Line of Cuba credit
Thursday, October 1 2009
The US$10 million line of credit being established by the Export Import
Bank (Eximbank), for the benefit of manufacturers, to facilitate the
export of our manufactured goods to Cuba has the potential both to
stimulate expanded trade with the communist island and to create
additional employment opportunities in this country.
A major plus is that Trinidad and Tobago manufacturers will be able to
get paid up front, instead of having to wait a whole year as at present
under Cuba's existing 365-day line of credit.
In addition, the move by the Eximbank means that TT manufactures will be
able to land in Cuba and reach Cuban shelves at a lower cost than obtain
today, thus making them more competitive. In turn, the Eximbank line of
credit will free up manufacturers' cash flows.
In the meantime, Cuba's 365-day line of credit meant that the length of
time it took TT manufacturers to get paid sent up the final level of
bank charges and other additional costs.
As TTMA President Greig Laughlin has pointed out, Eximbank's line of
credit facility would make it easier to get Trinidad and Tobago goods
into Cuba and business people would be able to get their cash flowing
Addressing a trade forum on September 23 at the Trinidad Hilton and
Conference Centre, hosted jointly by Trinidad and Tobago's Trade
Facilitation Office in Cuba and the Ministry of Trade, Laughlin noted
that one of the challenges experienced by business people wanting to
enter the Cuban market was the length of time it took to get paid.
This TTMA/Eximbank strategy comes at an opportune time when the Cuban
import market is poised to expand because of initiatives by the US which
will have the effect of pumping more money into the Cuban economy,
hamstrung for decades by a US embargo on trade with and travel to Cuba
Already the American Government has eased restrictions with respect to
the repatriating of funds by Cubans domiciled in the United States.
In addition Cuba is anxious for the current US Administration, led by
President Barack Obama, to completely lift the embargo.
Collectively, these measures will lead inevitably to a larger Cuban
import market and hopefully, more significant Trinidad and Tobago-Cuba
Today, Cuba with a population of 11.3 million, a Gross Domestic Product
(GDP) of some US$33.9 billion and an import market of several billion TT
dollars, is poised to substantially increase its GDP.
The Eximbank thrust will lead to greater penetration of the Cuban market
by Trinidad and Tobago business people, whose principal exports had long
been in energy and energy-related products.
The move represents a most important step which should further develop
Trinidad and Tobago's trade with Cuba. The initiative, not unlike the
1999 Trade and Economic Cooperation Agreement, favourably positions
Trinidad and Tobago to better access Cuba's profitable market.
Trinidad and Tobago's Newsday : newsday.co.tt : (1 October 2009)