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).

U.S. and Cuba Continue To Cooperate on Agriculture 

Quietly the U.S. and Cuba are continuing to hold bilateral meetings on various topics. Recently, for example, the meetings have covered cybersecurity, drug trafficking, terrorism, irregular immigration and money laundering.[1]

The latest, on April 10 and 11,  in Washington, D.C. was on the subject of agriculture.[2]

This meeting provided the opportunity to review the state of the implementation of the countries’ Framework Memorandum of Understanding on Agriculture and the Memorandum of Understanding on Animal and Plant Health. In particularly, both parties reviewed the compliance with the activities previously agreed upon, and analyzed the new actions proposed and other initiatives to give continuance to the technical exchanges.

This bilateral cooperation benefits both Cuban and U.S. farmers and helps promote the sustainability and development of agriculture, which are related to organic agriculture, soil management, water conservation, the prevention and treatment of plant pests and animal diseases, as well as to the actions for organic certification and seeds, among others.

The Cuban delegation was led by Moraima Céspedes Morales, Director for International Affairs at the Ministry of Agriculture, and composed of other officials of the ministries of Agriculture and Foreign Affairs. The U.S. delegation was led by John P. Passino, Director for Western Hemisphere at the U.S. Department of Agriculture and composed of other officials of that agency and of the Department of State.

The meeting was held in an ambiance of respect and professionalism. Both delegations shared the view to underscore the importance of maintaining the bilateral cooperation in these topics.

Conclusion

It is refreshing to know that the U.S. and Cuba are continuing to hold meetings on various subjects of mutual interest despite all the hostile rhetoric from the U.S.

At the same time it is disappointing that there was no mention of this latest meeting on the websites of the U.S. Departments of State or Agriculture or in the U.S. major news media.

However, on April 5, U.S. Senator John Boozman (Rep., AR) addressed the subject of U.S. agricultural exports to Cuba in a short article that stated the following: “United States’ producers are unable to fully tap into the Cuban market because federal law prohibits private financing for agricultural trade with Cuba. This misguided policy creates a major roadblock to trade. That’s why Sen. Heidi Heitkamp, D-N.D., and I introduced the Agriculture Export Expansion Act to lift the ban on private banks and companies offering credit for agricultural exports to Cuba. It’s a small step that would help level the playing field for farmers and exporters, while simultaneously exposing Cubans to American ideals, values and products. A true win-win for American farmers and the Cuban people.”[3]

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[1]  This blog has commented on these bilateral meetings. E.g., Cuba and U.S. Continue To Hold Bilateral Meetings on Various Issues (Jan. 18, 2018).

[2]  Cuba Foreign Ministry, Representatives from Cuba and the United States talk about cooperation in agriculture (April 11, 2018); Cuba Embassy in U.S., Representatives from Cuba and the United States talk about cooperation in agriculture (April 11, 2018); Cuba and the United States exchange on cooperation in agriculture, Granma (April 12, 2018); Washington and Havana talk about agriculture in a new technical meeting, Diario de Cuba (April 12, 2018).

[3] Boozman, Time to expand U.S. agricultural exports to Cuba, WashingtonDC100 (April 5, 2018).

President Trump Announces Reversal of Some Cuba Normalization Policies

On June 16 in the Little Havana district of Miami, Florida, President Donald Trump announced a reversal of some aspects of the Cuba normalization policies that had been instituted by his predecessor, President Barack Obama. With a flourish at the end of his speech, Trump signed the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba to document the new policy. Back in Washington, D.C. the White House issued a Fact Sheet and a Background Briefing and the U.S. Department of the Treasury issued Frequently Asked Questions and Answers About the New Policy.

An examination of these documents, however, reveals that there is more smoke than fire to the changes. Most of the preexisting normalization policies and actions are not affected, and the changes that were made by executive action can be overturned by federal legislation.

Subsequent posts will review U.S. and Cuban reactions to these changes before providing this blogger’s reactions and recommendations.

