The recent news that Congress shot down an amendment to the Farm Bill that would have eased trade with Cuba came as a disappointment, including the active participation of 66 Democratic representatives. This from TheHill.com:
Sixty-six House Democrats — including 20 members of the freshman class — recently voted against a farm bill amendment offered by Ways and Means Committee Chairman Charles Rangel (D-N.Y.) that would have made it easier for U.S. farmers to sell agricultural goods to Cuba.
The nearly 50-year embargo against Cuba has obviously not been a fabulous success lo these many years later, and I'm optimistic that a new Democratic administration will put an end to it, probably soon after Fidel fades away for good. But I wondered when I saw the news just what a normal trade relationship with Cuba would look like. And, more to the point, for progressives who support removing the embargo, have they thought about how that action fits in with their own views on international trade?
Would open trade with Cuba be good for the U.S.? Is it good for Cuba?
I'll state from the outset that I lean toward the free trade wing of the D party and support lifting the embargo for the import/export opportunities it gives Americans and Cubans. However, there are valid criticisms to the global free trade model, and a lot of the questions put toward the current system should be considered when discussing the removal of the Cuba embargo.
First, is trade with Cuba good for the U.S.? Cuban workers make an average of $12 a month. Even China can't match that wage scale and Cuba's just a short boat ride away for exports. Are we opening ourselves up to more competition from extraordinarily low wage countries where workers are unable to organize independently in unions to bargain with management? Are American companies going to see Cuba as the next haven for offshoring jobs? For $12 a month in Cuba vs. $12/hour in the U.S., who could resist pulling up stakes and moving to Cuba? And do we need what they sell? Cubans have cigars, rum and sugar galore, but Americans are hardly in need of more vices.
Second, is open trade good for Cuba? Being insulated from the economic power of the U.S. isn't necessarily such a bad thing. No U.S. corporations rule the day in Havana, no oversubsidized US crops flood Cuban markets and drive Cuban farmers from their land. Cuba has access to investment and technology from other countries and doesn't necessarily need what the U.S. sells. Nevertheless, being only 90 miles off the coast makes the U.S. a large natural market.
However, I've always been interested in whether there are alternatives to free trade and wonder if starting fresh with a country like Cuba might be an opportunity to try them out. It's not immediately clear what would happen on Day Two of an embargo-less trade relationship. As a member of the WTO Cuba would be obligated to provide US business all the benefits guaranteed in WTO rules, and vice versa. Cuba would become just another trading partner. But a separate bilateral agreement (a Fair Trade Agreement?) could pass muster in Geneva and be an accepted alternative. Here's what it might include:
-- All Cuban exporters to U.S. markets would have to guarantee that workers were paid a high wage and that factories and farms met strict international labor and environmental standards. Maybe not a U.S. wage, but at least a Latin American union wage.
-- Cuban exporters would require independent verification that the factory or farm has an independent union or is organized as a community cooperative. No sweatshops, no plantations.
-- Foreign investment would be allowed, but not foreign majority ownership or other form of management control. Any joint venture would be majority Cuban owned in Cuba, majority U.S. owned in the U.S.
-- U.S. and Cuban companies that fail to follow a strict set of Corporate Social Responsibility guidelines would be blacklisted from importing or exporting.
These conditions would obviously limit trade, but hardly more than the embargo does today. What trade that develops between the U.S. and Cuba would be fair and set a foundation for a genuinely just trade relationship. What do we have to lose?