Senator and Congressman Urge Increased U.S. Agricultural Exports to Cuba

Arkansas’ U.S. Senator John Boozman and Congressman Rick Crawford make a forceful argument in the Wall Street Journal for increased U.S. agricultural exports to Cuba.[1] Here is what they stated.

“U.S. agriculture is struggling. Net farm income has fallen by half since 2013, and commodity prices across the board are below the cost of production. This is especially detrimental given the number of jobs agriculture provides our economy. Direct on-farm employment accounted for 2.6 million American jobs in 2015, and another 18.4 million jobs were supported by agriculture, according to the U.S. Department of Agriculture.”

“The U.S. should consider expanding the agricultural market in its backyard: Cuba. Less than 100 miles south of Florida, Cuba imports nearly 80% of its food annually, from countries like Vietnam and New Zealand, including about 400,000 tons of rice. But being closer to Cuba geographically, the U.S. has the comparative advantage here and could provide cheaper, better-quality goods in hours instead of weeks.”

“But the Trump administration may be taking a step in the opposite direction. For the past several months, the White House has been reviewing its trade policy with Cuba, and a major announcement is expected Friday. Early reports foretell a rollback of Obama-era policies that relaxed U.S. restrictions on the island nation. While the move may appease Cold War-era hawks and the minority of Cuban-Americans who still support the embargo, the American business community, agriculture in particular, needs access to Cuba’s market.”

“There is a better way forward that satisfies both parties without repealing the embargo or changing its structure: allow agricultural goods to be sold on credit through private financing. Currently the U.S. trades agricultural goods with Cuba, but there are restrictions that limit trade to cash-only transactions. Considering that nearly all international trade relies on credit, this policy puts American farmers on the sidelines while competitors like Brazil and China enjoy Cuba’s $2.4 billion market.”

“Two bills under consideration right now, the Cuba Agricultural Exports Act in the House and the Agricultural Export Expansion Act in the Senate, would remove the credit restriction and allow private financing of agricultural exports.[2] President Trump’s secretary of agriculture, Sonny Perdue, expressed his support for trade on credit with Cuba during his Senate confirmation hearing in March. Producers from Arkansas, Kansas, Louisiana, Minnesota, Texas and other states would be the first to benefit directly from this change.”

“If there ever was a time for this bill to move, it is now. Agriculture is a crucial part of rural states’ economies. The most important thing that can be done now for American agriculture is to open new markets for U.S. products.”

“Following Fidel Castro’s death in November, President-elect Trump said, ‘Our administration will do all it can to ensure the Cuban people can finally begin their journey toward prosperity and liberty.’ He also has promised time and again to bring back American jobs and ‘make America great again.’”

“Allowing agricultural trade on credit would be a good compromise: Those who support the Cuba embargo should be able to get on board. The Trump administration would accomplish a bilateral trade deal that supplies the Cuban people with high-quality food. And all of this can be done while supporting rural American jobs—an undeniable victory for the Trump White House.”

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[1] Boozman & Crawford, Open Cuba’s Market to U.S. Farmers, W.S.J. (June 13, 2017).

[2] Congressman Crawford is the author of H.R.525—Cuba Agricultural Exports Act. Senator Boozman is a cosponsor of Senator Heidi Heitkamp’s bill: S.275—Agricultural Export Expansion act of 2017; Press Release: Boozman, Heitkamp Reintroduce Bipartisan Bill to Expand Ag Exports to Cuba, Support American Farmers & Jobs (Feb. 2, 2017).

 

Cuba Faces Economic Challenges  

Cuba is facing economic challenges. First, certain economists are projecting difficult economic times for 2017.[1] Second, ordinary Cubans already are facing difficulties finding basic foodstuffs.[2]

Carmelo Mesa-Lago, an economist and professor emeritus at the University of Pittsburgh, said, “The short-term prospects are not good.” If in 2015 Cuban GDP (Gross Domestic Product) grew 4.4%, “projections [for 2016] are of stagnation or slight decline, and a far greater fall next year.”

He said the economic reforms initiated by Raúl Castro are positive, but that they are “extremely slow. We are now in 2016, nine years since reforms began in 2007, and there have been tangible effects on the economy,” but there is a “need to find quick and accurate solutions . . . [to] accelerate the pace of the key changes.” For example, Mesa-Largo said, the development of the non-state sector “authorized only . . . generally unskilled jobs, [with] extremely low productivity.”