National Security Presidential Memorandum[1]

The Memorandum’s purpose in grandiose language is “to promote a stable, prosperous, and free country for the Cuban people. . . . [to] channel funds toward the Cuban people and away from a regime that has failed to meet the most basic requirements of a free and just society [and to condemn abuses by the Cuban regime]. . . . [The] Administration will continue to evaluate its policies so as to improve human rights, encourage the rule of law, foster free markets and free enterprise, and promote democracy in Cuba.” (Section 1)

The Memorandum in section 2 then states the Administration’s policy shall be to:

  • “(a) End economic practices that disproportionately benefit the Cuban government or its military, intelligence, or security agencies or personnel at the expense of the Cuban people.
  • (b) Ensure adherence to the statutory ban on tourism to Cuba.
  • (c) Support the economic embargo of Cuba described in [federal statutes] . . . (d) Amplify efforts to support the Cuban people through the expansion of internet services, free press, free enterprise, free association, and lawful travel.
  • (e) Not reinstate the ‘Wet Foot, Dry Foot’ policy, which encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the [U.S.].
  • (f) Ensure that engagement between the [U.S.] and Cuba advances the interests of the [U.S.] and the Cuban people. . . . [including] advancing Cuban human rights; encouraging the growth of a Cuban private sector independent of government control; enforcing final orders of removal against Cuban         nationals in the [U.S.]; protecting the national security and public health and safety of the [U.S.], including through proper engagement on criminal cases and working to ensure the return of fugitives from American justice living in Cuba     or being harbored by the Cuban government; supporting [U.S.] agriculture and protecting plant and animal health; advancing the understanding of the [U.S.] regarding scientific and environmental challenges; and facilitating safe civil  aviation.”

The Memorandum in section 3 concludes with detailed directions for implementation.

White House Fact Sheet[2]

The White House Fact Sheet on this policy change stated the following as its objectives: (1) “Enhance compliance with United States law—in particular the provisions that govern the embargo of Cuba and the ban on tourism; (2) Hold the Cuban regime accountable for oppression and human rights abuses ignored under the Obama policy; (3) Further the national security and foreign policy interests of the United States and those of the Cuban people; and (4) Lay the groundwork for empowering the Cuban people to develop greater economic and political liberty.”

The Fact Sheet then stated the following “Summary of Key Policy Changes:”

  • “The new policy channels economic activities away from the Cuban military monopoly, Grupo de Administración Empresarial (GAESA), including most travel-related transactions, while allowing American individuals and entities to develop economic ties to the private, small business sector in Cuba. The new policy makes clear that the primary obstacle to the Cuban people’s prosperity and economic freedom is the Cuban military’s practice of controlling virtually every profitable sector of the economy. President Trump’s policy changes will encourage American commerce with free Cuban businesses and pressure the Cuban government to allow the Cuban people to expand the private sector.”
  • “The policy enhances travel restrictions to better enforce the statutory ban on United States tourism to Cuba.  Among other changes, travel for non-academic educational purposes will be limited to group travel.  The self-directed, individual travel permitted by the Obama administration will be prohibited.  Cuban-Americans will be able to continue to visit their family in Cuba and send them remittances.”
  • “The policy reaffirms the United States statutory embargo of Cuba and opposes calls in the United Nations and other international forums for its termination. The policy also mandates regular reporting on Cuba’s progress—if any—toward greater political and economic freedom.”
  • “The policy clarifies that any further improvements in the United States-Cuba relationship will depend entirely on the Cuban government’s willingness to improve the lives of the Cuban people, including through promoting the rule of law, respecting human rights, and taking concrete steps to foster political and economic freedoms.”

Significantly this Fact Sheet did not contain actual new regulations to implement the policy changes. Instead, “the Treasury and Commerce Departments [were directed] to begin the process of issuing new regulations within 30 days.  The policy changes will not take effect until those Departments have finalized their new regulations, a process that may take several months.  The Treasury Department has issued Q&As that provide additional detail on the impact of the policy changes on American travelers and businesses.”

White House Background Briefing[3]

The prior day the White House conducted a background briefing on this policy change for journalists.

