Monday, November 26, 2012

Cuban-Virginian Relations…Hope for a More Open Future?

The United States is famous (or really, infamous) for its agricultural subsidies that support American farmers and in doing so prevent foreign farmers from entering the economy. Economists go crazy because of the economic inefficiency and American consumers are faced with higher prices for their run of the mill cantaloupe.

The Washington Post is reporting something different. In a surprising twist of events, one article documents the struggles of Henry Chiles, a nearby apple farmer in Charlottesville renowned for his produce but unable to expand his business to neighboring Cuba because of trade embargos placed on the communist country. The issue is an interesting dilemma—again, we have economic inefficiency, but in this instance the political ramifications for opening up borders with Cuba and expanding the same subsidized industry within the U.S. are too much to cash in upon the benefits of an increase in trade.

The article makes an interesting distinction within the context of a discussion about two countries and their political differences. While the United States as a whole has seen an enormous drop in exports to Cuba (the article cites a move from $711.5 million in 2008 to $363.3 million last year), Virginia as a state has grown in their exports. According to author Laura Vozzella, this increase in Virginian demand abroad is the result of good relations between companies in the state and the Cuban government. Vozzella includes the expertise of one consultant focused on trade in Cuba that explains that, “so many products are so competititve, and they’re priced by the world market anyway. It comes down to two suppliers at basically the same price – that’s where the personal contact becomes very important.” Ironically, despite the economic inefficiency of the national trade embargo, Virginia as a state has experienced economic benefit from an increase in efficiency.

Virginia’s opening of its borders with Cuba speaks to a hope for future national openness, albeit one that must begin with a better relationship between the two nations as a whole. Despite the fact that the trade embargo established by JFK during the Cold War has been reduced, borders between the two nations must be opened even further if economic efficiency is to be reached. The problem then becomes political: even though the Cold War ended more than twenty years ago, anti-Communist sentiment remains. The U.S. as a capitalist country must resist any vestiges of Communism, but ironically, the efficiency of free-market capitalism is being hindered by its own political concerns.

            The issues are thus more political than economic, and for now Virginia will wait, and continue to reap the rewards of a mutually-beneficial relationship. As the farmer Chiles explains, “we know sooner or later that Cuba will open back up again…it’s a market that’s close to us. It makes sense for us to export as close to home as we can.”


Here’s the article:
http://www.washingtonpost.com/local/va-politics/va-farmers-find-eager-trade-partner-cuba/2012/11/25/59834264-3018-11e2-ac4a-33b8b41fb531_story_1.html

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