Free Trade with Cuba? Not Anytime Soon

Free Trade with Cuba? Not Anytime Soon

Diplomatic relations with Cuba!

Wow! Did anybody see that coming?

You've probably heard the political bickering about it, so there's no
need to get into that. Instead, let's address the question that's
foremost in people's minds: Can you buy Cuban cigars legally now?

Yes, but not easily. You'll have to go there to buy them and you can
only bring $100 worth back to the United States. That's four cigars at
most. Presumably, Cuban cigar-makers will someday be able to export them
here, but it may be a long time before that happens. Establishing
diplomatic relations doesn't automatically erase the 56-year-old trade
embargo. That would require an act of Congress.

With that settled, we can look at the less important questions that
relations with Cuba raise. Such as, what else does Cuba make that
Americans might want to buy? And, what does America make that Cubans
could afford to buy?

The answer to the first question is: not much. Cuba's largest
manufacturing industries produce steel, cement and agricultural
machinery, according to the CIA World Factbook. Its main agricultural
products are sugar, tobacco, citrus, coffee, rice, potatoes, beans and
livestock. None of those things are in short supply in the U.S. and they
would be subject to tariffs if imported from Cuba.

A product that Cuba doesn't make but has an abundance of is classic
American cars. There are about 70,000 of them, all built before 1959.
Antique car enthusiasts in the U.S. are licking their chops at the
prospect of being able to buy some of them.


The Museum of the Antique Auto Club of America is taking a group of club
members to Havana in April to check out the inventory. Executive
Director Mark Livewskie said they had to call it a people-to-people
visit so as to de-emphasize the capitalist nature of the trip. But
buying will certainly be on the visitors' minds.

"There's always been something of a mystique" surrounding classic
American cars in Cuba, Livewskie said.

Because of the trade embargo, Cubans who own those cars can't buy parts,
so they have to have them made. Even the smallest parts – nuts, bolts,
screws – have to be hand-made. Sometimes they use discarded train parts
or put tractor engines in cars.

Doing away with the trade embargo wouldn't means Cubans could call Ford
and order a fuel vapor storage canister for a 1958 Fairlane. But they
could find one on eBay.

In order for Congress to allow reasonably open trade with Cuba, they
wouldn't just have to end the trade embargo. They'd also have to amend –
or repeal – the Helms-Burton Act of 1996.

It holds that any country that has any commerce with Cuba can be subject
to U.S. sanctions and its leaders can be barred from entering the United
States. There's an office in the State Department whose sole
responsibility is to monitor compliance with Helms-Burton.

The law also says that the government of Cuba must make "demonstrable
progress" in returning property that it expropriated (i.e., stole) from
Americans before Congress will consider ending the trade embargo. The
Justice Department's Foreign Claims Settlement Commission says the
Cubans have about $1.9 billion worth of expropriated American property.

Congress isn't likely to do anything about the embargo or about
Helms-Burton during the next two years. That would mean giving President
Obama something that he wants and why on earth would they do that?

Moreover, if a Republican is elected president in 2016, he or she could
rescind Obama's decision to normalize relations with Cuba. That would be
particularly duplicitous given that Cuba released an American spy from
prison as a condition of normalizing relations.

So, the U.S. will have an embassy in Havana and presumably the Cubans
will have on in Washington. Any trade or economic benefit to American
businesses or consumers probably won't materialize for several years

Source: Free Trade with Cuba? Not Anytime Soon -
http://www.forbes.com/sites/johnbrinkley/2014/12/31/free-trade-with-cuba-not-anytime-soon/