Small Chance of Liberalized U.S. Rules for Agricultural Exports to Cuba  

The U.S.-China trade war initiated by the Trump Administration has had a significant negative impact on U.S. agricultural exports to that country. In response, some U.S. senators and representatives have been pressing for relaxation of U.S. restrictions on such exports to Cuba. These advocates include Senators Heidi Heitkamp (Dem., ND), Amy Klobuchar (Dem., MN) and Tine Smith (Dem., MN)  and Representatives Collin Peterson (Dem., MN) and Tom Emmer, (Rep., MN). [1]

In addition, a bipartisan group of over 60 agricultural associations, businesses and elected officials from 17 states have urged the two congressional agriculture committees to include in the pending farm bills a provision to remove restrictions on private financing of U.S. agricultural exports to the island. [2]

This week Cuba President Miguel Diaz-Canel in New York City for a meeting of the U.N. General Assembly met separately with a bipartisan and bicameral group of Members of the U.S. Congress, including Sen. Ron Wyden (Dem., OR), Rep. Karen Bass (Dem., CA), Rep. Kathy Castor (Dem., FL), Rep. Robin Kelly (Dem., IL) Rep. Gregory Meeks (Dem., NY) and Rep. Roger Marshall (Rep., KA). Rep. Marshall told AG NET that the U.S. “can and should be Cuba’s number one supplier of commodities like sorghum, soy, wheat, and corn.”

But legislation to expand such exports by allowing credit sales to Cuba did not make it into the pending farm bills in both houses of the Congress, and most observers and participants think chances are nil of such a provision being added. And Senator Heitkamp’s provision in the Senate bill to allow the U.S. Department of Agriculture to use federal funds to develop the Cuban market could easily be cut from the bill in a conference committee.

The reason has more to do with politics than economics, according to Ted Piccone, a specialist in Latin American issues at the Brookings Institution. “It basically comes down to domestic politics in Florida,” Piccone said.

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[1] Spencer, Little appetite for effort to bolster ag trade with Cuba, StarTribune (Sept. 21, 2018).

[2] Engage Cuba, Agriculture Groups Support Farm Bill Cuba Provision that Would Save $690 Million (Sept. 5, 2018).

Cuba’s National Assembly Approves Draft Constitution

On July 22, Cuba’s National Assembly of Popular Power approved the draft of the new Cuba Constitution. It will now go to a period of “popular consultation, August 13-November 15, and afterwards to a national referendum. [1]

In a concluding address to this session, President Miguel Diaz-Canel said, “The behavior of the economy in the first . . .[half of the year] closes with 1.1 percent growth. A tense situation remains in finance, due to several factors. This situation forces us to ensure control measures in the 2018 Plan. To achieve this we must appeal to the maximum use and efficient use of available resources. In these circumstances, the effort must be multiplied.”

Previously the Cuban government had said the country “needs up to 7 percent annual growth to fully recover and develop from the collapse of former benefactor the Soviet Union, and more recently, Venezuela. The drop in revenues has led Cuba to postpone payments to many suppliers and joint venture partners over the last two years, the government has admitted. Diaz-Canel on Sunday called on the country to work harder to improve the economy and “gradually re-establish the financial credibility of the nation.”

Therefore, we “must draw up an objective and sustainable Plan for the Economy for 2019, but one that does not renounce economic growth.”

As noted in a prior post, the draft Constitution recognizes the right to private property.

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[1]  No surprises, the National Assembly approves the Constitution Project of the Republic of Cuba, Diario de Cuba (July 22, 2018); Diaz-Canel: A Constitution that reflects today and the future of the Fatherland, Cubadebate (July 22, 2018); Semple, New Cuba Constitution, Recognizing Private Property, Approved by Lawmakers, N.Y. Times (July 22, 2018); Reuters, Cuba Economic Growth Weak, President Says, as Lawmakers Approve New Constitution, N.Y. Times (July 22, 2018).

U.S. Senator Jeff Flake and Former Google Executive Meet with Cuban President Diaz-Canel

On June 4, U.S. Senator Jeff Flake (Rep., AZ) and Eric Schmidt, former Google Chief Executive and now a member of the board of directors of its parent company, Alphabet Inc., met in Havana with Cuba’s President, Miguel Diaz-Canel. Others in attendance were Cuba Foreign Minister, Bruno Rodriguez; the Foreign Ministry’s Director General of the United States, Carlos Fernández de Cossío Domínguez; Philip Goldberg, U.S. Charge d’Affaires in Cuba; and  Cuba Communications Ministry officials.[1] Below is a photograph of Flake and Diaz-Canel.

Google and Cuba have been discussing how the company can help connect Cuba to undersea fiber-optic cables that run relatively near to the island, which would allow Cubans faster access to data stored around the world.

Afterwards at a press conference, Flake said, “We had a good meeting with President Diaz-Canel. … We are hopeful for the future if we can have more connectivity, more travel, more meetings with Cubans and vice versa. We were talking specifically about connectivity, but also about the challenges that have come up. Obviously we have had some setbacks.”

Presumably they also discussed the unfortunately unilateral U.S. Cuba Internet Task Force at the State Department that presumably is seeking to improve Cuba’s internet access. On February 9, 2018, this blogger advised  the Task Force that it “is based upon false & illegal premise that U.S. unilaterally may & should decide what Internet services Cuba should have & then take unilateral steps to provide those services & equipment. Instead U.S. should politely ask Cuba whether there was any way the U.S. could assist in improving their Internet service.”[2]

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[1]  Reuters, U.S. Senator Jeff Flake, Former Google CEO Meet With New Cuban President, N.Y. Times (June 4, 2018); Assoc. Press, Cuba’s new president meets with US senator, Google exec, Wash Post (June 4, 2018); Diaz-Canel received US Senator Jeff Flake and President of Google, Granma (June 4, 2008); Cuban President held a meeting with personalities from the United States, Cubadebate (June 4, 2018).

[2] See State Department Creates Cuba Internet Task force and Suspends Enforcement of Statutory Liability for Trafficking in Certain Cuban Expropriated Property, dwkcommentaries.com (Jan. 25, 2018); Cuba Protests U.S.’ Cuba Internet Task Force, dwkcommentaries.com (Feb. 1, 2018); Objections to the U.S.’ Cuba Internet Task Force, dwkcommentaries.com (Feb. 9, 2018).