Back to Homepage Caribbean History Caribbean until 1900 1900s Caribbean Caribbean Area Bahama Islands Jamaica, Cayman Islands, Turks and Caicos Islands, Morant and Pedro Cays Leeward Islands Windward Islands Barbados Trinidad and Tobago Guiana Honduras Martinique   Guadeloupe and Dependencies French Guiana Clipperton Island The Territory of Curaçao Surinam Economy The International Importance of the Banana Trade United States Trade with the Caribbean Oil on the Caribbean

United States Trade with the Caribbean Developments in Caribbean trade during the past generation have not failed to draw the attention of citizens of the United States to its rapidly changing economic conditions. Nevertheless, few realize that for the United States the growth of its imports and exports to this part of the world tends to bring the importance of this trade back toward a standard reached a century and a quarter ago. Before the American Revolution, the coast towns of the British North American colonies had a lively interest in the trade to the West Indies and in the policies which the home government and other European states adopted which bore upon the development of that commerce. This interest in Caribbean trade continued when the thirteen colonies became independent. Of the total merchandise exported from the United States in 1801, 58.3 per cent went southward—apparently all of it to the Caribbean—to the British West Indies, 21 per cent, to the Spanish West Indies other than Honduras and Campeche, 19 per cent, and to the French West Indies, 15 per cent. Only in the next year is the first small shipment to South America, to Brazil, mentioned. Later, developments such as the westward expansion of the United States, the increase in the export of foodstuffs and raw materials to more advanced countries of Europe, and the political and economic difficulties of the Caribbean region during the nineteenth century, lessened the relative importance of the north and south exchanges even though their absolute totals increased. By 1830, about a fifth of the exports of the United States and about a sixth of its imports went in the Caribbean trade. Even this proportion was not kept up. The tendency was downward and in the eighties and nineties the proportion of the exports sank to about a twentieth. Imports had a more rapid growth, but they also fell in relation to the total and at the end of the century were less than 10 per cent. Foreign trade of the United States had, of course, in the century that was coming to an end, grown by leaps and bounds, and even these low percentages were not inconsistent with steadily rising totals in dollar values and in quantities. The exports to the Caribbean, worth less than $10,000,000 in 1821, had risen to a value of $56,500,000 in 1900, and the imports had increased from a similar amount to a value of $76,300,000. New conditions which affected the trade of the Caribbean as a whole, after the turn of the century, gave a special impulse to the trade of the United States. Industrial development to the northward gave Americans greater interest in the region because its nearness made it one of the easiest to reach among foreign markets and sources of supplies. Its long coastline made it easily accessible in ocean commerce and to a degree lessened the influence of the inadequate internal communication facilities. A gradual improvement in public order helped to increase production by the local populations and the development of enterprises supported by foreign capital. In later years, too, the change of the United States from a debtor to a creditor position among the nations of the world increased the amount of American capital seeking employment both in local production and in international commerce. As a result the amounts of trade going north and south not only greatly increased but increased so much that they came to be a greater proportion of the total in spite of the very rapid expansion of American foreign trade. The Caribbean came to take roughly half of the rapidly increasing exports to Latin America. Formerly, largely routed out of New York, this trade spread to other ports, especially those of the gulf coast. The markets increased their demands for both animal and vegetable food products raised on American farms, and as their economic development progressed they took larger amounts of the textiles, machinery and vehicles, chemicals, and specialties which were the product of American factories. In the opposite direction, the region became a shipper to the United States of its great staples to even greater value. It became the great supplier of tropical fruit to the American market, shipping all but an insignificant portion of such imports; it became the second most important source of coffee supplies, the greatest source of crude petroleum imports, and practically the only source of imported sugar. The economic significance of the advance in the various areas in the foreign trade of the United States since 1900 is shown in the tables on pages 224 and 225 in which the prewar rise in the leading units of both import and export trade and the marked increase since the World War are well brought out. The totals of this trade do not fully reflect its importance, for it is to a high degree commerce which supplies raw materials for unfilled American needs. The Caribbean furnishes to the United States, in the main, goods which the latter does not produce or produces