The other economist, Omar Everleny Pérez Villanueva, stated the Cuban economy will only grow an estimated 0.4% in 2016 and decline -2.0% in 2017. “Cuba must make major changes in its economy to rapidly overcome its structural problems in 2017.” He believes it is necessary for Cuba to develop small and medium enterprises, increase wages, allow foreign investment and accept portfolio investments (with the issuance of fixed income securities (bonds) and equity (shares)).”

On a personal level, ordinary Cubans have great difficulty in finding food to eat, due in part to increased competition for food supplies to feed the increasing number of foreign tourists who can pay more for food.

A U.S. journalist reports that the tourists’ “surging demand for food has caused] ripple effects. . . .Tourists are quite literally eating Cuba’s lunch. . . . [G]oods that Cubans have long relied on are going to well-heeled tourists and the hundreds of private restaurants that cater to them, leading to soaring prices and empty shelves. . . . Without supplies to match the increased appetite, some foods have become so expensive that even basic staples are becoming unaffordable for regular Cubans. . . . Rising prices for staples like onions and peppers, or for modest luxuries like pineapples and limes, have left many unable to afford them. Beer and soda can be hard to find, often snapped up in bulk by restaurants.”

To meet this immediate need for more food in Cuba, this blog has proposed that Cuba impose a requirement that all arriving airlines and cruise ships deliver to the Cuban government set quantities of certain foodstuffs.

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[1] The economic challenges of the island by 2017 according to two experts, Diario de Cuba (Dec. 13, 2016)

[2] Ahmed, Cuba’s Sure in Tourism Keeps Food Off Residents’ Plates, N.Y. Times (Dec. 8, 2016); Severson, For Cuban Home Cooks, Ingenuity and Luck Are Key Ingredients, N.Y. Times (May 17, 2016).

 

United States-Cuba Bilateral Commission Meets To Review Normalization Status                                                                                                

On May 16, in Havana the U.S.-Cuba Bilateral Commission held its third meeting to review the status of the countries’ efforts to normalize relations. The U.S. delegation was headed by Ambassador Kristie Kenney, currently serving as Counselor of the Department of State, who was assisted by John S. Creamer, Deputy Assistant Secretary of State, Bureau of Western Hemisphere Affairs, U.S. Department of State; and by U.S. Ambassador Jeffrey DeLaurentis, Chargé d’Affaires, U.S. Embassy, Havana, Cuba. The Cuban delegation’s head was Josefina Vidal Ferreiro, the Director General of the Cuban Ministry of Foreign Affairs’ Department of the United States.[1]

Before the meeting the U.S. State Department said it “will provide an opportunity to review progress on a number of shared priorities since the last Bilateral Commission meeting in November 2015, including progress made during the President’s historic trip to Cuba in March. The United States and Cuba expect to plan continued engagements on environmental protection, agriculture, law enforcement, health, migration, civil aviation, direct mail, maritime and port security, educational and cultural exchanges, telecommunications, trafficking in persons, regulatory issues, human rights, and claims for the remainder of 2016.”

Director General Vidal’s Press Conference

images

At a press conference after the meeting, Director General Vidal said the meeting had been “productive” and conducted in a “professional climate of mutual respect.” (A photograph of Vidal at the press conference is on the left.) The parties agreed to hold the fourth meeting of the Bilateral Commission in September 2016 in Washington, D.C.

Vidal also said she had told the U.S. delegation that Cuba reiterates its “appreciation for the positive results from President Obama’s visit to Cuba” that had been mentioned by President Raúl Castro during Obama’s visit. Indeed, she said, Cuba believes this visit is “a further step in the process towards improving relations” between the two countries and “can serve as an impetus to further advance this process.”[2]

Vidal acknowledged that there has been an increase in official visits as well as technical meetings on topics of common interest resulting in nine bilateral agreements to expand beneficial cooperation.[3]

According to Vidal, both delegations agreed on steps that will improve relations, including conducting high-level visits and technical exchanges on environmental, hydrography, and implementation and enforcement of the law, including fighting trafficking in drugs and people, and immigration fraud. The two countries also are getting ready to conclude new agreements to cooperate in areas such as health, agriculture, meteorology, seismology, terrestrial protected areas, response to oil-spill pollution, fighting drug trafficking and search and rescue, among others. They also are ready to start a dialogue on intellectual property and continue those relating to climate change and regulations in force in the two countries in the economic and trade area.