In addition to presaging the chances noted above, it stated that the new policy was the result of “a full review of U.S. policy toward Cuba [led by the] National Security Council . . . [under the leadership of] General McMaster, [that] engaged in a thorough interagency review process, including more than a dozen working-level meetings, multiple deputies meetings, and principal meetings.  This interagency process included . . . the Treasury Department, the State Department, Commerce Department, the Department of Agriculture, the Department of Homeland Security, and the Department of Transportation. . . .”

“Additionally, during this process, the President met with members of Congress who are experts on Cuba policy and have been leaders in formulating Cuba policy, from a legislative perspective, for years.  These members also worked with us hand-in-glove in providing technical guidance and policy suggestions as we continued to formulate the policy and went through multiple drafts.”

“The President and other principals also met with members on both sides of the aisle in this process, and even, additionally, were sharing thoughts with those who have, I think, been advocates — in particular, agricultural trade with Cuba.”

U.S. Treasury Department FAQs[4]

The June 16th FAQs emphasize that the Department’s changes will become effective only upon its issuance of amendments to its Cuban Assets Control Regulation, which are expected in a couple of months.

The upcoming amendments will end individual people-to-people travel. But still permissible will be group people to-people travel: “educational travel not involving academic study pursuant to a degree program that takes place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. Travelers utilizing this travel authorization must maintain a full-time schedule of educational exchange activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba. An employee, consultant, or agent of the group must accompany each group to ensure that each traveler maintains a full-time schedule of educational exchange activities.”

“The announced policy changes will not change the authorizations for sending remittances to Cuba.”

Vice President Pence and President Trump’s Speeches Announcing the Change[5]

Trump’s speech was a full-blown condemnation of many Cuban policies and practices and U.S. past and current efforts to change those policies and practices that went far beyond the limited changes previously mentioned. He was introduced by Vice President Pence, who reiterated some of the same rhetorical devices regarding Cuba.

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[1] White House, National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba (June 16, 2017).

[2] White House, Fact Sheet on Cuba Policy (June 16, 2017).

[3] White House, Background Briefing on the President’s Cuba Policy (June 15, 2017).

[4] U.S. Treasury Dep’t, Frequently Asked Questions on President Trump’s Cuba Announcement (June 16m 2017); U.S. Treasury Dep’t, Frequently Asked Questions Related to Cuba (Jan. 6, 2017).

[5] White House, Remarks by the Vice President on the Policy of the United States Toward Cuba (June 16, 2017); White House, Remarks by President Trump on the Policy of the United States Towards Cuba (June 16, 2017); DeYoung & Wagner, Trump announces revisions to parts of Obama’s Cuba policy, Wash. Post (June 16, 2017); Davis, Trump Reverses Pieces of Obama-Era Engagement with Cuba, N.Y. Times (June 16, 2017); Schwartz, Trump Announces Rollback of Obama’s Cuba Policy, W.S.J. (June 16, 2017).

 

 

Conference on “Prospects for United States Cuba Normalization, Commerce and Investment”

On February 18, 2016, the Cuba Consortium hosted its first annual Washington Conference: “Prospects for United-States Cuba Normalization, Commerce and Investment.” [1]

The speakers at the Conference included Penny Pritzker, U.S. Secretary of Commerce; Rodrigo Malmierca, Cuban Minister of Foreign Trade and Investment; Tom Vilsack, U.S. Secretary of Agriculture; Benjamin Rhodes, Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting; and Andrea Gacki, Assistant Director, Compliance and Enforcement, Office of Foreign Asset Control, U.S. Department of Treasury. Here is a summary of their remarks.

Secretary Pritzker

Secretary Pritzker
Secretary Pritzker

In her speech, Pritzker said that she and the U.S. delegation on their visit to Cuba last October learned more about how the Cuban economy works, including the rules and regulations that govern the import, export, and distribution of goods across the island. This information helped to guide the most recent (January 2016) U.S. regulatory changes regarding Cuba.

Those new U.S. regulations created a general policy of approval of exports for purposes such as: disaster preparedness and relief, education, agricultural production, artistic endeavors, food processing, public transportation, Cuban civil society, enhanced communications on the island, and civil aviation safety.

