Pressure by Cuba will not pay off

conor-luddy-239698 (2)

This past week, United States relations with Cuba were back in the spotlight. The Trump administration announced new restrictions on travel and trade with Cuba. The rollback of Obama’s measures towards the island’s government is a promise President Trump had made some months ago. The steps are reasonable, since  Obama’s agreement with Cuba was insufficient  and inequitable. The U.S. gave much and received little in return.

It has been more than a year since the normalization of relations. Clearly, Cuba has been unwilling to change rapidly, and past treaties were insufficiently in achieving a new robust track. One example is the continued discriminatory practices against Americans in the island. On a recently booked trip I had to Cuba, for example, it turned out that hotel rates were unjustifiably much higher for Americans than for Europeans, so I cancelled my plans.

The intention of the hotel was to give a silent retaliation for the years of economic embargo. The focus was on individuals that had no say on the matter and also no ability to change or improve American relations with Havana.

In fact, with the new tight restrictions, American individuals can no longer visit Cuba and groups need a license from the Treasury Department to visit the country. The Cuban tourism industry will feel the effects of U.S. government encouragement of Americans to stay in private houses and avoid hotels and restaurants connected to or owned by the military and security services.

After decades of adverse relationships, isn’t it time to bury the hatchet and bring out the peace pipe. For that, Cuba needs to take a step back and accept new policies which are fair, non-discriminatory and welcoming to visitors, both American and Cuban alike. As a fair trade and commerce relationship is not yet a reality, the United States government needed to demonstrate a stronger position in order to encourage appropriateness.

In addition, it is important to note that seeking improved relations with Havana does not mean forgetting the violations against human and civil rights during the Castro government. The population’s welfare is equally relevant as economic aspects in diplomatic relations, and actions such as expropriations and unjustified prison sentences should still be remembered and repaired. Curative marketing evaluates, carries physical accosting, debt, and destruction until true restitution is made.

Much remains to be done by Cuba, particularly since the United States has already long ago initiated important steps to reflect its own atonement. Cuban pressure to repay for earlier inequities will not work. Only if both parties commit to a fair relationship, will we see commerce between the countries grow and bring benefits and economic growth.

Pecan farmers pushing for fewer trade barriers

From wymt.com.

WASHINGTON (Gray DC) — The pecan farming business is booming. The industry is rapidly adding jobs in Georgia and billions of dollars to the economy in the South, but now this sector faces a stumbling block.

Pecan farmers are looking to send more of their product overseas. The Indian market looks promising, but U.S. farmers face high export costs. Now a bipartisan group of lawmakers is fighting to lower those rates.

Georgia pecan farmer Jeb Barrow has seen the pecan farming business change. He’s been a grower since 1974, and just in the past several years, he’s seen it go from a domestic market to an international one.

Now about a third of U.S. crops are shipped to China.

“That’s kind of a good news-bad news situation,” said Barrow.

“Anybody that reads the paper or looks at the news understands that some geopolitical event could occur tomorrow that could have that effect, so that’s kind of a sword Damocles if you will hanging over the industry’s head,” explained Barrow.

Ultimately, Barrow says it wouldn’t be wise for farmers to just rely on Chinese buyers. So, their interest turns to India, which has an exploding population and a diet rich in nuts.

“We have high hopes that the Indian market can – if we can get the tariff issue addressed – the Indian market can be developed and in time others as well, so everybody’s optimistic,” said Barrow.

The sticking point? U.S. tree nut farmers sending pistachios or almonds face, on average, a 10 percent tariff to ship products to India. That tariff, essentially a tax, is 36 percent for pecans.

“I think this is a huge opportunity for Georgia and the southeast. A lot of people down there have committed to pecans as a product for the future, and I think they’re right,” said Sen. David Perdue (R-GA).

Georgia Senator David Perdue and eight of his colleagues recently signed a letter to the U.S. trade representative, urging officials to negotiate lower tariffs.

“We know to grow our economy, we need open and free markets around the world. That’s what this is all about,” said Perdue.

Trade expert and Georgetown Professor Michael Czinkota says talks with India could mean a little give and take, but ultimately, both countries would benefit from streamlining trade barriers.

“From an altruistic perspective, we want their own people to do well. Because if they do well, then they buy more of our products and our relationships are likely to be better, so this whole idea of reducing the tariff on nuts is a good thing,” said Czinkota.

There are 15 pecan-producing states in the U.S., so if officials can help farmers crack into the Indian market, the impact could be tremendous.

Young Tigers Speak Out on Trade

This Fall, I am teaching a Georgetown University Seminar on International Trade – The Insiders, populated by our First Year Students. The insiders we talk with and about are politicians, Policy Analysts, lobbyists, Ambassadors, former cabinet members, and many other highly interesting people who have a lot to share with the students.

