Our brands in Havana

What embargo? U.S. to Cuba trading is thriving.


Cuban-American hostilities appear to be as harsh on the surface as when the United States first imposed an embargo on trade with the Caribbean island in 1962. Consider the fuss over Cuba's participation in the World Baseball Classic in the United States and Puerto Rico in March. The dispute centred on American concerns that sanctions would be violated if the Cuban team won prize money.

But the fact is, trade from the United States to Cuba is thriving, despite the sanctions. The U.S. is actually the third-largest exporter to Cuba after Spain and Venezuela, and ahead of Canada. According to U.S. Department of Commerce figures, American exports to Cuba rose 5,000%, to US$361 million, in 2005, from US$7 million in 2000. Cuba imports everything from cereals to meat, wood and furniture, carbonated beverages and shoes from the States.

There is some discrepancy in official export figures. DoC statistics show that the U.S. exported US$400 million of merchandise to Cuba in 2004, but the CIA World Factbook puts the figure at US$583 million. What's more, neither figure takes into account U.S. exports to Cuba through Canada. Nor do they include exports to Cuba by offshore subsidiaries of such U.S.-owned companies as Coca-Cola and Nike. Merchandise exported from the U.S. to Cuba via Canada totalled $127 million in 2005.

One trader, encountered at the airport in Havana en route back to Canada, said he has exported everything from “soup to nuts” from the U.S. to Cuba via Canada over the past 15 years. Wary of provoking Washington, he declined to give his name.

Small wonder. The stakes are high for Canadian companies that end up on the U.S. government's radar for breaching the embargo. The 1996 Helms-Burton act allows the United States to sanction foreign-owned companies that invest in property confiscated by the Cuban government after the 1959 revolution. For example, nine executives of Toronto-based Sherritt International Corp. and their families were not allowed entry into the U.S. back in 1996, because of the company's connections to Cuban nickel and cobalt mining operations.

But maintaining the sanctions is clearly complicated. The Cubans finished second to the Japanese in the World Baseball Classic and, as a result, are entitled to 7% of profits earned. The amount, which they offered to donate to charity, is not yet determined. An arrangement is being forged among World Baseball Classic, the Department of State and the Department of the Treasury to uphold the “legal scope and the spirit of the sanctions,” said Molly Millerwise, a spokesperson for the Treasury, by e-mail. Good luck with that.