Hemispheric Trade Alignments and the Trade Options for Post-transition Cuba.
Joseph M. Perry, Louis A. Woods and Jeffrey W. Steagall Department of Economics and Geography University of North Florida
[1] The authors wish to thank Prof. Maria Dolores Espino and other attendees of the Third Annual Meeting of the Association for the Cuban Economy for their helpful comments.
[2] Arturo Villar, "The Dollarization of the Cuban Economy," The Wall Street Journal, Vol. CCXXII, No. 6 (July 9, 1993), p. A9.
[3] Jose de Cordoba, "Survival Tactics: Its Economy Dying, Cuba Seeks Salvation in Dollars and Exiles." The Wall Street Journal, Vol. CCXXII, No. 12 (July 19, 1993), pp. A1 and A12.
[4] Ali M. El-Agraa, International Economic Integration (New York: St. Martin's Press, 1982), Introduction; International Trade (New York: St. Martin's Press, 1989), pp. 151-161.
[5] Jan Tinbergen, International Economic Integration, Second edition (Amsterdam: Elsevier Publishing Company, 1965), pp. 77-79.
[6] DeLisle Worrell, "U. S.-Caricom Free Trade", in Sylvia Saborio, editor, The Premise and the Promise: Free Trade in the Americas (New Brunswick: Transactions Publishers, 1992), pp. 217-231; Kenneth O. Hall, "The Caribbean Community", in Ali M. El-Agraa, International Economic Integration (New York: St. Martin's Press, 1982), pp. 190-205; Karl M. Bennett, "An Evaluation of the Contribution of CARICOM to Intra Regional Caribbean Trade," Social and Economic Studies, Vol. 31, No. 1 (1982).
[7] U. S. Department of Commerce, Business America 111:15 (August 13, 1990), inside front cover; Jay Dowling, "Caribbean Common Market Has Broad Economic Agenda," Business America 113:6 (March 23, 1992), p. 7; Michael Becker, "Caricom Drifting? Two steps forward, one step backward," Caribbean Week 4:21 (July/August, 1993), pp. 1-2.
[8] Dowling, loc. cit.
[9] Ibid.; U. S. Department of Commerce, Business America 112:15/16 (July 29/August 12, 1991), inside front cover; Jay Dowling, "Central American Economic Integration Proceeds," Business America 113:6 (March 23, 1992), p. 5; El-Agraa, International Trade, p. 157; "At 4th C. A. Summit, presidents agree open border policy on right track," Honduras This Week 6:30 (August 7, 1993), pp. 1-2.
[10] For the full text of the agreement, see Costa Rica, Oficina de Apoyo de la Presidencia de la Republica, Procedimiento para Establecer la Paz Firme y Duradera en Centroamerica (San Jose: Imprenta Nacional, 1987). An official, but insightful, analysis of the unrest in Central America prior to the Guatemala City accord of 1987 is presented in U. S. Department of State, The Challenge to Democracy in Central America (Washington, D. C.: U. S. Government Printing Office, October, 1986).
[11] For succinct background coverage, see Thomas Bennett and Craig S. Hakkio, "Europe 1992: Implications for U. S. Firms," Economic Review (Federal Reserve Bank of Kansas City), April, 1989, pp. 3-17.
[12] See Gita Bhatt, "Europe 1992: The quest for economic integration," Finance and Development 26:2 (1989), pp. 40-42.
[13] Ibid. For a rather irreverent, but very discerning inside look at recent attitudes and negotiations inside the EC, see Jane Kramer, "Letter from Europe," The New Yorker, July 29, 1991, pp. 63-73. For background information on the European Economic Area, see Marie Treinen, "European Economic Area: Extends the EC's Single Market Across Western Europe," Europe Now: A Report (Washington, D. C.: International Trade Administration, July/August, 1992).
[14] A good summary of this controversy appears in Jacob A. Frenkel and Morris Goldstein, "Europe's Emerging Economic and Monetary Union," Finance and Development 28:1 (1991), pp. 2-5.
[15] Jack L. Hervey, "Europe at the Crossroads," Chicago Fed Letter, No. 72 (August, 1993), p. 3.
[16] Craig VanGrasstek and Gustavo Vega, "The North American Free Trade Agreement: A Regional Model?", in Saborio, op. cit., pp. 157-160.
[17] For a succinct presentation of the operation of EAI since its promulgation, see U. S. Department of Commerce, Business America 112:14 (July 1, 1991), p. 10. A more popular, and less official view, is given by "Turning the Hemisphere into a Free Trade Bloc," Business Week, December 24, 1990, p. 37, and "Mexico: A New Economic Era," Business Week, November 12, 1990, pp. 102-110.
[18] Business America, 112:15/16 (1991), inside front cover.
[19] Atlas of United States Foreign Relations, p. 33.
[20] Business America 111:15, inside front cover.
[21] See Business America, 112:14 (1991), p. 20, and Américas, 43:2 (1991), pp. 2-3.
[22] "The Mercosur Countries are Potentially a Huge Market," Business America 113:6 (March 23, 1992, p. 8.
