Unit IV Case Study US-Cuban Trade

Columbia Southern University

Analyze the Case Study in Chapter 6 of the textbook, pp. 252-256, “U.S.-Cuban Trade: When does a Cold War Strategy Become a Cold War Relic?” Answer the first four questions, 6-3 through 6-6, at the end of the case.

Should the United States seek to tighten the economic grip on Cuba? If so, why?The trade relations that existed between the United States (U.S.) and Cuba started weakening when U.S. companies operating in Cuba werenationalized as part of the outcome of the Cuban Revolution. This was a precursor to the U.S. breaking off any and all trade and business relations with Cuba.The U.S. should not further tighten economic sanctions and should open this market. The elimination of the embargo will be opportunistic to and breakdown a lot of obstacles between both countries.Cuba’s economy is currently in a rocky and worsening state and has only been deteriorating over the past decades. This downslide has been accelerated by the poor political atmosphere in the country over the same time span. Cuba has a lot of investment potential for U.S. corporations and industries and the market is ripe for what the U.S. can bring into the country. This matches up well with Cuba’s demand for foreign products and services. Also, because the Cuban government eliminated a dramatic number of state-sponsored positions, the U.S. can take advantage of the large number of highly qualified, literate, local workers which they could spend less on to train and employ. Also, Cuba offers another source of petroleum off its coasts and currently is allowing other countries to explore its possibilities. Additionally, other nations have begun to ignore the embargo for investment purposes and have begun to trade with Cuba, so the U.S. would be wise to strike while the iron is hot.

Should the United Statese Normalize business relations with Cuba? If so, what conditions might/should the U. S. stipulate?In the best commercial interests of both countries the U.S. and Cuba shouldnormalize their business relationship. In recent years, Cuba has become an attractive target for those foreign companies to make large investments due to its demand for foreign products and services and cheap but highly qualified workers. Also a normalizing of business relations would present opportunities to U.S. companies by allowing then to establish a foothold in the country thereby improving the markets of both U.S. and Cuba.

As far as any stipulations which Cuba may have to abide by the first would be the ceasing of the Cuba having control U.S. companies based there and all previously seized companies should have to be returned, if applicable, to the U.S. companies to which they were previously owned or affiliated with. Also, any conditions under which future trade may be established ought not to be affected by any amount of civil or political disruption that may occur within the Cuban society and government.

Assume you are Cuba’s leader. What kind of trade relationship with the United States would be in your best interest? What type would you be willing to accept?Even with the strictly monitored relationship that Cuba has with the U.S., it is still largely dependent upon the U.S. and our strong economy. The significance of a well-developed and understood trade relationship with Cuba cannot be understated as the U.S. has been the largest exporter of agricultural goods and food to Cuba since 2003. Also, the U.S.’s dominant position and influence over other nations is also of supreme importance to Cuba. A relationship that is mutually advantageous for both countries should establish an atmosphere that fosters growth, prosperity, employment opportunities and rewards for maintaining it. This positive relationship would be mutually beneficial and in the best interest of Cuba.

How do the structure and relationships of the U.S. political system influence the existence and specifications of the trade embargo?The U.S. has established itself as a distinctly commanding and influential power when measured against other world nations. Foreign nations choose to establish trade and political associations with the U.S. due to its dominant position in the world economy. Utilizing its strong power position, the U.S. instituted the embargo on Cuba and, additionally, requested that other nations follow the same model. Initially it was motivated by Cuba’s clear violation of human decency and the conflicts in which its leaders kept taking the country into during the 1950s. The conditions under which Cuba had to abide by endured until 2006. The U.S. continually asserted its influence, whether openly or “under the table”, over other nations to keep them from trading with Cuba and, detrimentally effecting the Cuban economy. Also, the U.S. Congress and the President are continually influenced by lobbyists and benefactors who are in direct opposition to the way that Castro runs the government. The U.S. has a venerable oppositional relationship with Communism and Communist nations making any possible modifications to the embargo difficult to achieve.