Those new regulations also provided that the Commerce Department’s Bureau of Industry and Security will now review on a case-by-case basis proposed exports from U.S. companies to Cuban state-owned enterprises and government entities to determine if the export will meet the needs of the Cuban people. We had learned in our visit that in Cuba – as in many of our other trading partners around the world – it is necessary to work with state-owned enterprises in order to support the local private sector.

The corresponding new regulations from the U.S. Department of the Treasury permit financing for most authorized exports and travel authorizations.

In sum, whether environmental goods, telecommunications equipment, or products that private sector entrepreneurs need, the U.S. government’s regulatory changes permit a wide variety of trade and commercial activities.

However, if the U.S. is to truly maximize the benefits of our regulatory changes for the Cuban people, the Cuban government needs to make it easier for Cuban citizens to start their own businesses, purchase goods through wholesale markets, engage in external trade, secure credit, and access information online. These steps include making Cuban economic and business regulations publicly available; providing clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorizing Cuban imports of U.S. products that are now allowed by U.S. regulations.

The bilateral civil aviation agreement signed on February 16 is an example of what we have accomplished together.

“The U.S. embargo continues to be a roadblock to increasing engagement between our countries. As President Obama reaffirmed during his State of the Union address, our Administration strongly supports lifting the embargo, and we will continue to call on Congress to repeal it immediately.”

Minister Malmierca

Minister Malmierca
Minister Malmierca

Malmierca asserted that President Obama has the legal authority to adopt additional regulations that would permit Cuba to use the U.S. Dollar in international financial transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications.

The U.S. regulatory changes to date are positive, but they are not enough. For example, he said, since the December 2014 joint U.S.-Cuba announcement of normalization, six financial institutions have been fined nearly two billion dollars for trading with Cuba. These fines and the ban on the use of the U.S. Dollar have had serious negative effects on Cuba.

The previous day (February 17), Malmierca led a Cuban delegation at a meeting with Secretary Pritzker and other officials of the U.S. Department of Commerce. [2] On that occasion he made many of the same points just mentioned. He also pointed out that Cuba does not apply any coercive measures against U.S. companies or businesspeople and, in fact, welcomes them to do business on the island.

At that prior meeting in response to a question by Secretary Pritzker, Malmierca said that the next meeting of the Congress of the Communist Party of Cuba will seek to define the priority economic sectors for long-term development. “The most complex issue is that Cuba wants all these changes to be implemented without affecting the population; we do not want to apply shock measures or measures that may have a negative effect.”

This upcoming Congress will address the role of the market in the Cuban economy and the role of foreign investment in its economic development. This will seek to further consolidate changes adopted by Cuba before December 17, 2014, which are irreversible. “All the measures we are adopting, and which were sovereignly chosen long before December 17, 2014, . . . will also contribute to making the decisions we are making together more feasible,” he concluded.

Secretary Vilsack

Secretary Vilsack
Secretary Vilsack

Secretary Vilsack also criticized the U.S. embargo (blockade), noting that it restricts opportunities for trade between Cuba and the U.S. One area of such negative impact was the U.S. helping Cuba’s organic and urban farming practices.

The U.S. Agriculture Department is looking to identify business opportunities through a fund to which several U.S. agricultural companies voluntarily contribute. This fund, however, cannot use federal resources to explore business opportunities with the island, as is common practice, thus obstructing U.S. companies’ access to the Cuban market.

Although a U.S. law in 2000 authorized sales of agricultural products to Cuba, it required Cuba to pay in cash in advance, which has had a severe negative impact on such U.S. exports.

Associate Director Gacki

Associate Director Gacki
Associate Director Gacki

Gacki was unable to identify the specific law which prohibits Cuba’s use of the U.S. Dollar in international transactions, but said the Treasury Department currently was investigating whether there were other executive measures President Obama could adopt to reduce the adverse impacts on Cuba of restrictions on its use of the U.S. Dollar.

Assistant to the President Rhodes

Assistant to President Rhodes
Assistant to President Rhodes

Rhodes confirmed that Obama still has broad executive powers to make further and more substantial modifications to the U.S. embargo (blockade) policy.

Rhodes said that while the embargo policy may have had relevance in the past, the island is changing as are opinions of some Cuban-Americans. In addition, the increased numbers of Americans visiting Cuba are seeing why the embargo should be ended.