However, Vidal said, progress has not been as fast in the economic area because “the blockade [embargo] remains in force” despite the positive measures taken by President Obama to loosen U.S. restrictions. There still are significant U.S. restrictions on U.S. exports to Cuba and imports from Cuba. In addition, U.S. investments in Cuba are not allowed except in telecommunications, and there are no normal banking relations between the two countries. Therefore, Cuba stressed again the priority of the “lifting the economic, commercial and financial blockade [embargo].”

More specifically Vidal said Cuba had told the U.S. representative that in the last six months two American companies and one French company had been fined by the U.S. for maintaining links with Cuba while Cuba has had problems with 13 international banks’ closing accounts, denying money transfers or suspending all operations with Cuba. In addition, six service providers have ceased providing services to Cuban embassies and consulates in third countries (Turkey, Austria, Namibia and Canada).

In addition, the Cuban delegation, said Vidal, had reaffirmed the need for the U.S. to return to Cuba the territory [allegedly] illegally occupied by the U.S. naval base in Guantanamo. It “is the only case of a military base in the world that is based in a territory leased in perpetuity, which is an anomaly from the point of view of international law.[4] There is no similar example in the world and is the only instance of a military base in a foreign country against the will of the government and people of that country.

Vidal also mentioned the following U.S. policies and actions that needed to be changed:

  • the U.S. preferential migration policies for Cuban citizens, expressed in the existence of the policy of dry feet/wet feet;
  • the U.S. Cuban Adjustment Act regarding those immigration policies;
  • the U.S. program of parole for Cuban health professionals;
  • the special U.S. radio and television broadcasts designed especially for Cuba (Radio and TV Marti); and
  • U.S. programs designed to bring about changes in the economic, political and social system of Cuba.[5]

These U.S. policies, according to Vidal, underscored “a huge contradiction” for the U.S. On the one hand, President Obama said in his speech in Cuba that the U.S. has neither the intention nor the ability to bring about change in Cuba and that in any case it was up to the people of Cuba to make their own decisions. On the other hand, the U.S. has programs with huge budgets ($20 million dollars every year) aimed at bringing about such change. If indeed there is neither the intention nor the ability to bring about change in Cuba, then there is no reason to have such programs.

Normalization, said Vidal, also needs to have protection of rights to trademarks and patents because there are Cuban companies owning well-known marks, which for reasons of the blockade and other reasons have been taken away from the Cubans.

Before the meeting, another Cuban Foreign Ministry official said that the parties previously had discussed, but not negotiated, with respect to Cuba’s claim for damages with respect to the U.S. embargo and the U.S. claims for compensation for property expropriated by the Cuban government. At the meeting itself, according to a Cuban statement, the Cubans had delivered a list of its most recent alleged damages from the blockade (embargo).

U.S. Embassy Statement

The U.S. Embassy in Havana after this Bilateral Commission meeting issued a shorter, but similar, statement about the “respectful and productive” discussions. “Both governments recognized significant steps made toward greater cooperation in environmental protection, civil aviation, direct mail, maritime and port security, health, agriculture, educational and cultural exchanges, and regulatory issues. The parties also discussed dialogues on human rights and claims, and the [U.S.] looks forward to holding these meetings in the near future.”

Conclusion

Since the actual meeting was conducted in secret, it is difficult to assess what was actually accomplished except through officials’ subsequent public comments.

On May 17, the two countries conducted their second Law Enforcement Dialogue, which will be discussed in a subsequent post.

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[1] U.S. Department of State, United States and Cuba to Hold Third Bilateral Commission Meeting in Havana, Cuba (May 12, 2016); Gomez, MINREX: relations between Cuba and the United States would advance more nonblocking, Granma (May 12, 2016); Reuters, Cuba and U.S. Officials to Meet Next Week to Deepen Detente, N.Y. Times (May 12, 2016); Francisco & Elizalde, Cuba-US Bilateral commission: a productive meeting, Josefina Vidal  (+ Photos and Video), CubaDebate (May 16, 2016); Assoc. Press, Top Cuba Diplomat: Obama Trip Positive, Created Momentum, N.Y. Times (May 16, 2016); Reuters, Cuba and United States Draw Up Roadmap for Talks to Deepen Détente, N.Y. Times (May 16, 2016); Gomez, Cuba and the United States defines ambitious agenda for the coming months, Granma (May 16, 2016); U.S. Embassy, Havana, Cuba, Third Bilateral Commission Meeting in Havana (May 16, 2016); Press release issued by the Cuban delegation to the Third Meeting of the Cuba-U.S. Bilateral Commission, Granma (May 17, 2016); Cuba and U.S. set ambitious agenda for coming months, CubaDebate (May 17, 2016).

