By Pilar Montes
HAVANA TIMES — The imminent lifting of restrictions on trade between the United States and Cuba is making me dream about Cuban products of excellence being sold around the world, and the island’s innovative medications, cigars and rum becoming available at US pharmacies and markets.
Even though the dispute settlement mechanism of the World Trade Organization voted against the United States’ Omnibus Appropriations Act of 1998, the legislation remains intact and stands as one of the main elements of the bundle of commercial and financial restrictions imposed on Cuba by Washington for over fifty years.
This US law is in violation of WTO precepts and the Paris Convention for the Protection of Industrial Property, prohibiting the sale of Cuban cigars and rum in the US market, while Cuba has permitted more than five thousand US brands and patents to benefit from their registration in Cuba throughout the 54 years of suspended diplomatic relations.
How will trade with the United States work after these restrictions have been lifted? Despite all its shortcomings, trade with Eastern Europe and the former Soviet Union in the 1970s and 1980s was conducted on the basis of preferences and credit that acknowledged the island was a developing country.
Today, Cuba’s trade with Latin America and the Caribbean has grown to account for nearly half of all foreign trade, and these transactions are complementary – that is to say, countries satisfy each other’s needs through it.
Cuba and most Third World countries, aware of the difficult conditions under which international trade is conducted, a situation in which industrialized nations expect poorer countries to open their doors to free trade (while they impose draconian terms, continue to subsidize their agricultural sectors and are not too receptive to technology transfers). Likewise, they are joining forces in their own defense more and more.
We would have to think about whether Cuba’s new relations with the United States if they will bring more equitable trade and the lifting of the current economic, commercial and financial restrictions.
What I’m certain of is that the current “New Deal” shouldn’t be styled after NAFTA, which, two decades after first being implemented, has brought considerable net losses, particularly for Mexico.
The Disastrous Effects of NAFTA
The 20-year assessment of the North American Free Trade Agreement (NAFTA) made by renowned US researchers Mark Weisbrot, Stephan Lefebvre and Joseph Sammut at the Center for Economic and Policy Research is enough to discourage even the most well-intentioned.
Since its implementation in 1994, NAFTA has not ceased to give rise to controversy. Its critics in different countries accuse it of having undermined key industry sectors, such as Mexico’s agriculture, or of having caused massive unemployment at US assembly plants, as many companies now prefer to set up shop in Mexico, drawn by cheap labor and the country’s geographical proximity.
The results yielded by the study reveal that Mexico ranks 18th out of 20 Latin American countries in terms of real per capita GDP growth, the most elemental measure of living standards.
Between 1960 and 1980, Mexico’s real per capita GDP almost doubled, growing by some 98.7 percent. Over the past 20 years, however, it has grown a mere 18.6 percent, almost half the growth rate reported by the rest of Latin America.
If NAFTA had been successful, the researchers point out, today Mexico would be a country with relatively high incomes, with a per capita income significantly higher than that of Portugal or Greece.
In addition, Washington would not have had any need to make migratory reform one of its domestic policy priorities.
The poor performance of Mexico’s economy contributed to a rise in emigration to the United States.
Between 1994 and 2000, the yearly number of Mexicans who immigrate to the United States shot up by 79 percent. The number of US residents born in Mexico doubled, going from 4.5 million in 1990 to 9.4 million in 2000. The figure reached a peak of 12.6 million in 2009.
In the current context of Latin American integration, I doubt Cubans will allow themselves to be sucked in by the promise of NAFTA-styled trade conditions.