The Obama Administration, he added, is reviewing other potential regulatory changes that could be made within the existing legal framework.Thus, he believed it is possible to do more before the end of this administration to generate the necessary momentum to definitively end the embargo.

Conference Background

The Cuba Consortium is an assembly of companies, non-profit organizations, investors, academics, and entrepreneurs organized to track and examine the normalization process in both countries and to inform and prepare its members for opportunities to engage Cuba. They are complemented by foreign policy, political, economic, international development, legal, and cultural experts who have specialized knowledge of the diplomacy, politics, and economics of the normalization process.

The Consortium’s Advisory Board is co-chaired by Senators Nancy Kassebaum Baker and Tom Daschle and includes Dr. Michael Adams, Lon Augustenborg, Richard Blum, Sheila Burke, Tomas Diaz de la Rubia, Senator Byron Dorgan, Rodney Ferguson, Senator Bill Frist, Dr. Helene Gayle, Maurice Greenberg, Senator Bob Kerrey, Linda Klein, Fred Malek, Janet Napolitano, Thomas Ross, Senator Olympia Snowe, The Honorable Ellen Tauscher, Bill Weldon, and Rob Wilder.

The Consortium was organized by the Howard Baker Forum, which was founded by former Senator Howard Baker to provide a platform for examining specific, immediate, critical issues affecting the nation’s progress at home and its relations abroad under a philosophy of reasoned consensus, founded upon an agreed set of facts.

Conclusion

The Consortium and its conference join the U.S. Agricultural Coalition for Cuba and Engage Cuba as important bipartisan U.S. efforts to promote U.S.-Cuba reconciliation. I applaud all of their efforts.

On the same day of this conference, the White House announced that President Obama and Michelle Obama will be visiting Cuba on March 21 and 22. The White House Press Secretary said, “In Cuba, the President will work to build on the progress we have made toward normalization of relations with Cuba – advancing commercial and people-to-people ties that can improve the well-being of the Cuban people, and expressing our support for human rights. In addition to holding a bilateral meeting with Cuban President Raul Castro, President Obama will engage with members of civil society, entrepreneurs and Cubans from different walks of life.”

The previously mentioned Benjamin Rhodes also issued a similar statement that also reviewed the various steps towards normalization since December 17, 2014.

Before President Obama’s trip, I anticipate and hope that the U.S. will announce additional steps in the process of normalization, including:

  • issue new regulations allowing or expanding Cuba’s ability to use the U.S. Dollar in international transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications;
  • announce the ending of special U.S. immigration benefits for Cubans, including the policy of allowing entry without visas into the U.S. of Cubans arriving by land (the dry feet policy); and
  • announce further steps in the process of resolving U.S. claims against Cuba for expropriation of property owned by U.S. persons without compensation.

In addition, it is hoped that before President Obama’s trip Cuba will make Cuban economic and business regulations publicly available; provide clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorize Cuban imports of U.S. products that are now allowed by U.S. regulations. In addition, some improvement in Cuban human rights would be helpful, an objective apparently to be pursued in Havana next week by Secretary of State John Kerry. ==========================================

[1] Gomez, Rapprochement moving forward, Granma (Feb. 22, 2016). Amazingly a 2/23/16 Google search of “Cuba Consortium” did not reveal any U.S. media coverage of this Conference. Secretary Pritzker’s speech was on the website of the U.S. Treasury Department.

[2] Gomez, Malmierca: Obama has support to continue dismantling the blockade, Granma (Feb. 18, 2016).

 

 

 

 

U.S. Secretary of Agriculture Visits Cuba

On November 11-13, U.S. Secretary of Agriculture Tom Vilsack, a former Iowa Governor, visited Cuba.[1]

Vilsack in Cuba

In his meeting with Ricardo Cabrisas Ruiz, a Council of Ministers Vice President, they discussed international economic relations, the interest of the U.S. agriculture sector in the island and obstacles to trade between the two countries caused by the U.S. embargo (blockade). Vilsack and the U.S. delegation are on the left in the above photo; the Cuban delegation, on the right.