[2] Vidal’s positive comment about Obama’s visit is in sharp contrast to the negative comments about the visit from Vidal’s superior, Foreign Minister Bruno Rodriguez at the recent Congress of the Communist Party of Cuba. (See Conclusion of Seventh Congress of Communist Party of Cuba, dwkcommentaries.com (April 20, 2016).)

[3] Beforehand an official of Cuba’s Foreign Ministry said that since the December 2014 announcement of détente the parties had signed nine agreements covering the environment, email, navigation safety, agriculture and travel. In addition, the Telecommunications Company of Cuba (ETECSA) had signed agreements with three U.S. companies for cellular roaming in Cuba; a U.S. company (Starwood) had an agreement to manage several Cuban hotels; and the Carnival cruise lines had made a maiden voyage to the island.

[4] The U.S., however, contends that the lease is not in perpetuity, but for so long as the U.S. uses it as a “naval station.” This is one of the potential issues to be resolved in an international arbitration as suggested in a previous post. (Does Cuba Have a Right To Terminate the U.S. Lease of Guantanamo Bay? dwkcommentaries.com (April 26, 2015).)

[5] Prior posts have concurred in the Cuban requests for ending all of these U.S. programs and policies. See Topical List of Posts—Cuba.

U.S. Governors Call for Ending the U.S. Embargo Against Cuba

On October 9, nine U.S. governors sent a letter to congressional leaders calling for decisive steps to open up trade with Cuba and put an end to the embargo.[1]

They expressed their “support for an end to current trade sanctions levied against Cuba. It is time for Congress to take action and remove the financial, travel, and other restrictions that impede normal commerce and trade between our nation and Cuba.”

Federal legislation in 2000,“ they stated, “allowed for the first commercial sales of food and agricultural products from the U.S. in nearly half a century.” Since then “Cuba has become an important market for many American agricultural commodities. Thus far, our country’s agriculture sector has led the way in reestablishing meaningful commercial ties with Cuba, but a sustainable trade relationship cannot be limited to one sector or involve only one-way transactions.”

Nevertheless, the Governors added,  “financing restrictions imposed by the embargo limit the ability of U.S. companies to competitively serve the Cuban market. Our thriving food and agriculture sectors coupled with Cuba’s need for an affordable and reliable food supply provide opportunities for both our nations that could be seized with an end to the remaining trade restrictions. Foreign competitors such as Canada, Brazil, and the European Union are increasingly taking market share from U.S. industry, as these countries do not face the same restrictions on financing.”

“Ending the embargo will create jobs here at home, especially in rural America, and will create new opportunities for U.S. agriculture. Expanding trade with Cuba will further strengthen our nation’s agriculture sector by opening a market of 11 million people just 90 miles from our shores, and continue to maintain the tremendous momentum of U.S. agricultural exports, which reached a record $152 billion in 2014.”

In addition, “bilateral trade and travel among citizens of both nations will engender a more harmonious relationship between the U.S. and Cuba, while providing new opportunities for U.S. interests to benefit economically from improved relationships. The benefits of fully opening Cuba to free market trading with the U.S. go beyond dollars and cents. This positive change in relations between our nations will usher in a new era of cooperation that transcends business. Expanded diplomatic relations, corporate partnerships, trade and dialogue will put us in a better position to boost democratic ideals in Cuba. This goal has not been achieved with an outdated strategy of isolation and sanctions.”

“While normalized trade would represent a positive step for the U.S. and Cuban economies, we appreciate and support the Administration’s executive actions taken thus far to expand opportunity in Cuba and facilitate dialogue among both nations. We now ask that you and your colleagues in the U.S. House of Representatives and Senate take decisive steps to support U.S. commerce and trade relations and fully end the embargo on Cuba.”

The letter is signed by Governors Robert Bentley (Rep., AL), Jerry Brown (Dem. CA), Butch Otter (Rep., ID), Mark Dayton (Dem.MN), Steve Bullock (Dem., MT), Thomas Wolf (Dem., PA), Peter Shumlin (Dem., VT),Terry McAuliffe (Dem., VA) and Jay Inslee (Dem., WA).