in quantities insufficient for the supply of the domestic market. These are chiefly unmanufactured foodstuffs and industrial materials. On the other hand, the American exports to the Caribbean are distinctively manufactured goods. The export of these means that there are sold abroad goods the value of which represents in high degree the wages of labor and the profits of industry. For these reasons the import of a million dollars' worth of goods from a highly industrialized region like Europe—goods made up in greater part of manufactured articles—and exports of a similar value to Europe made up largely of raw materials have less interest for the American manufacturers and workmen than an equal value of trade with the Caribbean in which the characteristics of the merchandise are reversed. If the trade of these areas has become of increasing significance to the United States, it is equally or more true that the trade with the United States has taken on new significance for them. The proportion of the total imports and exports drawn from and destined to the United States has shown a tendency to rise. In each of the larger groups, the United States has come to be the greatest individual supplier and in many instances the greatest individual buyer. In some cases, the United States accounts for more than half of the total trade inward and outward. Out of these detailed figures of trade rises an inescapable conclusion as to the relation which the United States bears to its economically weaker neighbors to the southward. However diverse their climates, resources, populations, and governmental organizations, they are bound to the United States by economic interests stronger than any divergent influences which may from time to time affect their public policies. Under the influence of nationalistic programs and international jealousies, the various governments have, in some periods in the past, disturbed and checked the commercial interchange which neighborhood and the contrasting character of national needs encourage. They may do so in the future, but those who have in their hands the formulation of public policy will do a great service for the people they represent when they emphasize the importance of maintaining and strengthening the important economic factors which work for unity of interest among the American nations. The general exports from individual countries show some curious shifts since the beginning of the century reflecting in many cases the gradual increase in the importance of the United States as a buyer and the decline of European purchases. The relative international positions in Cuban trade in 1900, 1913, and in current years show no important changes. One such change may be in the course of development, for the great increase in the Cuban production of sugar under the stimulation of conditions created by the World War has pushed the crop up beyond the capacity of the American market. This market is now open to the Cuban product only under higher tariff payments than were formerly exacted and under competition with increasing amounts of tariff-free sugars from Porto Rico, Hawaii, and the Philippine Islands. As a result Cuba has been forced to send increasing amounts of her sugar exports to markets other than the United States and to turn her attention to the possibility of diversifying her national production, thus to broaden her international economic outlook. Haitian sales continue to be made to almost half of their value in France where the coffee of the island enjoys a market established in the colonial period. Germany, which was a strong competitor in 1913, in later years has fallen back sharply, but the markets in a number of countries formerly unimportant for Haiti now take almost a third of the exports. Over half of Dominican products were sold in the United States at the beginning of the century, but the American share of the total now shows a tendency to decline. British areas, on the other hand, have advanced their purchases with the growth of the Dominican sugar industry and in some years now buy half of the total exports. The destinations of Central American exports furnish a number of interesting contrasts reflecting not difference in sorts of crops raised so much as established trade preferences. Honduras, in which the fruit trade holds so dominant a position, sells important quantities only to Great Britain and the United States, the proportion going to each varying sharply with the trade policy adopted by the producing interests. The relatively small trade of Nicaragua goes to the United States chiefly, with lesser amounts to France, Germany, and Great Britain, all of which formerly took larger shares than at present. Costa Rica ships its bananas chiefly to the United States and its coffee to the United Kingdom which in recent years absorbs more than half of all exports. The distinctively coffee republics of Central America, Guatemala, and Salvador furnish interesting illustrations of trade preferences. The former ships its bananas and in recent years increasing quantities of coffee to the United States, but the greatest market for its coffee continues to be Germany, as has been the case in normal times for a generation. Salvador, the only one of the Central American states which has no banana export industry, also finds its coffee market in the United States in recent years less attractive than that in Germany which now takes about one-third