Trading with enemy (#94; Topic B)

Today's Washington Post reports an intriguing incident in Mexico City. While attending an international conference, about a dozen attendees from Cuba checked into a Sheraton hotel. But, almost immediately, the Cuban delegation was asked to check out, by order of the US Treasury department to the hotel management -- US entities are barred from trading with Cuba. It makes no difference that this hotel is but a foreign subsidiary located off-shore; that the parent company is a US entity governs. This thoroughness is impressive, and reminds me of a similar incident in 1967, when I was a Ford Foundation Visiting Professor setting up a school of business at the Chinese University of Hong Kong. At that time, to USA, China was an enemy, much as Cuba is now. Being so, goods shipped to US must be devoid of any made-in-China contents or equipment. Thus, for garments (the leading export to US at the time), grey cloth and thread must not come from China, nor could sewing machines used to stitch the cloth into garments. The former is visible and, thus, obvious; the latter, though stretching a bit, is still understandable. All exporters learned these rules well, and watched every detail like hawks, making sure that only not-made-in-China materials and sewing machines were used. Still, in one instance, the entire output of one exporter was rejected. Why? Because the needles on sewing machines used by that garment manufacturer came from China. Sewing needles? Yes. That little toothpick-like sewing needle hardly worth two cents? So what? Isn't sewing needle an integral part of the sewing machine -- in fact, it is a critical part of any sewing machine. This being so, made-in-China needles must not be used. When they were used, rejection was definitely called for. Case closed. This thoroughness impressed me then; it still impresses me now.
Posted at 6:51 pm, Wednesday, February 22, 2006