At a meeting with Cuban Agriculture Minister, Gustavo Rodriguez Rollero, Vilsack said the U.S. was “very anxious to establish a positive working relationship with Cuba and to work together cooperatively in a number of issues.” These included organic farming, agricultural cooperatives, the Cuban experience in biotechnology, confronting common pests and diseases and the impact of climate change. They also talked about Cuban procedures for fruit and vegetable export certification and field inspections.

The U.S. delegation also had a meeting with Cuba’s Foreign Minister, Bruno Rodriguez, and Josefina Vidal Ferreiro, the Director General of U.S. Affairs at the Foreign Ministry.

Vilsack visited an agricultural market in Havana and was impressed by the fact that the vegetables and fruits came from hundreds of farms scattered throughout the city. “Urban agriculture is something that Cuba has long practiced and the United States wants to learn,” he said.

On a visit to two cooperatives, near the city, a member of one of the coop’s board of directors expressed confidence that Cuba’s new relationship with the U.S. will make life on the farm easier. The coop director said, “We believe that this represents something that will bring us improvement in every sense: production, better equipment, new tractors.”Vilsack, in turn, observed that it “was very clear that the farmers are people who have deep love for the land and the work they do for the citizens of their country.” He noted that they expressed their concern over problems with machinery, irrigation systems and tools needed to plant and harvest and the impact of climate change. But, he said, their creativity and innovation to maintain production levels were impressive.

In a press conference at the U.S. Embassy in Havana Vilsack said that lifting trade barriers with Cuba was a matter of “common sense” and promised to look for ways to relax existing measures. “We have work to do to identify those barriers, understanding and seeing what kinds of flexibilities may be to remove them or at least minimize them.” The Secretary also complimented Cuba’s reaction to the recent U.S. problems with avian flu. “Unlike other countries which decreed a general ban on importing U.S. poultry, Cuba “faced the problem regionally, looking state by state, which is the focus of international organizations and which is based on science.”

According to Vilsack, the U.S. stands to gain a significant portion of Cuba’s agricultural import market. That market is about $2 billion annually, with the U.S. holding about 16 percent. Before sanctions were put in place, the U.S. was responsible for nearly half. “There is no reason why if barriers can be reduced and eliminated that we wouldn’t be in a very competitive circumstance,” Vilsack stated that a number of U.S. agricultural products could be attractive in Cuba, including pork, corn, soybeans and poultry.

Important in this regard, said Vilsack, was the need for the U.S. to eliminate the ban on trade credit on U.S. agricultural exports to Cuba. A bill to do just that, Vilsack mentioned, recently had been introduced in the House of Representatives by Congressman Rick Crawford (Rep., AK).[2]

“Trade is a two-way street,” Vilsack said. “Consumers in the U.S. are interested in having a variety of products throughout the year and [U.S. agricultural] imports have reached record levels in recent years. One of the challenges we have when ending the embargo [blockade] is a container that comes with products to Cuba should return to the U.S. with Cuban products. This is common sense.” Such Cuban exports would be assisted by the U.S.’ having an office in Cuba for the Agriculture Department’s Foreign Agricultural Service and Animal and Plant Health Inspection Service personnel to facilitate technical conversations and addressing any problems in Cuba’s meeting U.S. requirements.

Moreover, Vilsack noted that Cubans have embraced organic agriculture, one of the fastest-growing U.S. food segments. Cuba has a strong organic sector because it hasn’t had access to chemicals and pesticides. “They had no other alternative but to be organic.” Vilsack emphasized that this is an opportunity for Cuba because only 1 percent of America’s land mass is committed to organic production. “There is no question the demand is there.”

Vilsack was accompanied by Democratic Senator Jeff Merkley (Oregon) and three Democratic members of the House of Representatives: Kurk Schrader (Oregon), Suzan Delbene (Washington); and Terri Sewell (Alabama) as well as other representatives from the Department of Agriculture and the Chargé d’Affaires of the U.S. Embassy in Havana, Jeffrey DeLau­rentis.

