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    US-Cuba Trade Relations

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    I need help with a couple of questions. I'm confused since we had no dealings with Cuba.

    1. Should the US seek to tighten the economic grip on Cuba? If so why? ( I dont understand how the US can tighten anything when we have no control over Cuba)

    2. Should the US normalize business relations with Cuba? If so what conditions might/should the US stipulate?

    3. What kind of trade relationship with the US would be in your best interest if you were Cuba's leader? ( i was thinking maybe cigars and coffee)

    4. How do the structure and relationships of the US political system influences the existence and specification of the trade embargo?

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    Solution Preview

    US- CUBA Relations
    1. Should the US seek to tighten the economic grip on Cuba? If so why?
    Economy of Cuba is repressed given the communist regime in the nation. The country is dominated by state owned companies connected to military and political elite; because of lack of dynamism, due to cronyism, corruption and bureaucracy, the economy continues to suffer (Index of Economic Freedom, 2016). The regulatory environment is too rigid and political environment is constrictive, because of which non-state sectors struggle to make their presence in Cuba. US had placed an embargo on exports to Cuba in 1960 after Cuba nationalized the refineries following the decision to cancel 700,000 tons of sugar imports into US. Cuba also refused to export oil because of which US was left at the mercy of Soviet Union. However United States is still fifth largest exporter to Cuba (Renwick, et. al, 2016). The UN also has been passing resolutions very year to condemn the impact of the embargo stating it to be in violation of the Charter of the United Nations and international law. All countries, except Israel and Uzbekistan are in favor of US embargo. Given the context of Cuban economy and ongoing restrictions on the country, U.S. should not tighten the economic grip on the country.
    2. Should the US normalize business relations with Cuba? If ...

    Solution Summary

    Overview of trade embargo by US on trade with Cuba, role of US political system in contributing to this and reforms to overcome this to allow free trade.

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