Avocado Price Spike Foreshadows Impact of Mexico Border Closing

Jorge I. Dominguez, PhD, is a retired Harvard University professor who has an extensive background as a Latin American scholar. As Antonio Madero Professor for the Study of Mexico, Dr. Jorge I. Dominguez has brought particular attention to the social and political issues impacting life in an emerging economy.

A recent MarketWatch article drew attention to the dangers inherent in President Donald Trump’s recent threats to close the US border with Mexico due to a surge in migrants from Central America.

A specific example is the popular Haas avocado, which jumped in price by more than 50 percent after the possibility of a complete border close became likely. Based on US Agricultural Department data, the wholesale prices of a carton of standard-sized avocados entering through Texas spiked to $44 in early April, from under $30. With the US importing some 90 percent of avocados from Mexico, the reliance on imports this year has been particularly acute, given a smaller-than-expected yield from Californian avocado crops.

Unfortunately for border protectionists, avocados are far from the most significant product entering the United States. The US auto industry is heavily reliant on parts made in Mexico for assembling vehicles, and many packaged food manufacturers source ingredients from Mexico. Other sectors with supply chains that would be adversely impacted by a border closure include technology, health care, and energy.

The bottom line is that many US business groups, facing what would be a major economic disruption, are arraying against a border closure that would impact commercial trade.

Marquis Who’s Who – Recognizing Excellence Since 1899

Jorge Dominguez has been a noted member of Harvard University’s professional community. He first served as director of the Weatherhead Center for International Affairs from 1996 to 2006. He also served in the Harvard Academy for International and Area Studies as its chair from 2004 to 2018, while also serving as the university’s vice provost for international affairs from 2006 to 2015. Aside from his leadership roles, Jorge Dominguez also lent his expertise as a professor from 1972 to 2018. Because of his achievements, he was recognized by the Marquis Who’s Who.

Marquis Who’s Who is an American publication that has become the standard for publishing comprehensive and reliable biographical data for professionals from a variety of backgrounds and industries. It was founded by Albert Nelson Marquis, who first published Who’s Who in America in 1899.

The Marquis Who’s Who family of publications provides a comprehensive look at the lives of today’s achievers and leaders from various industries from across the globe. Over the years, Marquis Who’s Who has adapted to technologies and trends. As the needs of its audience have evolved, the publication also expanded into other platforms. Aside from the traditional print publications, it has also introduced Marquis Biographies Online, a web-based medium designed to provide real-time access to the huge Who’s Who database of biographies.

Raul Castro Gives Speech at Communist Cuba’s 60-Year Celebration

 

Jorge Dominguez
Image: people.fas.harvard.edu

Former Harvard University professor Jorge Dominguez served as the chair of the Harvard Academy for International and Area Studies. Over the course of his academic career, Dr. Jorge Dominguez authored several publications on Cuba, its communist politics, and its relations with the United States.

On January 1, 2019, Cuba celebrated the 60th anniversary of the communist revolution spearheaded by the late former president Fidel Castro. In commemoration, 87-year-old Raul Castro, the brother of Fidel and the first secretary of the ruling Communist Party, delivered an address to the Cuban people and the world in which he reiterated Cuba’s openness to diplomatic engagement while criticizing the resurgence of confrontation by Washington. He particularly cited the current US administration’s dissemination of “falsehoods” to discredit Cuba and blame it for various ills in the region.

Dressed in full military attire, Raul Castro highlighted how, over the 60 years, Cuba had shown that it would not be cowed by threats. He followed by reiterating the island nation’s commitment to peaceful co-existence and its openness to economically beneficial trade. The widely publicized address was given at Santiago de Cuba, the burial site of Fidel Castro.

The State of US-Cuba Relations

A former Harvard professor focused on Latin American studies, Jorge Dominguez has published several books that explore Cuba’s political and economic landscapes. On June 27, 2017, Jorge Dominguez published an op-ed in the New York Times that discussed America’s relations with Cuba in the aftermath of Donald Trump’s June 16 speech in Miami in which he announced the cancellation of former President Obama’s deals with Cuba.

As of the date of publication of the op-ed, many of the previous US administration’s policies toward Cuba were still in effect, despite Trump’s assertions that he had canceled all deals made between former President Obama and Cuba. In fact, Trump had even ratified some of those policies, including military cooperation between the two states along Guantanamo’s perimeter, air and sea collaboration against drug trafficking, and security cooperation to halt undocumented migration. On the economic front, the United States’ commercial flights to Cuba were still in operation, and agricultural exports to Cuba were still flowing, as were financial remittances from the US to Cuba.

The reason for this? According to the US Treasury, the changes announced by Trump could take effect only when new regulations were issued. The White House later said that the issuance of new regulations could take months, which ensured that the status quo remains. As it stands, Trump’s reluctance to reopen bilateral negotiations and political debate over US-Cuba policy, despite his strong rhetoric, implies an openness to maintaining US-Cuba relations as they are.

Cuba – Challenges, Despite Unofficial Opening of Some Restrictions

Jorge Dominguez
Image: people.fas.harvard.edu

Most recently serving as Harvard University’s Department of Government Antonio Madero Professor for the Study of Mexico, emeritus, Jorge Dominguez focused on Latin America. Jorge Dominguez recently edited The Cuban Economy in a New Era: An Agenda for Change Toward Durable Development and was interviewed in-depth by Readara on the subject.

With Cuba under president Miguel Diaz-Canel having made moves to increase foreign direct investment (FDI) and authorize private businesses in some areas of the economy, there are still major challenges. Beyond the inherent inefficiencies of most of Cuba’s state run sectors, there are no officially sanctioned wholesale markets or international supply chains for imported products, which would allow critical supplies to be accessed at competitive prices.

As Professor Dominguez describes it, ordinary people must do “crazy and illegal stuff” to access needed supplies. The government on some level recognizes the necessity of this, as tourism is a positive area in the Cuban economy that would be hurt if those entrepreneurs who do access supplies illegally were shut down.

If the system whereby private restaurants are allowed to operate within the law was extended to other parts of the Cuban economy “it would make a great deal of sense.” Unfortunately, there is a lingering fear among the leadership that things might get out of control and their primacy would be threatened by U.S. government pressure.

Onerous Restrictions That Impair Cuba’s Access to Foreign Investment

 

Jorge Dominguez is a well-established Latin American scholar who recently retired from Harvard University as Antonio Madero Professor for the Study of Mexico. Also focused on the Caribbean, Jorge Dominguez edited the book The Cuban Economy in a New Era: An Agenda for Change Toward Durable Development (Harvard University Press, 2017).

Speaking about the significant challenges Cuba faces on its way to liberalization and a higher standard of living, Dominguez drew attention to obstacles placed in the way of foreign direct investment. With the Mariel Harbor freeport in existence for five years, those few companies that have gained authorization to operate in the free zone are not able to directly contract with Cuban workers. Investing in a medium-sized Cuban opportunity requires hiring all Cuban employees through a Cuban state-owned enterprise. Only after the state-owned enterprise has pooled and selected candidates, is the company able to choose the workers it needs.

The end result is that international companies are not given a level of “freedom of choice” that meets their threshold requirements for risky investments abroad. Beyond this, there is the issue of “sheer paperwork,” with so much bureaucracy involved at every decision-making level that it is difficult to make even modest projects coalesce in a timely manner.

Cuba’s FDI-Linked Agricultural Export Potential

 

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