Case Study: US Cuban Trade

Pages: 12 (3863 words)  ·  Bibliography Sources: 5  ·  Level: College Senior  ·  Topic: Economics  ·  Buy This Paper

U.S.-Cuba Relations and the Potential for Economic and Political Progress

Since President Theodore Roosevelt, there has existed in U.S. political culture a quiet dominion over the small island nation of Cuba. The bedrock of this U.S. policy is an ideology of benevolent domination. Created at the time of the Spanish-American War, President Theodore Roosevelt captured this ideology quite simply in 1907 when he explained, "I am seeking the very minimum of interference necessary to make them good." (Schoultz, 2010, 1). The United States and Cuba have had a rocky business relationship since the 1950's, when, at the height of the Cold War, Communist Rebels took the country, backed by the Soviet Union. This has affected both trade relations as well as relationships, family ties, and other more personal aspects touched by the trade embargo. Both nations stand to benefit from a reformation of trade and business policy and the best direction forward is a positive one for both nations. Mutual cooperation and the lifting of the U.S. trade embargo is an economically and socially beneficial plan for both countries.

The United States has remained relatively stagnant when it comes to loosening its grip on the relationship, at least economically. This stems mostly from the fact that the two nations' political views are diametrically opposed, at least in principle. But there are plenty of instances where the U.S. And Cuba could benefit from a more open economic and diplomatic relationship. Not least of these reasons would be free trade and a more open Caribbean region that is friendly to the United States in all instances. The United States should not seek to tighten its grip, nor should it continue to view Cuba as the Communist threat it once represented to the United States. This perspective has shaped the structure of the relationship as well as the embargo that the U.S. has imposed upon Cuba for decades. Certainly the dissolving of the embargo and the Cold War era mentality would represent a massive political and social shift, but the benefits to such changes would outweigh the initial costs and potential for public outcry. Much of this outcry could stem from Cuba's traditional stance against U.S. capitalism and the U.S. political machine.

Much of the resistance found around reforming the trade relations between these two countries may be disappearing, as older generations and ways of thinking become less and less influential in shaping U.S. policy toward the outside world. Also, the U.S.'s political and social structures, one adamantly opposed to the Communist country's attitudes and agendas, has been slowly changing over time to reflect a more moderated, less ethno-centric attitude. The potential for a positive and mutually beneficial trade relationship with Cuba exists. However, not everyone feels as though both countries could benefit. This comes from the fact that Cuba has been relatively shut off from the outside world since the 1950's and therefore does not possess much in the way of technology or infrastructure that could help to build a positive and lucrative trade relationship. Also, as some scholars argue, Cuba does not have much in the way of raw materials or resources to trade. In fact, according to a 2009 Council on Foreign Relations report, Cuba has the third largest nickel deposit in the world as well as a booming tourism industry worth over $2.7 billion dollars in 2008, fueled mostly by Europeans and Canadians (Hanson, 2009, 2). These facts coupled with Cuba's strong ties to other more resource rich nations leaves much potential for U.S.-Cuban trade. These resources could also help bolster the global economic recovery by giving Cuba as well as other nations the opportunity to benefit from trade with the Caribbean island nation.

The U.S. has tried for over five decades to undermine the Castro regime through trade restrictions and embargoes that have not worked (Griswold, 2005). These restrictions were the product of a failed attempt to shut down the island's economy and weaken its power structure. The U.S. political machine continues to parrot the same actions and attitudes that permeated U.S. political culture and discussions in the 1950's. This is partly because of the lack of education that many Americans have relative to Cuba and the fact that ignorance relative to the positive gains both nations could make if they worked together is still the norm. The world has changed and the embargoes have been unsuccessful in getting rid of Castro. Certainly the Castro regime's grip on Cuba's population and human rights violations are examples of why Castro's government needs to be reformed, but the fact that the trade relationship has not been modified, in either nations' favor or for the good of the tens of thousands of Cuban exiles living worldwide, is testament to the fact that the U.S.'s stance is far outdated and needs to change.

Resources and Assets

Another major asset that Cuba has is a high number of highly trained healthcare professionals (Hanson, 2009, 1). This is quite surprising for some, given the fact that Cuba does not have much access to U.S.-based educational institutions or financial assistance. In fact, many of the best Cuban doctors and nurses end up working in countries like Venezuela, where Cuban ties are much stronger. There is certainly no shortage of highly trained and highly motivated professionals in Cuba itself, and this is yet another resource the small island nation could exploit in a more open business relationship with the United States. The remittances alone from many Cubans working abroad has helped to fuel the Cuban economy.

As far as the U.S. is concerned, remittances from Cuban-born professionals and families living within the U.S. were cut down from $3,000 per year to a mere $300 per year (Hanson, 2009, 1). These cuts came under the Bush Administration's labeling of the nation as a state sponsor of terrorism, according to the U.S. State Department (Hanson, 2009, 2). This label has been questioned and highly criticized as undeserved, and even as the U.S. holds many so called "terrorists" in its Guantanamo Bay detention center, the country itself has remained on this list. One of the biggest reasons Cuba is even on this list is because of the Castro family's ties to a few militant Basque leaders in Europe. These ties are questionable at best, and the U.S.'s inclusion of Cuba on any sort of terrorist list is more evidence of the fact that both the U.S. And Cuba are beginning to run out of reasons and justification for continuing their current trade policies towards one another. In 2009 President Obama lifted the $300 per year restriction on remittances, instead limiting them to $3,000 per year once again and lifting many of the travel restrictions placed upon Cubans and Cuban exiles (Hanson, 2009, 1). However, it is still impossible to fly from the U.S. To Cuba because of the trade embargoes as the country's place on the state sponsors of terrorism list. If the remittances were allowed to continue, they could become part of an international effort to help life Cuba out of the Cold War era's socially and politically crippling mentality and perspective (Smith, 2009).

Cuba represents one of the best opportunities for the U.S. In strengthening ties in the Caribbean and with Communist states around the world. The U.S. has much to offer this tiny nation in terms of goods and services, and the country's resources, both material and labor-related could help enrich the U.S. economy as well. Opening trade with Cuba could also do much to encourage more positive political ties between the U.S. And Venezuela as well, which sits on one of he world's largest oil fields. The business benefits to lifting the trade embargo far outweigh the potential for political backlash. Cuba no longer presents a direct threat to the U.S., as it did in the Cold War days when the Soviet Union had a presence there. The Cuban leadership, which in 2006 was turned over to Fidel Castro's brother, Raul, is just as reluctant to change the stance on working with the United States until the U.S. agrees to lift many of the trade embargoes levied against Cuba (Schoultz, 2010, 6). As the larger, more powerful state, the U.S. would have to take the lead in beginning to change the shape of its policies toward Cuba.

Possibilities for Trade Relationships

Since both nations stand to both gain or possibly be harmed by opening up trade, it is necessary for each to stipulate certain conditions that may act to help ensure neither nation is taken advantage of economically or politically. These conditions could take the form of a trade agreement to be implemented in the event that the trade embargoes are lifted. One of the first and most important considerations for Cuba would be to ensure the U.S., with its larger, more powerful economy, did not drain Cuba's resources outright (Schoultz, 2010, 6). This could come in the form of a brain drain, where Cuban professionals, eager to leave the country to earn larger paychecks… [END OF PREVIEW]

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