IBD: Cuban Freedom And Trade Decline Since Obama's Opening To Cuba

Wednesday, October 14, 2015
By Monica Showalter of Inverstor's Business Daily:

Go Figure: Cuban Freedom And Trade Decline Since Obama's Opening To Cuba

Everything about President Obama's December announcement to restore relations with Cuba has been premised on the idea that more exposure means more liberalization on the island.

In his Dec. 17 speech to the nation, the president said: "We are taking steps to increase travel, commerce and the flow of information to and from Cuba. This is fundamentally about freedom and openness and also expresses my belief in the power of people-to-people engagement. ... I believe this contact will ultimately do more to empower the Cuban people."

The result has been the opposite, with more repression of dissidents, and the Castro regime cranking up the goon squads overtime to beat and jail dissidents. Some 6,000 arrests have been announced since the opening, hardly a sign of a more open Cuba leading to a freer Cuba.

It's the exact same thing with trade. For a while, the U.S. was Cuba's top supplier of food and medical goods, even with the trade embargo on and conditions for contact far more restricted. The Castro regime was free to purchase food and medicine, but it couldn't do it on U.S.-guaranteed credit. Cash on the barrel-head was all Castro was entitled to, given his vast record of defaulting on debts, and it didn't stop him from buying.

But in the past 10 months, trade has dropped sharply, and Castro seems to be buying goods elsewhere. McClatchy News reports that August export trade with Cuba was $2.2 billion, down from $14.3 billion in August 2014, a very significant drop.

So what gives?

According to experts McClatchy cited, the Castro regime is cutting down on trade as a means of making U.S. agricultural exporters complain to Congress about the embargo. To Castro, that is the real prize here because it will make Uncle Sam's trade credits available to Cuba. It's the old "make the economy scream" idea at work — arbitrary, state-directed and illogical.

It ought to give anyone thinking about doing business with Cuba pause — because that's the way trade is done in communist Cuba.