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[1] Letter, Governor Robert Bentley (and eight other Governors) to Senate Majority Leader McConnell, et al. (Oct. 9, 2015); Bullock, Governor Bullock Encourage End to Trade Sanctions with Cuba (Oct. 14, 2015); Shumlin, Governor Shumlin Urges End to U.S. Trade Sanctions with Cuba (Oct. 13, 2015); Governor supports trade with Cuba, Great Falls Tribune (Oct. 14, 2015); Thurston, Could Farmers Cash in with More Open Trade with Cuba? Necn (Oct. 14, 2015); Prentice, Otter, Eight Other Governors, Urging Congress to Lift Cuba Trade Embargo, Boise Weekly (Oct. 14, 2015); Nine U.S. governors call for an end to the blockade, Granma (Oct. 14, 2015).

 

 

Senate Hearing on Expanding U.S. Agricultural Trade with Cuba

On April 21st the U.S. Senate Committee on Agriculture, Nutrition and Forestry held a hearing, “Opportunities and Challenges for Agriculture Trade with Cuba.”[1]

 Chairman’s Opening Statement

Senator Pat Roberts
Senator Pat Roberts

The Committee Chair, U.S. Senator Pat Roberts (Rep., KS), opened the hearing by stating, “At the beginning of this Congress, I was hopeful that trade would be one area where we could work across the aisle to find agreement. I am still hopeful that is the case. . . . International trade of American agriculture products is critical…critical to the nation’s economy and critical to our Kansas farmers and ranchers. I have long fought to eliminate barriers to trade, and I believe that we should continue to work towards new market access opportunities for our agriculture products.”

“The United States and Cuba have a long history full of contention and instability. There is no shortage of opinion from members of Congress about the relationship between our two countries, both present and future. Some are concerned about human rights, others about socioeconomic ideology. But those concerns are not what this committee will focus on this morning. Today we are here to discuss the role of agriculture – opportunities and challenges – in Cuba.”

“This is not an issue that we are going to be able to fix overnight. It will take efforts in addition to bills in Congress to truly normalize trade with Cuba. The decisions that are made regarding increased trade with Cuba must be made carefully.”

“Four months ago the President announced a major shift in U.S. policy towards Cuba. It is my hope that in the future, the President will work with Congress to determine the best path forward. Foreign policy does not happen in a vacuum. We have to take a realistic approach and work out a step-by-step plan towards lifting the embargo. This is a goal that should include Congress.”

“Today we will hear from an impressive panel of experts, from the regulators responsible for writing our policies toward Cuba, to the producers who seek to grow the market for their products. I understand that, like myself, many of our witnesses here have traveled to Cuba to see first-hand what challenges and opportunities exist.”

“Agriculture has long been used as a tool – not a weapon – for peace and stability. It is my hope that Cuba will embrace the practices of free trade, enterprise and commerce, so that both countries will gain from increased relations.”

“Earlier this year, the U.S. Agriculture Coalition for Cuba was launched. They have shared a statement and additional information in support of our work today, [which was] entered into the record.”

Ranking Member’s Opening Statement

Senator Debbie Stabenow
Senator Debbie Stabenow

Senator Debbie Stabenow (Dem., MI), the Ranking Committee Member, said, “Improving trade with Cuba represents not only a great opportunity for America’s farmers, ranchers, and manufacturers, but a meaningful way to help rebuild trust between our nations.  After more than 50 years of stalemate, it’s time for a new policy on Cuba.”

“When I visited Cuba earlier this year – just days after President eased some trade restrictions – I saw firsthand the eagerness of Cubans who want to develop a more effective relationship with the [U.S.] But we can only get there if we begin to take meaningful steps to soften many of the barriers that exist between us.”

“And America’s farmers and ranchers are uniquely positioned to lead the way. Consider this – in 2014, the U.S. exported just over $290 million in agricultural goods to Cuba. That’s a good start, but for a country only 90 miles off our coast, we can do much more. Cuba’s own import agency estimates that it will receive approximately $2.2 billion (in U.S. dollars) worth of food and agricultural products this year alone.”

“That type of economic potential deserves a chance to succeed – and is one reason why many of the largest producer groups, trade associations, and companies from within agriculture have come together to push for increased engagement.”

“Many on this Committee have pushed for increased engagement and have taken the opportunity to visit Cuba in recent months. I’d like to recognize Senators Leahy and Klobuchar, as well as Senator Boozman and Heitkamp, for their bipartisan leadership on this issue.”

“The commitment to democratic ideas and human rights we share as Americans are best realized through engagement. Our bedrock principles accompany every product farmers and ranchers send to Cuba.”

“Last week’s action by the President [in rescinding the designation of Cuba as a “state sponsor of terrorism”] is a step forward toward in normalizing our relationship and will test the commitment of the Cuban government to this process.”

