Economic Development / Ocean

Forging New Ties

August 6, 2012
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When the Ana Cecilia sailed to Havana from a river terminal in Miami, it marked an important moment in world trade.

The ship was not the first to sail from the U.S. to Cuba, nor was it the first time goods have flowed in this long-dormant trade lane. But, trade and diplomatic relations with Cuba are lightening rod issues for the large population of immigrants from Cuba who have settled in the Miami area; that may make this event more significant than vessels sailing from other U.S. ports to Havana.

The Obama Administration has taken slow, cautious steps towards Cuba in anticipation of a leadership change there, which could open the door to normalization of relations. Whether or not President Obama is reelected in November, the change may not occur under his tenure.

Public opinion, however, moves much faster than governments. This was apparent when reports began circulating that the U.S. Olympic Team would wear uniforms in the opening ceremonies that were made in China. The “buy American” sentiment was raised to a fever pitch as there were even calls from the floor of Congress to burn those uniforms and replace them with U.S-made goods, reminding us why it’s good that trade policy is made in the executive branch and not the legislature.

There was no similar outrage when the 2002 Olympic Games were held in Salt Lake City, Utah and a country recovering from the anguish of the terrorist attacks the previous September clamored for official Olympic gear with USA logos – provided by Canadian apparel company Roots.

The Roots supply chain and its response to the unexpected demand for the USA logo gear is a story in itself.

Trade issues tend to cut both ways, stretching Newton’s law that for every action there is an equal and opposite reaction. Sometimes there is little reaction, and at other times, the reaction can be disproportionate.

After years battling in meeting rooms and even before the World Trade Organization, Mexico became frustrated with the U.S. for failing to live up to a provision of the North American Free Trade Agreement and continued to block Mexican truckers from operating beyond the U.S. border region. Mexico put in place a group of import tariffs on U.S. goods and left them in place until the U.S. took action on the trucking issue.

In trade, you must be careful about what message you send. China is a major source for U.S. consumer and other manufactured goods. It is increasingly becoming a destination for U.S. exports. If the message is, “We don’t like Chinese goods,” then what happens if China takes a “buy Chinese” position? Do U.S. autoworkers end up unemployed because exports stop?

As with the Ana Cecilia, sometimes a little slow steaming is a good idea to let emotions and reality reconcile.

 

Perry A. Trunick, Editor-in-Chief

trunickp@worldtradeWT100.com

Recent Articles by Perry Trunick

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