Paradox of Cuban Trade: U.S. exports to Cuba collapsed in 2015 but now are increasing

The devil is in the details. Stop eating what the chickens are picking at.

Yesterday morning Cuban blogger and journalist Yoani Sanchez tweeted: "Chicken arrived at the neighborhood stores ... don’t ask what country it comes from this time ... you know 'that is not talked about' in the official media." Performed a quick search of the packaging and found that it is indeed an American export. Hudson Midwest Foods, Inc. is a subsidiary of the American company Tysons foods.

How can this be? If you read the propaganda spread by the Castro regime then you'd believe there is an "economic blockade" that prevents U.S. products entering Cuba.

It is true that economic sanctions have been tightened by the current Administration, and Title III of the Cuban Democracy Act will make life more difficult for those who traffic in stolen properties.

Nevertheless, trade continues between U.S. companies and the Castro dictatorship, and in 2017 and 2018 U.S. exports to the island increased compared to the last two years of the previous Administration.

It is counter-intuitive, but the December 17, 2014 announcement that the United States and Cuba would seek normalized relations was followed by a collapse in U.S. exports to the island.

The Cuban government was no longer interested in buying U.S. products. The first question one should ask was why had the Castro regime been interested in buying them in the first place?

James Prevor, President and Editor in Chief of the publication Produce Business in October of 2002 in the article, Cuba Caution, reported on how Cuba "had exhausted all its credit lines and, at best, was simply rotating the accounts. When the opportunity came to buy from the United States, Cuba simply abandoned all those suppliers who supported the country for 40 years and began buying from us."  The suppliers were not the ones impacted by Cuba's failure to pay its debts, the taxpayers of the suppliers' home countries were left picking up the tab.

U.S. products being sold in larger quantities today in Cuba than four years ago.

Why would the Castro regime double cross the suppliers that had been supporting them for decades?

There are two fundamental reasons.

First, it was an investment to open up the credit spigot of the United States that would provide it with billions more in hard currency.

Seventeen years ago Prevor predicted where things have now arrived in the Cuba policy debate as far as agribusiness is concerned: 

"But what the really big grain traders want is to sell to Cuba on credit - and get those credits provided or guaranteed by various federal loan programs. In effect, these agribusiness behemoths want to sell to Cuba and have the U.S. tax- payer pick up the tab. And their bet is that once produce shippers have gotten a taste of the business, they will become a kind of Amen corner for the Cuban lobby, pushing Congress to approve whatever laws will be to the liking of the Cuban government. This really brings to the forefront why trade with a communist country poses unique dangers to a democratic society."

The Castro regime views the billions in goods purchased from the United States as the ultimate variation of the bait and switch con. A policy of normalization with the current government in Cuba may be good for agribusiness, the US Chamber of Commerce, and the Cuban dictatorship but it will not be good for U.S. taxpayers who will be left holding the bag like so many other tax payers around the world. 

Second, it was a way for the Castro dictatorship to purchase influence in the corridors of power both at the state and national level.

Castro used openings in trade from the Clinton era (medical products in 1992 and agricultural products in 2000)  to build up a pro-Castro lobby and to target congressional districts in agricultural states to advance the dictatorship's interests. 

The Cuban autocracy accomplished this by purchasing American exports and requiring U.S. corporations and members of Congress to sign "advocacy contracts" that turned Americans into lobbyists for the dictatorship as a condition of the Castro regime buying their goods. 

News of this practice broke 15 years ago in USA Today and in The Miami Herald but goes unmentioned today. The Miami Herald in a October 5, 2004 editorial described this practice as "peddling influence for a communist state" and said that those engaged in the practice "should be required to register as agents of a foreign government."

John Kavulich, who was the head of the U.S.-Cuba Trade and Economic Council until 2005 explained in 2003 the significance of these "advocacy agreements" stating: 

''These agreements are a corruption of the commercial process,'' ... ``Once you include an advocacy clause, they're no longer commercial agreements; they're political documents.'' 

Castro's suppliers didn't eat the cost that was passed on to taxpayers in their respective countries. Meanwhile Havana maximized its influence in the corridors of power in Washington, DC and created an army of pro-regime lobbyists.

Why did U.S. exports to Cuba collapse during the last two years of the prior Administration?

US Cuba exports collapsed from a 2008 high of $711 million to $185.7 million in 2015

The prior Administration gave the Castro regime everything it wanted, caving on numerous foreign policy priorities that Havana had long been pursuing and steadily loosened sanctions. The Cuban tyrant, following several years of this, correctly calculated that further influence peddling was not needed.

Now that a new team entered the White House with different foreign policy priorities the Castro regime has been ramping up U.S. purchases to levels higher than in 2015 and 2016 while in the midst of an economic crisis.

If these patterns hold then it means that Havana is pursuing a campaign of increasing political influence in the United States to advance its foreign policy agenda, which includes, but is not limited to, lifting economic sanctions and pursuing U.S. credits.

US Cuba exports rose from a 2015 bottom of $185.7 million to $274.6 million in 2018

Political considerations drive the Castro regime's economic policies. This is why U.S. export trade with Cuba increased during the Bush Administration, and is rebounding now at a time of increased political tensions over Venezuela, and Nicaragua.

If you are pursuing free trade and normal relations with communist Cuba then you are "comiendo de lo que pica el pollo."  That literally translates to "eating what the chickens are picking at" and in Cuban slang means to "waste your time on foolish things." Cuba does not have a normal regime, but a criminal mafia driven by a murderous ideology to build alliances with bad actors and undermine existing democracies to be more like them. Venezuela is a case in point.

Version of this was originally published in CubaBrief.