of the total shipments. The rapid advance of Colombian exports accompanying better water communications, the rise of coffee production, and the growth of the oil trade have involved greatly increased shipments to the United States. In 1903, slightly over half of the exports went to the northern republic which now absorbs more than four-fifths of the total. All other competitors showed marked losses. On the other hand, Venezuela shows a sharply contrasted development. In the period before the war, the United States took about a third of the goods sent abroad and Germany was rapidly increasing her purchases. In later years, both of these countries show a relative decline. The United States now takes less than a fourth of the total, and nominally the Netherlands absorbs over half of the exports. These figures, however, are deceptive, for in the great development of Venezuelan oil, the Dutch Colonies off the coast have become an entrepôt in the foreign trade, and for this reason the real destination of the shipments passing to Curaçao and Aruba is obscured. The general advance of exports to the United States, as has already been indicated, is partly due to its geographical position and to its increased industrial and financial strength. Another important influence is the American commercial policy adopted toward the staple Caribbean products as reflected in tariff charges. In marked contrast to European countries, which as a rule levy relatively high duties on articles which on the Continent are characterized as "colonial products," the United States, except as to sugar, has followed the policy of admitting them duty-free or on payment of low customs rates. All but one of the chief Caribbean exports enter the United States free of duties. As a result, less than 12 per cent of the exports from Central America entering the United States pay any duty at all. On goods from the West Indies other than Cuba, less than 8 per cent pay duties, while from Colombia and Venezuela only about 0.3 per cent of the value of all shipments is subject to any charge whatever. Under these conditions, the Caribbean has found the United States, for the greater portion of its products, a great free market of rapidly growing consuming capacity unequaled anywhere else in the world. Analysis of the imports into the Caribbean also shows interesting changes in the origin and character of the goods purchased. The nearness of the United States to the market, the fact that its trade enjoys in all the markets "most favored nation" treatment, and in Cuba special concessions given to the trade of no other nation, the development of better steamship services from American ports, the growth of American experience in exporting, and the heavy local investment of American capital drawing after it purchases of American goods for enterprises controlled by Americans, all tend to give to American shipments to the region an even greater share than is usually taken of its exports. Over three-fifths of Cuban purchases continue to come in recent years from the United States and no other supplier furnishes 5 per cent of the total. The Dominican Republic is to about the same degree dependent on American supplies with the United Kingdom and Germany disputing about evenly for some 12 per cent of the trade. Central America is increasingly an American export market. In none of the republics do American goods make up much less than two-fifths of the total and in Honduras they are almost four-fifths. In Costa Rica, Germany and the United Kingdom divide a trade about half as great as that of the United States. In Guatemala, Germany sells roughly a fourth as much. The United Kingdom sells about 10 per cent of Nicaraguan purchases, and 6 per cent of the imports into Honduras. American sales are six times as great in the first case and twelve times as great in the second. In Salvador, German sales are second to American but total only about 8 per cent. Imports into the republics of northern South America also show the growing preponderance of American shipments. Colombian purchases from the United States which were slightly less than a quarter in 1913 are now about half of its total imports. The United Kingdom has fallen in importance. It supplied a fifth of Colombian demands in 1913 but a steadily decreasing proportion in later years. Germany and France have seen the position of their exports to the republic fall off in even more marked degree in the past few years. Venezuelan imports before the World War were less than two-fifths from the United States. Over one-half now has that origin. The United Kingdom and Germany, which together had an outlet in Venezuela almost equal to that of the United States in 1913, have seen their shipments decline in relative importance, so that in some recent years they have had a value less than half as great. The trade of the European colonial areas in the Caribbean, taken as a whole, has advanced fairly steadily in value since the beginning of the century, though when changes in the value of money are taken into consideration the position of some of the weaker units has not improved. In none of the units, except certain of the British West Indies, has a marked development occurred on the basis of local resources. The trade of the British West Indies, taking the figures of value for that varied collection of communities as a whole, shows a satisfactory advance. In 1900, imports and exports together