_DSC1510 (1)

During the lectures, we always try to expand our understanding, knowledge and dialogue about key trade issues. Recently, we discussed the “Blood Diamonds”, which are said to make life difficult as well as bring pleasure to those who own it. However, they should be rejected by recipients, since the money obtained from diamond trade may be used for revolutions, exploitations, and other types of harm to mankind.

Since money is fungible, it occurs to me that it is only a matter of time for us to find other goods to be “facilitators of evil”. Of course, the main question is: what products or services will be the Next Nefarious “Blood Products” around the world?

Here are the top 16 issues which, after substantial thought and discussion, emerged from the minds of the young tigers who are participating on the seminar:

  • Gasoline: Oil wars continue to increase;
  • Palm oil: Palm trees are being cut down at an alarming rate, causing negative effects on the environment;
  • Actions and transactions over the internet: Blockchain technology may mislead;
  • Computer parts: Scattered rebel groups will use technology in their favor;
  • Advanced technology use: Putting in danger human rights and leveraging child labor;
  • Coffee: Coffee makers exploit land, labor, and economic systems;
  • Smartphones: We are more and more dependent on technology;
  • Pharmacology: Aggregated demand will increase market share and profit margins unacceptably;
  • Dairy: Veganism has already grown by 500% in the U.S.;
  • FIFA World Cup: Migrant workers with long shifts may lead to dissatisfied processes;
  • Robots/Artificial Intelligence: They will eventually do everything better than humans;
  • Cryptocurrencies vs current currencies: Easier for criminals and terrorists to conduct exchanges;
  • Oil: Impending energy shortage by 2030 will lead to the usage of oil as a new form of currency;
  • Biofuels (fuel-producing algae): Fossil fuels are highly valuable but their reserves are in decline;
  • Antiquities and artifacts: Terrorist groups like the Islamic State begin to claim physical property and presence for themselves;
  • Endangered species: Harming the natural world and exploiting species.

I always say that is wise to listen to these young minds, they will be in command soon. And according to them, these are the issues of the day. Remember, forewarned is forearmed.

Martha Lawless speaks to students at the First Year Seminar

It is a pleasure to have Ms. Martha Lawless, chief of the Services Industry Research Division of the U.S. International Trade Commission, as guest at our Seminar!

Webp.net-resizeimage

What a great opportunity for the students to learn about her work directing the USITC’s project on Global Digital Trade for the U.S. Trade Representative. She is a regular contributor to USITC’s research, focused on reporting the effects of new technology on the services and manufacturing sectors, the impact of policy barriers to trade in services, and the influence of corporate finance and other competitiveness factors on international trade.

Ms. Lawless was the project leader and primary author for the USITC’s two previous reports on digital trade, delivered to the Senate Finance Committee in 2013 and 2014.

Prior to joining the USITC, she was the director of the Corporate Risk Advisory Group at UBS Investment Bank in London, advising over 200 multinational companies on currency, interest-rate and commodity risk management, and Lecturer in Economics at Sussex Downs College.

Ms. Lawless received an A.B. in History and Economics magna cum laude from Harvard University, M.B.A. in International Finance from Yale University, and M.Sc. in Economics from Trinity College Dublin.

To know more about the First Year Seminar previous guests, please click here.

Troy Fuhriman and Jozsef Szamosfalvi at the First Year Seminar

This week, the students had the opportunity to hear the insights of two professionals specialized in international trading financing, Troy Fuhriman and Jozsef Szamosfalvi, who kindly accepted the invitation to be our guests yesterday, Nov.1st.

Mr. Fuhriman, Professor Czinkota and Mr. Szamosfalvi

Mr. Fuhriman, Professor Czinkota and Mr. Szamosfalvi

Troy Fuhriman (left) is the Senior Vice President and General Counsel of the Export-Import Bank of the United States (EXIM). He helped analyze the rationale, history, tradition and needs of EXIM Bank. He also discussed the controversy surrounding the existence of EXIM Bank and highlighted the existence of competitive organizations. 

_DSC1485 (1)

Mr. Fuhriman has been one of the very early Trump’s appointees at the official US Government export credit agency, where he has served since January 2017. He has also been an Associate Professor of Law at the Kyungpook National University, in South Korea, for seven years.

Mr. Fuhriman also co-founded and managed Goldfinch Limited and Stellar Photonics for 14 years.

Mr. Jozsef Szamosfalvi (right) is the Managing Director at ExWorks Capital, a senior secured debt fund focused on international trade financing. He shared his thoughts from the perspective of private sector, especially on trade finance. He is also the Managing Director at the financial advisory firm Interlink Capital Strategies, where he focuses on emerging markets, especially for projects related to infrastructure, financial and energy sectors.

WechatIMG173

Mr. Szamosfalvi is also part of Georgetown University as an adjunct instructor for international trade and emerging market finance at the McDonough Business School.  He kindly invited our students to consider applying for work at his firm.

To know more about the First Year Seminar previous guests, please click here.