UF experts available to discuss possible changes in U.S.-Cuban relations

April 9, 2009

GAINESVILLE, Fla. — University of Florida experts on Cuba are available to discuss the major changes in U.S.-Cuba relations President Obama is expected to propose when he speaks at the Summit of the Americas in Trinidad April 17-18.

“The expectations are high among Latin American and Caribbean leaders that if Obama wants to improve relations with Latin America, then normalization of relations with Cuba is the starting point,” said Carmen Diana Deere, director of the Center for Latin American Studies.

Obama has already indicated he will relax Bush-era restrictions limiting visits of Cuban-Americans to the island and how much money they can send to relatives, said Terry McCoy, director of UF’s Latin American Business Environment Program.

“Many see this as the first step in rolling back the travel and trade embargo that Washington has maintained toward the Communist-ruled island since the 1960s,” McCoy said.

Deere said at least a half a dozen Latin American leaders have visited Cuba in the past two months, and they see a need for the U.S. to change a policy that is relic of the Cold War.

“But any move toward friendly relations with the Castro government faces strong opposition at home from the Cuban-American lobby that has been successful in defeating past attempts,” McCoy said.

William A. Messina Jr., an agricultural economist with the food and resource economics department in UF’s Institute of Food and Agricultural Sciences, said lifting the travel embargo is unlikely to have a significant impact for U.S. firms because 85 percent to 90 percent of Cuba’s food and agricultural purchases from the United States are bulk or intermediate commodities such as wheat and rice, and are used more to feed the domestic population than tourists. “So I would not expect the demand in Cuba for these products to increase appreciably if travel from the U.S. was open,” he said.

Messina is the founding co-director of his department’s comprehensive research initiative on Cuba’s agricultural sector.

To the extent that tourism increases earnings for Cuban workers, there could be some increased demand for commodities, he said. However, the Cuban government manages to keep workers’ income from increasing very much through the way it controls wage and compensation rates, he added.

Demand from more tourists for consumer-oriented products could increase, and the United States would be the closest supplier for these goods. However, current U.S. policy requires cash payment for all U.S. food and agricultural exports to Cuba, and Cuba is increasingly getting offers from other countries with open credit and extended terms, Messina said. Faced with this, U.S. exporters are operating at a competitive disadvantage, he added.

Purchases from the U.S. of highly perishable consumer-oriented food products for the tourist trade likely would increase. But because this is a relatively small proportion of total U.S. exports, he said, the dollar value of increased imports would probably not be very large.

Deere, a professor of food and resource economics, can be reached at 352-392-0375, ext. 801, or at deere@ufl.edu.

McCoy, a professor emeritus of Latin American studies and political science, can be reached at 352-246-6424, or at tlmccoy@latam.ufl.edu.

Messina can be reached at 352-392-1826, ext. 308, or wamess@ufl.edu.