Louisiana would benefit from freer trade but so would the Cuban dictatorship
There has been a great deal of talk in recent weeks about President Obama’s plan to normalize relations with Cuba. Obama has also made it his goal to lift the trade embargo, which has been in place for more than fifty years. While this policy has long been a topic of national interest, many people fail to understand the special significance of U.S.-Cuba relations to Louisiana.
There was a time when ferries carried people between New Orleans and Havana. The Cuban flag, as we know it today, was first flown not in downtown Havana, but on Poydras Street in New Orleans. A statue of Cuban independence leader Jose Marti stands in the neutral ground of the Jefferson Davis Parkway. Clearly Louisiana and Cuba share a connection. But does this mean Louisianans should be in favor of opening up trade and normalizing relations with Cuba?
Cuba is a tyrannical dictatorship with a history of human rights abuses. Normalizing relations means that Raul Castro and the ruling party in Cuba will have increased diplomatic strength internationally. It means they will escape punishment for a litany of human rights abuses that spans more than five decades. By normalizing relations, one can argue that the United States is sending a message that this is acceptable.
On the other hand, open trade between the two countries could have a lasting economic effect on Louisiana. Before the imposition of the trade embargo in 1962, New Orleans was the number one trading partner with Cuba and it could return to that status again. Louisiana is already the top state of origination for Cuban-bound goods. According to the World Trade Center of New Orleans, the port accounts for approximately thirty percent of the export market share. Increased trade would lead to more poultry and rice exports from Louisiana, a major benefit to Louisiana farmers and ports.
There is a counter-balance to this though, which is that Cuba will also have the ability to compete with the United States. This means companies in the United States would be competing with state-sponsored industries in Cuba. Their main exports are sugar, coffee, pharmaceutical and medical products, tobacco, shellfish, and citrus—which means those industries in Louisiana will be at risk. State-sponsored cooperatives will of course have an unfair advantage over companies based in Louisiana. There will not be a rush by Louisianans to invest in Cuba, either, since any and all investments there must be formed through a cooperative with the Cuban government. Since the government is communist and has a history of nationalizing industries, investments could hardly be considered safe.
Tourism has been a source of excitement for supporters of Obama’s proposed policy change toward Cuba. Making it easier for people to visit Cuba will provide opportunity for establishing connections, both economic and personal, between the people of Cuba and Louisiana. New Orleans has always been a destination for Cubans and maintains a sizable Cuban-American population. Cruise liners, touring companies, and travel agencies are eager to offer customers a vacation at the beaches of Havana. More flights leaving out of our airports, more people driving into New Orleans, and more hotel rooms booked are good for Louisiana.
Of course this increased tourism may not benefit the Cuban people and could indirectly hurt them. The resorts are government owned and operated, so any vacations spent in Cuba will help to prop up the dictatorship. Furthermore, if you buy a soft-drink, order alcohol, buy the weekly newspaper, use the telephone, or buy ice cream, you will be directly financing the Cuban government and the Castro brothers.
Louisianans will not benefit from strengthening the Castro dictatorship, but we could benefit from a trading partner. French economist Frederic Bastiat famously said, “When goods don’t cross borders, soldiers will.” The implication there is that if two countries do not have bonds formed through trade and exchange, that they are more likely to view each other as adversaries than partners. Louisianans would be wise to give careful consideration to both sides of this issue before committing to one.