Economic benefits of loosening trade restrictions between Cuba and the United States

Sunday, April 19, 2009

I've found a pretty good page here that shows in some detail some of the effects on the stock market and the economy on these preliminary lifting of restrictions with Cuba; that is, the lifting of restrictions of Cuban-Americans visiting Cuba and sending money back, and the enabling of American telecommunications companies to do business. The page also includes four videos, three of which I've found interesting enough to jot some notes down from. The most interesting one is probably the Canadian businessman (Walter Berkoff) that has made a mint in Cuba over the last 17 years since there are no restrictions to doing business with Cuba in Canada, because once all the restrictions are lifted the next huge company doing business there could be American.

April 14:

- Italy has been providing cellphone services in Cuba for 10 years now
- 500 companies around the world have offices in Havana and joint ventures there are in the billions of dollars, while American businesses and executives are still prevented from traveling there
- US Chamber of Commerce has also called for a full lifting of the embargo
- Now families are able to carry packages with seeds and this could add to US agricultural exports...though last year Cuba bought $715 million of agricultural products from the US already
- Cuban trade in 2008: Exports $3.5 billion; export partners Canada, China, Netherlands (note: this is probably a lot through the Netherlands Antilles), Spain; imports $11.7 billion; import partners Venezuela, China, Spain, Canada, US
- More substantial steps including lifting the embargo would be bilateral talks on immigration, drug trafficking, etc.
- There are vast opportunities in energy, mining, travel, agribusiness and biotechnology for American companies once this opens up as well

April 18:

Walter Berkoff of Leisure Canada, which has been in Cuba for 17 years with properties on 75-year leases

- 40% of the tourists arriving in Cuba today are Canadian
- 6 million Americans would travel to Cuba in the first year alone if the embargo were lifted
- 2 million tourists visit Cuba annually at present, so the extra American tourists would quadruple this amount
- Property in Cuba can be compared to that in southern Florida, but at 1950s prices

April 18:

- The changes being made to the relationship between the two countries is the only thing people are talking about right now in Havana
- Cuban economy depends on family remittances so even these small first changes are very important in that respect. These total $600 million to $1 a year even at rates until now where no more than $300 a quarter could be sent so this will rise a great deal

Finally, the linguistic effects will be interesting too. 11 million extra Spanish speakers close to Florida is a big deal where the linguistic balance has already shifted from English to Spanish in and around Miami, but at the same time the sudden opening of a primarily English-speaking country next door to Cuba will also be huge there. If there are 2 million tourists there now and 40% of them are Canadian that makes perhaps 700,000 English speakers (removing a bit due to Quebec), so the number of English-speaking tourists is probably about 1 million or so at present. Now imagine removing the embargo and adding 6 million American tourists to that. That's huge. Even with these current restrictions being lifted we're still talking about Cuban-Americans who will all know at least some Spanish, but a removal of the travel ban in its entirety will be a completely different manner.


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