totaled $58,690,000. In 1928, they totaled $168,000,000. Though the advance was marked it was not equal to that of a number of other groups. Central American trade, for example, was only about two-thirds that of the British West Indies in 1900, but in 1928 it reached a third more than that of the islands. American trade plays in most of the British island units a less important part than in neighboring regions. In 1927, about $30 per cent of the imports came from the United States and slightly more of the exports had that destination. In Jamaica, however, export trade of the United States accounted in 1927 for almost half of the total of that island. In spite of the increase in the export and import values indicated, the economic position of the islands is not satisfactory, and the possibility of its improvement has been given repeated examination by the local authorities and by the governments of Canada and the United Kingdom. A number of commissions have studied possible adjustments of trade policy which might stimulate local economic activity, and the Canadian-West Indies agreements have sought by tariff arrangements and the establishment of steamship services to increase the export and import trade between these sections of the British Empire. The latest of these agreements, that of 1927 establishing a direct fortnightly service with Canada, and the preferential tariff arrangements with Great Britain appear to have increased commercial interchanges, but are too new and too temporary in their foundations to allow judgment as to the degree to which they will improve conditions which have long been a subject of complaint. Though the dependence of this area upon trade with the United States is less marked than in some others, the maintenance of good commercial relations with the northern republic is here also one of the essentials for economic advance. So important, in fact, are these relations that they place limitations about the special concessions which otherwise might be granted to other countries to develop intercourse with them. As one of the representatives to the First West Indies Conference, held in Barbados in 1929, declared, "We are so close to the American continent and we do so much trade with that continent . . . that we have to be particularly careful in passing any rule or regulation which will interfere with our business." The French and Netherlands holdings are small in area and of very restricted local resources. The former are of comparatively small importance for the United States. Their trade, increasingly in rum, has in recent years shown encouraging advance under the stimulus of a trade agreement with France. Though their commerce is primarily with the mother country, the imports from the United States show a tendency to increase. Their exports to the United States, because of small resources, do not have large proportions. In current years, the Netherlands West Indies lying off the coast of Venezuela occupy an exceptional position among the smaller Caribbean communities and an exceptional position in the trade with the United States. Long a practically valueless colony, they have become, through the development of Venezuelan oil resources, one of the most active areas in the Caribbean. Though their commerce is in all but small percentage transit trade, it has shown a remarkable development. As late as 1911-3, the exports were less than a million dollars in value and the imports less than two million. The great advance has occurred in the years following 1923. In 1927 the exports were worth over $54,000,000 and the imports over $57,000,000. The exports to the United States in 1927 totaled $29,933,000, and in 1929 rose to $64,588,975. American exports to the islands were $6,431,000, in the first year and $24,166,575 in the second. Since the opening of the century, all of the groups into which the trade units of the Caribbean fall have had great increases in the value of their commerce, and two of them have changed in relative commercial importance for the United States. In United States imports and exports, the islands, due to the commerce with Cuba, were in the leading position in 1900 and they continue to be so in spite of the difficulties of the Cuban sugar industry. They shipped 70 per cent of the imports into the United States in 1900 and in recent years have maintained about the same position. They bought 77 per cent of the exports in 1900 and only a little less in current years, though the share in 1929 was only 61 per cent. The other divisions, Central America and the north coast of South America, have had greater changes in relative importance. In 1900, Central America and Panama accounted for 11 per cent of the imports and 10 per cent of the exports. In 1929, imports were only 7 per cent of the total in spite of heavy fruit shipments, but the exports had risen to almost 19 per cent of the total due to the exceptionally advantageous position of the United States as a source of supply. Northern South America in 1900 supplied about 20 per cent of the imports from the Caribbean but had increased its share in 1929 to 27 per cent, a result reflecting the heavy purchases of Colombian coffee and Venezuelan oil. The values of the shipments meanwhile had increased tenfold.13 The north coast purchases from the United States also showed a good gain, rising from 12 per cent of those in the Caribbean region in 1900 to 20 per cent in 1929. Home