“But even while we are making significant progress in rebuilding our relationship with Cuba – the policies governing trade between our countries are not yet designed to allow a steady flow of goods and services. We must find a path forward that allows U.S. financial institutions to safely and securely work with Cuban purchasers, including the extension of lines of credit. And we should work to authorize a greater range of goods, services, and supplies for export to Cuba. These measures not only make good business sense – they also will help build Cuba’s agricultural capacity and make the island a better trading partner in the long run.”

The Witnesses at the Hearing

 The witnesses at the hearing were the following: (1) The Honorable Michael T. Scuse, Under Secretary, Farm and Foreign Agriculture Services, U.S. Department of Agriculture; (2) Mr. Matthew Borman, Deputy Assistant Secretary, Bureau of Industry and Security, U.S. Department of Commerce; (3) Mr. John Smith, Acting Director, Office of Foreign Assets Control, U.S. Department of the Treasury; (4) Mr. Michael V. Beall, President & CEO, National Cooperative Business Association; (5) Mr. Terry Harris, Senior Vice President, Marketing and Risk Management, Riceland Foods; (6) Mr. Ralph Kaehler, Farmer and Owner, K-LER Cattle Company, St. Charles , MN; (7) Mr. Doug Keesling, Fifth Generation Owner, Keesling Farms, Kansas Wheat, Chase , KS; and (8) Dr. C. Parr Rosson III, Professor & Department Head, Department of Agriculture Economics, Texas A&M University.

 Witness Ralph Kaehler

Senator Amy Klobuchar
Senator Amy Klobuchar

Minnesota’s Senator Amy Klobuchar, who is a member of the Committee and the author of the Freedom to Export to Cuba Act (S.491) ending the U.S. embargo of Cuba, introduced Ralph Kaehler, whose family has been operating a livestock, row crop, and canning vegetable farm in Minnesota for nearly 130 years.

The Senator prefaced her introduction with this statement: “For too long, export and travel restrictions have prevented American farmers and ranchers from seeking opportunities in Cuba. That is why I have introduced bipartisan legislation to lift the trade embargo on Cuba, and this hearing allowed us to focus on how we can ensure that our farmers and ranchers benefit from normalized relations between our two countries.”

Mr. Kaehler testified that his farm was “an exhibitor in the First U.S./Cuba Food and Agriculture Exposition [in Havana] in 2002.” It “was the only one with live animals— affectionately known as the ‘Cuban Ark’ . . . to exhibit the diversity of U.S. livestock producers, and to introduce Cuba to the typical USA farm family.”

“Since then, the Kaehler Family has led over 10 trade delegations to Cuba. These missions have included producers from seven different states and a bipartisan mix of state lawmakers and officials. To date, some of the most successful exports to Cuba we have facilitated include shipments of livestock, dried distillers grains, powdered milk, animal milk replacer, and texturized calf feed.”

“Given the opportunity, U.S. farmers do well in Cuba. We have a significant advantage of shorter shipping over Europe, South America, Asia, and other major exporters. In addition, Cuba can take advantage of U.S. rail container service and sizing options, which also brings significant benefits to smaller privately owned businesses like ours. On top of all this, the U.S. produces a wide variety of affordable and safe food products that Cubans want to eat.”

“Unfortunately, some of the policies currently in place diminish the natural advantages American agriculture enjoys over its competitors. For instance, requirements for using third country banks for financing adds a lot of paperwork, time, and personalities to every transaction. Coupled with a restrictive cash‐in advance shipping policy . . . there is a very small margin for error before a shipper faces demurrage fees. As a family operation trying to build our business through exports, this self‐inflicted inefficiency can be tough to manage.”

Mr. Kaehler then made three specific recommendations to Congress. “First, . . . improve the trade financing rules for Cuba. . . . Second, . . . small firms like ours . . . need marketing support and assistance [from USDA] to help support our companies and figure out exactly what’s going on in markets abroad. . . . [Third,] I hope that Congress will expand the universe of people involved in U.S.‐Cuba trade by allowing a greater variety of goods and services to be traded.”