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[1] Cabrisas receives U.S. secretary of agriculture, Granma (Nov. 12, 2015); Gomez, USA wants to expand trade with Cuba, but maintain restrictions, Granma (Nov. 12, 2015); US Agriculture Secretary talks with his counterpart in Havana, CubadDebate (Nov. 12, 2015); Gomez, Lifting the blockade is a matter of common sense, Granma (Nov. 12, 2015); Assoc. Press, US Agriculture Secretary Visits Cuba to Build Trade Momentum, N.Y. Times (Nov. 13, 2015); Minister of Foreign Affairs received the Secretary of Agriculture of the United States, Granma (Nov. 13, 2015); Doering, Vilsack: Cuba a great opportunity for U.S. agriculture, Des Moines Register (Nov. 13, 2015); Vilsack: Permanent USDA presence needed in Cuba, Farm Futures (Nov. 16, 2015).

[2] On October 6, 2015, Representative Rick Crawford introduced H.R. 3687, the Cuba Agricultural Exports Act, on behalf on himself and House Agriculture Committee Chairman Michael Conaway (Rep., TX) and Representative Ted Poe (Rep., TX) with 11 other Republican and 2 Democratic cosponsors. Crawford said this bill “would repeal restrictions on export financing and give producers access to Department of Agriculture marketing programs that help the US compete in foreign markets. Further, this legislation enables limited American investment in Cuban agribusinesses, as long as US regulators certify the entity is privately-owned and not controlled by the Government of Cuba, or its agents.” Crawford concluded, “ I believe that agriculture trading partnerships with Cuba will help build a foundation of goodwill and cooperation that will open the door to long-sought reforms in the same the way that American influence has brought reform to other communist states.” (Crawford, Crawford Introduces Cuba Agricultural Exports Act (Oct. 6, 2015); Poe, Cuba Agricultural Exports Act (Oct. 7, 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.

 

American People’s Reactions to U.S.-Cuba Reconciliation

After looking at international, Cuban and U.S. Government reactions to the December 17th announcement of U.S.-Cuba reconciliation, we now examine the reactions of the American people.

Those reactions can be obtained from public opinion polls and the views of prominent Americans, newspapers and business interests and from efforts to promote understanding of the issues and congressional support of the changes.

American public opinion polls consistently have shown that a majority of Americans favor reestablishing relations with Cuba. In April 2009 the favorable opinion ranged from 60% to 71% with the opponents from 20% to 30%. In April 2014 it was 51% to 20%, and in October 2014, 56% to 29%. [1]

This was confirmed just after President Obama’s December 17th announcement of the breakthrough with Cuba in a poll conducted by ABC News and the Washington Post. Re-establishing diplomatic relations was supported, 64% to 31%. Ending the embargo, 68% to 29%. Ending travel restrictions, 74% to 24%. [2]

On January 19, 2015, over 70 prominent Americans sent a letter to President Obama ”commending [him] on the historic actions [he is] taking to update America’s policy toward Cuba and Cuban citizens. Our new posture of engagement will advance our national interests and our values by empowering the Cuban people’s capacity to work towards a more democratic and prosperous country–conditions that are very much in the U.S. interests.” [3]

The New York Timeseditorial of December 18, 2014, “Mr. Obama’s Historic Move on Cuba,” stated that the changes in U.S. relations with Cuba “ends one of the most misguided chapters in American foreign policy. The White House is ushering in a transformational era for millions of Cubans who have suffered as a result of more than 50 years of hostility between the two nations.” 

The Wall Street Journal’s editorial on the announcement of the changes first admitted that “20 years ago these columns called for lifting the U.S. trade embargo on Cuba. We did so to assist the impoverished Cuban people and perhaps undermine the regime.” The Journal, however, went on to argue that “Mr. Obama’s approach will provide immediate succor to the Castro government in the hope of eventually helping the Cuban people.”  A similar negative view was expressed by the Journal’s conservative columnist, Mary Anastasia O’Grady, “So How’s That Cuba Deal Going?” Another of the Journal’s conservative columnists, Peggy Noonan, however, reached a different conclusion in her article, “The Cuban Regime is a Defeated Foe: In time, normalized relations will serve the cause of freedom.

