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
No comments:
Post a Comment