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[1] A quick examination of the official websites of the Committee’s 20 members reveals that seven have made statements favoring at least some aspects of U.S.-Cuba reconciliation (Boozman (Rep., AK), Brown (Dem., OH), Heitkamp (Dem., ND), Hoeven (Rep., ND), Klobuchar (Dem., MN), Leahy (Dem., VT) and Stabenow (Dem., MI)). Only two have negative statements about that reconciliation (Grassley (Rep., IA) and Perdue (Rep., GA)). The other eleven members‘ websites do not reveal any position on Cuba (Bennet (Dem., CO), Casey (Dem., PA), Cochran (Rep., MS), Donnelly (Dem., IN), Ernst (Rep., IA), Gillibrand (Dem., NY), McConnell (Rep., KY), Roberts (Rep., KS), Sasse (Rep., NE), Thune (Rep., SD) and Tillis (Rep., NC)). A more thorough examination of the records of the last 11 would probably uncover other indications of their positions on reconciliation with Cuba.

 

Launching the United States Agricultural Coalition for Cuba 

On January 8th the United States Agricultural Coalition for Cuba, whose purpose is “to re-establish Cuba as a market for U.S. food and agriculture exports,” was publicly launched at the National Press Club in Washington, D.C.

The Agricultural Coalition’s Basics

usacc

To achieve this purpose, the Coalition’s mission is “to strive to turn Cuba from an enemy to an ally . . . by building trade relations with an honest appraisal of the past and a fresh look to the future.” This mission is based upon the beliefs that “the improvement of agricultural trade between the U.S. and Cuba is the foundation for building successful and enduring relations between the two countries” and that “an increased exchange of ideas, knowledge, capital and credit will benefit both countries.”

In implementing its mission, the Coalition will be “advancing a constructive dialogue in the [U.S.] on U.S.-Cuba relations . . . to end the long-standing embargo, . . . to build momentum that drives historical change . . . [and] to explain [to the public] the moral imperative of liberalizing trade between the two countries.”

Its website lists the following benefits for the U.S. of ending the U.S. embargo: enhancement of regional security and the global economy; improvement of U.S. travel, research and cultural and business relations; helping Cubans gain rights; assisting both countries in natural disaster preparedness, crop disease management and food security; improving both countries’ economies; and contributing to U.S. strength and Cuban sovereignty. There also is a similar list of benefits for Cuban citizens for ending the U.S. embargo. In addition, the website has comments about post-embargo and food security issues.

The 30-member Coalition is lead by Cargill Incorporated, a Minnesota company responsible for 25% of all U.S. grain exports, along with representatives of rice, wheat, barley, soybean, corn, oilseed, dry beans and canola growers and producers of dairy, beef, pork and poultry products; and other agricultural groups. (The complete list of the members is on the Coalition’s website.)

Devry Boughner Vorwerk, the Chair of the Coalition and Cargill’s Vice President of Corporate Affairs, said, “We will work with key stakeholders to build momentum that drives historical change.” The Vice Chair of the Coalition, Paul Johnson, is the Executive Director of the Illinois Cuba Working Group, which was created by a unanimous resolution of the state legislature, and an owner of a company that exports food products to the island; he also lived in Havana while working on a thesis on Cuba’s economic development.

The National Press Club Event

The launch of the Coalition featured remarks by U.S. Secretary of Agriculture Tom Vilsack; Democratic Missouri Governor Jay Nixon; U.S. Representatives Sam Farr (Dem., CA), Kevin Cramer (Rep., ND), and Rodney Davis (Rep., IL); and U.S. Senators Jerry Moran (Rep., KS) and Amy Klobuchar (Dem., MN). (A video of the launch program along with text of the remarks is available on C-Span-3.)

Vilsack

Secretary Vilsack noted that American agriculture had a good year in 2014, but that an opening with Cuba would allow the sector to do even better. He said the embargo “isolated us from the rest of the hemisphere, and isolated ordinary Cubans from the outside world.” The new presidential opening to Cuba “will make our products much more price competitive and they’ll expand choices for Cubans shopping in Cuban grocery stores. Cuba imports about 80 percent of its food, which means that there is significant economic potential for our producers. It’s a 1.7 billion dollar market.” Secretary Vilsack also pointed out that the “president had done what he can, but we still have legislative hurdles to cross. Congress has to act to remove all the U.S. trade barriers that make it hard for [U.S. agriculture] . . . to sell in Cuba.”[1]

Governor Jay Nixon
Governor Jay Nixon

Governor Nixon called the opening up of Cuba “a tremendous opportunity to strengthen our farms and our economy. The more Missouri goods we sell overseas, the more good jobs we create back at home—it’s really pretty simple. But right now, when it comes to Cuba, we are not on a level playing field, because of the sanctions.” He, therefore, called on members of Congress “to support our farmers, support the free market, and support this outstanding opportunity to strengthen our economy . . . . Now is the time for Congress to follow through and remove these financial restrictions. Lift the embargo and do away with the self-imposed barriers that are holding us back. In a competitive world we cannot ignore 11-million customers 90 miles from our country.”[2]

