Trade balance CARICOM - Cuba. 2004-2013 (US Dollars)
Source: Based on International Trade Centre data. http://comtrade.un.org/data/
Courtesy Dr Jennifer Laguardia Martinez
CARICOM’s relationship with its Spanish-speaking socialist neighbour Cuba has not
advanced as much economically as it has in the field of foreign policy. Although Cuba is
not a member state of CARICOM, the relationship between the island and the regional
bloc has advanced in the last decades. CARICOM’s 15 members - the majority of whom are
Small Island Developing States - and Cuba share similar challenges and promote their
common interests in international forums. Triennial summits, together with a sustained
cooperation in health and education, among other sectors, illustrate the positive
relationship that has blossomed between Cuba and its Caribbean neighbours. CARICOM
has denounced the United States’ economic sanctions against Cuba and has voted
repeatedly in the United Nations General Assembly to end the embargo.
An existing Trade and Economic Cooperation Agreement between Cuba and CARICOM is
being applied on a bilateral individual basis with countries that have ratified it.
Notwithstanding the dormant status of the trade agreement, trade between CARICOM
and Cuba has expanded in favour of CARICOM since 2000, according to Dr. Jacqueline
LaGuardia Martinez, a Cuban lecturer at the Institute of International Relations at the
University of the West Indies in St. Augustine.
CARICOM exports to Cuba climbed from US $13.7million in 2000 to US$46 million in 2008.
The negative effects of the global economic crisis hit the trade exchange and declined in
2009, with a partial recovery in 2010 when exports reached US$25 million. In 2011 the
trend in decreasing exports reoccurred and attained levels similar to those of 2009. The
Cuban policy of limiting imports, which has hardened in recent years - together with the
global economic crisis - have contributed to a significant lessening of Cuban imports from
the region.
CARICOM’s imports from Cuba, on the other hand, show a peak in 2007, equivalent to
US$107 million, followed by a steady decrease, with a partial recovery in 2009. From 2010
the contraction has sharpened and imports have not surpassed US$10 million ever since.
The trade flows between Cuba and CARICOM members is of less significance if compared
with the trade that they share respectively with other partners. CARICOM’s main trade
partners are the USA, European Union and China, while Cuba’s main trading partners are
Venezuela, China, Canada, Spain and Brazil. The value of that trade is much higher than its
current exchange with CARICOM.
Cuban trade within the Caribbean region is concentrated in a few countries - Trinidad and
Tobago, Jamaica, Belize, Barbados, Guyana and Suriname, with T&T accounting for the
biggest share. The main exogenous factors that block the increase in trade exchange and
investments flows between Cuba and CARICOM, besides the economic crisis worldwide,
are the high cost of transportation (both sea and air); legal and institutional differences;
insufficient finance and credit mechanisms; and the 54-year-old United States blockade
against Cuba. These factors are more important obstacles than the language barrier.
Hay problemas (There are problems)
Cuba’s unsatisfactory recent economic performance has negatively affected its export
capacity which has, in turn, prompted changes on the island. In 2010 President Raul Castro
announced a slew of economic reforms, including 18 new categories of independent
employment, which had been illegal since 1959. Real estate agents, auto body workers
and home builders have come out of the shadows in Cuba's expanding private economy.
The number of approved independent employment activities has risen to 200. In all, more
than 430,000 private employment licenses have been issued since the reforms, and
436,342 independent workers are currently operating, according to the country’s State
newspaper, Granma.
However, many educated professionals such as lawyers, health care workers or scientists
continue to work for the state. The new rules bar the resale of imported goods such as
clothing. Also prohibited will be the resale of goods bought in state-run retail stores.
Travel restrictions by the US and Cuban governments over the past five years also eased,
which hundreds of thousands of Cubans and Cuban-Americans quickly cashed in on by
flying to places like Miami and Spain to bring in nearly $2bn (£1.2bn) of products - from
razor blades to rice cookers – in their luggage.
Most notably in January 2015, it became possible for Americans to visit Cuba without a
specific license if the visit falls under any of 12 categories, including family visits,
journalistic activity, professional research or meetings, humanitarian projects and official
business of the U.S. or foreign governments. Additionally, American credit and debit cards
can be used on the island and the per diem spending rate has been eliminated.
But there are still limits to the amount of goods that can be brought into the country in
luggage, and shipped by boat from abroad.
The government said the restrictions are meant to curb abuses that have turned air travel
in particular into a way for “mules” to illegally import supplies for black-market businesses
and legal private enterprises, which are supposed to buy their supplies from the state.
However, the quality of Cuban goods is not the best, and most Cubans prefer foreignmade commodities.
With foreign reserves dropping sharply over the past two years as Cuba tries to pay off
sovereign debt and make itself a more attractive destination for foreign investment, the
government is desperate to reduce the flow of goods and push for cash remittances,
which are subjected to hefty government fees. Limiting informal imports also would
presumably help boost business in state-controlled stores.
Opportunities for CARICOM
In spite of the difficulties, it is the opinion of Dr LaGuardia Martinez that some possibilities
to intensify the Cuba-CARICOM relations are only partially employed. Both CARICOM and
Cuba share economic vulnerabilities arising from similar economic structures and
dependence on external trade, she pointed out. Opportunities for trade and economic
cooperation exist beyond trade in goods. There is potential for expansion of trade in
services, which accounts for the most dynamic sectors in CARICOM. Regarding
professional services, it could be useful to establish mutual recognition agreements since
many CARICOM professionals were trained in Cuba and are already fluent in Spanish and
familiar with the culture, she pointed out. “Opportunities also exist for further expansion
of investments in tourism, especially through expansion of existing marketing
arrangements for multi-destination tourism and the development of health tourism and
sports tourism joint initiatives,” said LaGuardia Martinez. “The existence of CubaCARICOM agreements should be fully utilised in order to enhance trade relations.”