[23] Alberto Pascó-Font and Sylvia Saborio, "U. S.-Andean Pact Free Trade", in Sylvia Saborio, editor, The Premise and the Promise: Free Trade in the Americas (New Brunswick: Transactions Publishers, 1992), pp. 233-234.
[24] Laurie MacNamara, "Andean Region Makes Integration Effort," Business America 113:6 (March 23, 1992), p. 5-6.
[25] Business America, 112:15/16 (1991), inside front cover.
[26] The broad outlines of the CBI program are presented in U. S. Department of Commerce, 1989 Guidebook: Caribbean Basin Initiative (Washington, D. C.: U. S. Government Printing Office, October, 1988). The basic enabling legislation was the Caribbean Basin Economic Recovery Act, passed in 1983 by the U. S. Congress, in immediate response to some of the economic problems caused by the 1981-1982 recession. Note that CBI follows the spirit of the Generalized System of Preferences (GSP), but is legally and administratively different. GSP allows about 3,000 items from developing countries duty-free into the United States. CBI is
much more limited in geographic scope, and more selective in trade items. See also Louis A. Woods, "The Caribbean Basin Initiative and Its Impact on Belize," paper presented at the annual meetings of the American Popular Culture Association, Montreal, March, 1987.
[27] Loc. cit., pp. 3, 7-10. The eligible, but non-participating countries, are Anguilla, Cayman Islands, Suriname, and Turks and Caicos Islands. See also U. S. Department of Commerce, 1991 Guidebook: Caribbean Basin Initiative (Washington, D. C.: U. S. Government Printing Office, November, 1990), pp.1-2.
[28] For details, see 1991 Guidebook, pp. 57-61.
[29] Loc. cit., pp. 7-10.
[30] Basic data and analysis for this section come from U. S. Department of Commerce, United States Sugar Policy: An Analysis (Washington, D. C.: U. S. Government Printing Office, April, 1988), passim. The report was prepared primarily by Ralph Ives and John Hurley of the
International Trade Administration, DOC. Basic conclusions are strongly critical of the sugar program, arguing that it harms both the U. S. economy and the economies of its trading partners.
[31] Loc. cit., pp. 1-3.
[32] Loc. cit., pp. 1-3, 23-25. Increasing use of non-cane sugars and sugar substitutes are among the reasons for the slowing consumption trend.
[33] Loc. cit., pp. 41-43, 46, 62, 97.
[34] Mordecai E. Kreinin, International Economics: A Policy Approach, Sixth edition (San Diego: Harcourt Brace Jovanovich, Publishers, 1991), pp. 428-429.
[35] Ibid.; and Richard E. Caves, Jeffrey A. Frankel, and Ronald W. Jones, World Trade and Payments: An Introduction, Fifth edition (Glenview, Ill.: Scott, Foresman/Little Brown Higher Education, 1991), pp. 280-282.
[36] See Thomas Grennes, International Economics (Englewood Cliffs, N. J.: Prentice-Hall, Inc., 1984), pp. 202-214. GATT provisions permit discrimination in favor of certain trading partners when the countries are members of a customs union, such as the EEC. GSP authorizes tariff preferences for low-income countries. The EEC established tariff preferences for 91 low-income countries, beginning in 1971. The United States followed with its own preferential
system in 1976. The signatory low-income Caribbean countries covered by Lomé I include the Bahamas, Barbados, Dominica, Grenada, Guyana, Jamaica, St. Lucia, Suriname, and Trinidad and Tobago. The remaining countries are located in Africa and Oceania. The group is popularly known by the acronym, "ACP", for African, Caribbean, and Pacific Group of States. It now includes more than 60 developing countries. See Ellen Frey-Wouters, The European Community and the Third World (New York: Praeger, 1980), pp. 283-287, and U. S. Department of State, Atlas of United States Foreign Relations, 2d ed. (Washington, D. C.: U. S. Government Printing Office, December, 1985), p. 28.
[37] United States Department of State, Background Notes - Cuba (Washington, D. C.: U. S. Government Printing Office, 1992), pp. 1-2; Central Intelligence Agency, World Factbook (Washington: U. S. Government Printing Office, 1993). For a discussion of some of the problems of economic measurement, see Jorge F. Pérez-López, Measuring Cuban Economic Performance (Austin: University of Texas Press, 1987), passim; J. P. Rathbone, "The Cuban Economy: A Twelve Month Review," paper presented at the Third Annual Meetings of the Association for the Cuban Economy, Miami, Florida, August 26-28, pp. 1-3.
[38] Central Intelligence Agency, World Factbook (Washington, D. C.: U. S. Government Printing Office, 1992), p. 86.
[39] Ibid.
[40] Jose de Cordoba, "Survival Tactics: Its Economy Dying, Cuba Seeks Salvation in Dollars and Exiles," The Wall Street Journal, Vol. CCXXII, No. 12 (July 19, 1993), pp. A1 and A12. Also see Caribbean Week references above.
[41] Susan Kaufman Purcell, Cuba's Cloudy Future (Washington, D. C.: The Cuban American National Foundation, 1990, passim