Representative Sam Farr
Representative            Sam Farr

Representative Farr said the President’s opening to Cuba “will be one of the great modern events of America. We will have torn down our iron wall.” But “it’s going to be very difficult” politically to do this in the U.S. Nor will it be easy politically for Cuba. But “Cuba is a well-educated country. Its people have a can-do attitude. They really like Americans.” Representative Farr also noted, “Every other country in this hemisphere has diplomatic and trade relations with Cuba.” They have chastised the U.S. for having this “archaic policy.” When President Obama goes to the Summit of the Americas in Panama this April “he’s going to be welcomed as a hero. Now we will be able to unify the hemisphere.”

On the other hand, Farr said, “The battle will be in Congress because of a really small minority of Cuban-Americans.” Therefore, congressional supporters of the Cuban opening are “going to start a new Cuba Working Group.” The American people and agricultural and business people need to “use their political voices to show” Congress that we need to go forward with Cuba trade and relations.

Representative Kevin Cramer
Representative Kevin Cramer

Representative Cramer remarked that the U.S. has “the opportunity to spread liberty, to spread democracy and to sell products. We can test it incrementally. We can open up little by little and provide assurance to those colleagues of ours in the House and Senate that might not be inclined to go all in. I have learned in my time in Congress that persuasion does not happen quickly. Almost nothing happens quickly.”

Representative Rodney Davis
Representative Rodney Davis

 

 

Representative Davis said he wants “to see communism lifted in Cuba so that the Cuban people can experience the same freedoms we experience here in the [U.S.].” Indeed, “increasing the trade we already have with the Cuban nation is going to allow America to invest in a Cuban economy that‘s going to free the Cuban citizens from the conditions that they live under now.” He also noted that for a long time he has supported “more normalized trade relations with the Cuban people.”

Senator Jerry Moran
Senator             Jerry Moran

Senator Moran stated that the U.S. is a “natural supplier to Cuba. The cost of transportation from Europe to Cuba is about $25 a ton” while the “cost from the [U.S.] is $6 or $7. We have to take advantage of that.” More importantly, “it’s something more noble than the trading relationship or the selling opportunity. It’s about changing the opportunity that Cubans have in relationship with the government. A growing economy and standard of living creates the opportunities for the Cuban people to make demands [on their government]. There is a noble calling of trying to make the world a better place for all citizens of the world. Common sense says we ought to do this and morality says we ought to. Let’s make the difference and the change. This is a Congress that has the ability to do that.”

Senator Amy Klobuchar
Senator                   Amy Klobuchar

Senator Klobuchar said America has “a historic opportunity right now to modernize our country’s relationship with Cuba – and it’s a moment we must seize. By increasing travel and commerce between our two countries, we can boost American exports to Cuba and create American jobs to produce the goods for 11 million new customers, while also helping to improve the quality of life for Cubans. I’m looking forward to working with our agriculture community and members of both parties to help build a practical and positive relationship between the people of Cuba and the United States.” She “hopes we can have a robust and substantive debate. Congress must avoid obstructive actions like blocking the confirmation of an ambassador to Cuba or the funding of activities regarding Cuba.”

Conclusion

As a supporter of the reconciliation of our two countries, I rejoice in the launching of this new coalition to end the embargo and to add their support for this reconciliation.

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[1] On the day of President Obama’s announcement of the breakthrough with Cuba (December 17th), Secretary Vilsack issued this statement: “Throughout history, agriculture has served as a bridge to foster cooperation, understanding and the exchange of ideas among people. I have no doubt that agriculture will continue to play that powerful role as we expand our relationship with the Cuban people in the coming years” He added, “Today’s announcement expands opportunity for U.S. farmers and ranchers to do business in Cuba. It removes technical barriers between U.S. and Cuban companies and creates a more efficient, less burdensome opportunity for Cuba to buy U.S. agricultural products. It also makes those products far more price competitive, which will expand choices for Cuban shoppers at the grocery store and create a new customer base for America’s farmers and ranchers.”

[2] Missouri’s Democratic Senator, Claire McCaskill, on the same day as the Press Club event, announced that she will be going to Cuba at the end of February to assess whether Cuba would be a suitable market for Missouri agriculture. Another Senator, John Boozman (Rep., AR), announced his support of the Coalition and expanding trade with Cuba.