alamar Associates, a Maryland-based consulting firm that advises companies interested in doing business in Cuba. "By any measure, [U.S. policy] has been a failure."
U.S. officials said Tuesday that there were no immediate plans for further easing of the 46-year-old trade embargo. Experts said American policymakers would proceed cautiously given that Castro is still alive, and given that Florida, with its powerful anti-Castro lobby of Cuban Americans, may play a decisive role in the U.S. presidential election.
Still, some veteran observers said that Castro's departure marks another small but inevitable step toward closer trade ties with Cuba, particularly at a time when globalization is forcing the U.S. to fight for market share in every corner of the globe.
"Most [American] businesspeople are thinking in terms of 'when' instead of 'if' " the embargo is lifted, said Mario Sacasa, senior vice president for international programs with the Beacon Council, a Miami-based economic development organization. "Their question is always: 'Why does the U.S. trade with other non-democratic governments but not with Cuba?' "
For nearly half a century, the trade embargo has been an unassailable feature of U.S. foreign policy, strongly supported by South Florida's conservative Cuban American community. Thousands of people lost their homes, businesses and other private property to Castro's communist regime, a bitter memory that has shaped U.S. policy ever since.
But another powerful U.S. lobby -- farmers -- has managed to crack that blockade ever so slightly.
Under pressure from agriculture groups, Congress in late 2000 approved sales of commodities and food products to the island, as long as Cuba paid upfront in cash and the transactions weren't handled by U.S. banks.
Despite those tricky terms, trade took off almost immediately. By 2003, the United States had surpassed the European Union as Cuba's largest foreign supplier of agricultural products, according to the U.S. International Trade Commission.
Major exports include corn, chicken, wheat, soybeans and rice. A parade of U.S. representatives and trade delegations have traveled to Cuba in recent years to try to strike trade deals.
But California, America's largest farm state, sells virtually nothing to Cuba. Exports in 2006 totaled a paltry $735,000, mostly in tomatoes, almonds and table grapes, according to the latest figures available from the state.
Last month California sent a large agricultural delegation to Cuba in the hopes of cultivating stronger trade ties with the Caribbean nation. Golden State growers are looking for opportunities wherever they present themselves, said Ken Gilliland, director of international trade for the Western Growers Assn.
He said critics' contention that California farmers would be propping up a communist regime by selling fruit and vegetables to Cuba just doesn't ring true with the state's producers.
"We're not talking about some sensitive technology or computers or arms or anything like that. We're talking about food," Gilliland said. "Practically the whole world is already trading with Cuba." U.S. policy "just kind of puts us growers and producers at a disadvantage."
Countries such as China and Canada are exploring for petroleum in Cuban waters and helping the country develop its nickel reserves. Spanish companies have invested heavily in Cuba's tourism sector, and Brazil is looking to build roads and other infrastructure. India wants to cooperate with Cuba in science and high technology.
Some U.S. firms complain that the Cuban government has pressed them to lobby their legislators for an end to the American trade embargo in exchange for contracts -- a price some have found too steep, according to John Kavulich, a senior policy advisor with the U.S.-Cuba Trade and Economic Council.
"The problem is when the Cubans start putting conditions" on the contracts, said Kavulich, who declined to name companies that have been pressured in such a way.
Kavulich said that so far, U.S. businesspeople have shown little excitement about the changing of the guard in Cuba. "They know that nothing has changed," he said.
Still, consultant Jones said that the real shift that American businesses are waiting for will come out of Washington, not Havana, with the U.S. elections in November.
He said the departure of Castro, an impossibly polarizing figure, combined with new leadership in the White House could lead initially to small changes such as liberalizing U.S. travel restrictions to Cuba -- and perhaps bigger ones down the road.
"It's a recipe for rethinking and change," he said.
From the Los Angeles Times
FIDEL CASTRO STEPS DOWN: U.S. businesses are eager to jump in
For many, the question is when, not if, trade barriers against Cuba will be lifted, a veteran observer says.
By Marla Dickerson
Los Angeles Times Staff WriterFebruary 20, 2008
MEXICO CITY — With Fidel Castro stepping aside, California vegetable growers, Alabama chicken producers and Kansas wheat farmers -- not to mention scores of other nonagricultural businesses -- see new opportunity to push for an expansion of U.S.-Cuba trade.
