– Remittance levels will be raised from $500 to $2,000 and the remittance forwarders no longer will require a license to forward money to Cuba
– Exports of “building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment” will be permitted
– General licenses will be issued for travelers in the 12 current categories of authorized travel…
– Travelers can come back with $400 in goods, of which only $100 can be alcohol or tobacco products
– Banks can open correspondent accounts in Cuban financial institutions to facilitate authorized transactions
– The rules will be revised to make clear that sales of cash against documents of title (e.g., bills of lading) are permitted for authorized exports and to remove the old rule that cash had to be paid prior to the shipment of the goods
In other words, Cuba will remain heavily sanctioned.
However, while the focus is often on what exchanges can’t take place between the United States and Cuba, it is worth noting that some trade can and does occur between the two countries. Although imports from Cuba are not permitted by the US government, certain exports are when accompanied by a license from the Department of Commerce. As a result, American medicine, medical devices, food, and agricultural commodities reach Cuban consumers.
In fact, despite decades of sanctions and narrow allowances for trade, the United States exported nearly $400 million in these goods to Cuba in 2013. This places the US eighth among Cuba’s top trading partners.
Cuba’s top trading partners in 2013
1. China……………….$1,879,420,040
2. Spain……………….$1,312,691,058
3. Canada……………….$938,255,350
4. Brazil………………….$624,791,450
5. Italy……………………$448,898,488
6. Mexico………………..$386,439,329
7. France………………..$370,223,210
8. United States………..$358,217,032
9. Venezuela……………$354,370,465
10. Argentina……………$318,726,085
Source: UNComtrade
Surely there are further gains in trade to be made between Cuba and the United States. Cuba’s top source of wheat is France, across the Atlantic. Argentina is its top source of corn. Cuba gets most of its cars from China, as well as most of its manufactured goods, seconded by Spain. These are goods the United States is more than capable of exporting to Cuba, especially since the two have coastlines only 90 miles apart.
Cuba too, has much to offer the United States. For example, China imports millions of dollars’ worth of Cuban sugar cane and nickel each year. In 2013, Spain acquired $86 million in Cuban cigars as well as $52 million in Cuban rum. And the United Nations trade database shows that in 2013, Canada imported $453 million in “commodities not specified according to kind,” a figure which includes souvenirs brought back by tourists — one in which Americans may yet rival with the allowances to tourism proposed by Obama.
Perhaps the president’s plan to lessen sanctions against Cuba will lead to further trade liberalization and will mark the first step to a more prosperous future for both countries.