ABOUT CUBAN FOREIGN TRADE

INTRODUCTION
The practice of trade with persons, institutions and countries beyond their own territory was since remote times a vocation and a destiny of Cubans. There is no need to go into details about the handling of merchandise with pirates and buccaneers, nor about the construction of vessels and rendering of services for the famous Spanish fleet. Enough to remember that the whole economy was designed on the strategic basis of sugar production for the international market. However, it was not until 1961 that an organization was created to conduct, execute and control foreign trade in an integral manner, implementing the policy of the young Revolution that lived its initial years. That was the Ministry of Foreign Trade.

Cuba foreign trade has had to face and solve two great transformations: the first was a consequence of the incipient blockade of the United States authorities, which began to take economic retaliatory mesaures against Cuba since the implementation of the first revolutionary laws. Thus they started an economic war that still persists. Cuba had to reorganize its economy completely, which meant not only searching for new markets for its export products and its imports but also readapting its whole productive apparatus to other technologies.

The second transformation came as a consequence of the disappearance of the European socialist countries, the dismembering of the Soviet Union and the reinforcement of the US blockade against the country. Cuba lost 80% of its markets, including the main destinations of its exports, the largest suppliers of its imports, a favorable and fair price relation, advantageous credits and steady links consolidated along many years.

All this gains greater significance in a country such as Cuba that is considerably dependent of the external sector of its economy. The dependence of Cuban economy on foreign trade - measured as the relations between imports and gross domestic product- ranges from 25 to 30%. However, its relevance is still greater if we take into consideration that many of the main production inputs come from abroad. This still includes, though in a decreasing manner, the oil imports. A great weight also lies in the imports of food and technology.

In the year 2000, the total trade exchange volumen exceeded 6 500 million dollars. Exports of merchandise increased by 12%, with an increase by 24% in non-traditional export products. On the other hand, imports increase by 14%, altough this figure decreases considerably if the effect of the oil prices is not taken into consideration. Imports of merchandise are still higher than exports. However, the income produced by tourism helps to compensate the total balance of goods and services, plus other income such as foreign investment, financing, family remittances and other entries included in the balance of payments.

MAIN EXPORT PRODUCTS
Sugar has traditionally been the main item in Cuban export and continues to hold a top position. However, in the last decade there has been a remarkable decrease in its absolute and relative weight. This has been due, in the first place, to the loss of the fair prices paid by the Soviet Union and other socialist countries. Besides, there has been a notable decrease of prices in the international markets, and Cuban sugar industry has experienced a strong impact that has reflected in its production levels, including sugar cane availability.

Nickel, second export item, has registered steady increases in both production and sales during the decade, and today notably approaches sugar.

Next comes tobacco exports, with favorable accomplishments during the nineties. Recently, a strategic alliance was reached with a transnational in this field, the French-Spanish company Altadis, for the commercialization of this product.

There follows a group of traditional products such as fish products, rum and cement, and of non-traditional ones such as fresh and industrialized citrus fruits, pharmaceutical and biotechnological products and those from the iron, steel and mechanical industry. These goods have had a positive development in recent years.

In general, the situation is characterized by a greater diversification and favorable prospects for the achievement of an increase in exports.

MAIN IMPORTS
Cuba continues to be a nation that depends on the import of energetic products for the operation and development of its economy. In spite of the progress in the national production of crude oil and the use of natural gas, this group of products still has great weight in imports, and the variations in their prices in the world market produce considerable impact in the balance of payments, as has happened in recent years.

Another very important line is that of food products, which make up for approximately 15 to 20% of the country´s imports. Also highly relevant are the purchases of machinery and equipment, which have grown considerably in recent years, as a result of the economic recovery.

EXCHANGE BY REGIONS AND COUNTRIES
The largest percentage in Cuba´s trade, by geographical areas, corresponds to Europe, which in 2000 represented approximately 45%. The second place is held by America with 40%, where Latin America and the Caribbean account for 28%, and the ALADI countries for 25%.

By countries, Venezuela has now become the main trade partner, while Spain goes down to the second place and Canada to the third. Holland, China and Russia follow in that order. Also important in Europe are the trade exchange volumes with France, Italy, Germany and other countries. In Latin America, Mexico, Argentina and Brazil, among others, have considerable importance. In Asia it is necessary to highlight Japan, where a process of recovery of trade is taking place as a result of the agreements reached on the renegotiation of the debt.

In 2000, Cuba commercialized with more than 160 countries and thus maintained its policy of opening and diversification of foreign trade.

MULTILATERAL AND INTEGRATION AGREEMENTS
Cuba´s entrance as full member in the Latin American Integration Association (ALADI) in mid 1999 has been followed in 2000 by the relevant Agreement on Trade and Cooperation signed with the Caribbean Community, CARICOM, which covers not only trade exchange but also other areas such as services and intellectual property.

In the Association of Caribbean States, of which it is a founder, Cuba has strongly supported the initiative presented by Colombia, Trinidad & Tobago and other countries, of negotiating a customs preference within the Association.

On the other hand, Cuba sets out to reach agreements that favor its trade relations with two important South American integration organizations: MERCOSUR and the Andean Community.

In a different context, it should be noted that Cuba recently joined the group of countries from Africa, the Caribbean and the Pacific, known as ACP Group. This will favor a better communication and development of links with the member countries of this organization.

It has also to be mentioned that Cuba was a founder of the General Agreement on Tariffs and Trade (GATT), and of the World Trade Organization that succeded it in 1995, with a wider approach to international trade.

Note: The information referred to was obtained from an article published by the magazine Cuba Foreign Trade, issue 4/2000, in the occasion of the 40th Anniversary of the Ministry of Foreign Trade, and the interview made to the Minister, Mr Raúl de la Nuez.

 
 
 
 
 
 

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