America has quietly become the largest foreign supplier of food products to the communist nation, thanks to a loosening of the long-standing U.S. trade embargo against the island nation in 2000. U.S. farmers sold an estimated $437 million worth of agricultural products to Cuba last year, according to the U.S.-Cuba Trade and Economic Council. The Cuban government puts the figure even higher, at more than $600 million.
Though the U.S. has limited its trade to mostly agricultural items, economic rivals such as China have been much more aggressive -- cutting deals with Cuba to develop its oil reserves and other natural resources. With a population of more than 11 million just 90 miles off the U.S. coast, Cuba is a largely untapped market for American goods and services.
"We're leaving billions of dollars on the table," said Kirby Jones, president of Alamar Associates, a Maryland-based consulting firm that advises companies interested in doing business in Cuba. "By any measure, [U.S. policy] has been a failure."
U.S. officials said Tuesday that there were no immediate plans for further easing of the 46-year-old trade embargo. Experts said American policymakers would proceed cautiously given that Castro is still alive, and given that Florida, with its powerful anti-Castro lobby of Cuban Americans, may play a decisive role in the U.S. presidential election.
Still, some veteran observers said that Castro's departure marks another small but inevitable step toward closer trade ties with Cuba, particularly at a time when globalization is forcing the U.S. to fight for market share in every corner of the globe.
"Most [American] businesspeople are thinking in terms of 'when' instead of 'if' " the embargo is lifted, said Mario Sacasa, senior vice president for international programs with the Beacon Council, a Miami-based economic development organization. "Their question is always: 'Why does the U.S. trade with other non-democratic governments but not with Cuba?' "
For nearly half a century, the trade embargo has been an unassailable feature of U.S. foreign policy, strongly supported by South Florida's conservative Cuban American community. Thousands of people lost their homes, businesses and other private property to Castro's communist regime, a bitter memory that has shaped U.S. policy ever since.
But another powerful U.S. lobby -- farmers -- has managed to crack that blockade ever so slightly.
Under pressure from agriculture groups, Congress in late 2000 approved sales of commodities and food products to the island, as long as Cuba paid upfront in cash and the transactions weren't handled by U.S. banks.
Despite those tricky terms, trade took off almost immediately. By 2003, the United States had surpassed the European Union as Cuba's largest foreign supplier of agricultural products, according to the U.S. International Trade Commission.
Major exports include corn, chicken, wheat, soybeans and rice. A parade of U.S. representatives and trade delegations have traveled to Cuba in recent years to try to strike trade deals.
But California, America's largest farm state, sells virtually nothing to Cuba. Exports in 2006 totaled a paltry $735,000, mostly in tomatoes, almonds and table grapes, according to the latest figures available from the state.
Last month California sent a large agricultural delegation to Cuba in the hopes of cultivating stronger trade ties with the Caribbean nation. Golden State growers are looking for opportunities wherever they present themselves, said Ken Gilliland, director of international trade for the Western Growers Assn.
He said critics' contention that California farmers would be propping up a communist regime by selling fruit and vegetables to Cuba just doesn't ring true with the state's producers.
"We're not talking about some sensitive technology or computers or arms or anything like that. We're talking about food," Gilliland said. "Practically the whole world is already trading with Cuba." U.S. policy "just kind of puts us growers and producers at a disadvantage."
Countries such as China and Canada are exploring for petroleum in Cuban waters and helping the country develop its nickel reserves. Spanish companies have invested heavily in Cuba's tourism sector, and Brazil is looking to build roads and other infrastructure. India wants to cooperate with Cuba in science and high technology.
Some U.S. firms complain that the Cuban government has pressed them to lobby their legislators for an end to the American trade embargo in exchange for contracts -- a price some have found too steep, according to John Kavulich, a senior policy advisor with the U.S.-Cuba Trade and Economic Council.
"The problem is when the Cubans start putting conditions" on the contracts, said Kavulich, who declined to name companies that have been pressured in such a way.
Kavulich said that so far, U.S. businesspeople have shown little excitement about the changing of the guard in Cuba. "They know that nothing has changed," he said.
Still, consultant Jones said that the real shift that American businesses are waiting for will come out of Washington, not Havana, with the U.S. elections in November.
He said the departure of Castro, an impossibly polarizing figure, combined with new leadership in the White House could lead initially to small changes such as liberalizing U.S. travel restrictions to Cuba -- and perhaps bigger ones down the road.
"It's a recipe for rethinking and change," he said.
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