Trade with Cuba and Economic Growth
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Later today Adrean Rothkopf, Vice President for Western Hemisphere Affairs at the Chamber, will be testifying before the Committee on Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection on Examining the Status of U.S. Trade with Cuba and its Impact on Economic Growth.
The Chamber has been a long-standing opponent of the embargo and sees recent legislation and statements by the administration as important first steps toward a policy more likely to bring change to Cuba and commercial benefits to the United States. The Chamber supports efforts to broaden economic engagement with the island in the belief that additional commercial and people-to-people contacts would promote a transition to democracy and full civil liberties. But ultimately what we would like to see is an end to the embargo--lifting the embargo would help American farmers, businesses, and workers, as well as the Cuban people by providing new economic opportunities.
Our two countries are natural trading partners and prior to the embargo the United States accounted for nearly 70% of Cuba’s international trade. Cuba was the seventh largest market for U.S. exporters, particularly for American farm producers. But the embargo forced Cuba to seek out new sources for its domestic consumption.
Since the Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 allowed the sale of agricultural goods to Cuba, sales have grown from less than $1 million to $718 million in 2008, despite the heavy regulations and licensing requirements. Yet the majority of agricultural trade with Cuba is done by large multinational companies, as small and medium size exporters are deterred by the complexity of regulations. A 2007 U.S. International Trade Commission report states that small exporters avoid the Cuban market because of the complexity of TSRA regulations. Removing restrictions on trade with Cuba would provide small and medium-sized enterprises (SMEs) with access to a much needed market in these difficult economic times and reestablish the natural competitive advantage of our agricultural and consumer goods.
As public opinion in South Florida shifts toward favoring engagement with the island, the time is right to end a failed policy that has isolated us from our neighbors and the rest of the world. The Castro regime could have not withstood five decades of free trade, free markets, and free enterprise, powered by its own entrepreneurial citizens. It is time to engage with Cuba and lay the groundwork for broader change which will not only serve the interests of U.S. companies and workers and the Cuban people, but also serve to redefine the U.S. relationship with the region at-large.
View the complete testimony.