An even more negative review was provided in the Washington Post’s editorial, “President Obama’s ‘betrayal’ of Cuban democrats.” 

On January 8, 2015, the United States Agricultural Coalition for Cuba was launched by 30 companies and other organizations “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.” Speaking in support of this Coalition were U.S. Secretary of Agriculture (Tom Vilsack), Governor of Missouri (Jay Nixon), U.S. Senators Amy Klobuchar (Dem., MN) and Jerry Moran (Rep., KS) and U.S. Representatives Sam Farr (Dem., CA), Kevin Cramer (Rep., ND) and Rodney Davis (Rep., IL).

Another supporter of the reconciliation, including the ending of the embargo, is the U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. On December 17, 2014, it stated, ““The U.S. business community welcomes today’s announcement, and has long supported many of the economic provisions the president touched on in his remarks. We deeply believe that an open dialogue and commercial exchange between the U.S. and Cuban private sectors will bring shared benefits, and the steps announced today will go a long way in allowing opportunities for free enterprise to flourish. The Chamber and its members stand ready to assist as the Cuban people work to unleash the power of free enterprise to improve their lives.”

CodePINK (Women for Peace) has started a campaign to have citizens: “Tell Congress that you support the President’s effort to improve US-Cuba relations, and you’d like them to go even further by lifting all travel restrictions, take Cuba off the terrorist list, and return Guantanamo naval base to the Cuban people.” 

An important event to promote Minnesotans understanding of these issues will be on February 23rd (9:30-11:00 a.m.): “Modernizing U.S.-Cuba Relations Summit.” [4] This Summit has been called by our Senator Amy Klobuchar, a self-identified “strong supporter of normalizing ties with Cuba and increasing travel and commerce that could create new economic opportunities for American farmers and businesses while increasing the quality of life for Cubans.” After the Senator’s opening remarks, the keynote speaker will be Michael Scuse (Undersecretary for Farms and Foreign Agricultural Services, U.S. Department of Agriculture). The Senator will then moderate a panel discussion with Dave Fredrickson (Commissioner, Minnesota Department of Agriculture), Devry Boughner Verwerk (Cargill Incorporated’s Director of Latin American Corporate Affairs and Chair of the U.S. Agricultural Coalition for Cuba), Rodolfo Gutierrez (Executive Director, Hispanic Advocacy and Community Empowerment through Research) and Ralph Kaehler (Minnesota farmer who has participated in trade missions to Cuba).

I am helping to organize Minnesotans for U.S.-Cuba Reconciliation to inform the citizens of our state about the importance of this breakthrough and to mobilize public opinion to persuade our representatives in Congress to support the various measures to implement such reconciliation.

Conclusion

Now is the time for U.S. citizens who want to see our country reconciled with Cuba to be active. Say thank you and support, politically and financially, senators and representatives who support this effort. Identify those in Congress who appear to be open to this point of view from the citizenry and communicate your views to them. Write letters to the editor or op-ed articles for publication. Or, like me, research and write blog posts on the issues. Talk with your friends and colleagues.

Fellow Minnesotans should contact me to join Minnesotans for U.S.-Cuba Reconciliation. Citizens in other states, I hope, will organize similar groups.

I also invite comments to this post with corrections or additional facts and sources regarding the American people’s reactions to this important change in our country’s relations with Cuba.

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[1] Edwards-Levy, Polls Show Support for U.S. To Re-Establish Ties with Cuba, Huff. Post (Dec. 18, 2014); Dugan, Americans on Cuba: For Normalized Relations, but Party Divide Exists, Gallup (Dec. 18, 2014). 

[2] Holyk, Poll Finds Broad Public Support for Open Relations with Cuba, abc News (Dec. 23, 2014).

[3] Fuerte, Prominent USA personalities Urge Obama to Deepen Relationship with Cuba, Havana Times (Jan 19, 2015). The signers of the letter included Bruce Babbitt (former Governor of Arizona and former U.S. Secretary of the Interior), Harriett Babbitt (former U.S. Ambassador to the Organization of American States), Samuel Berger (former U.S. National Security Advisor), Chet Culver (former Governor of Iowa), Francis Fukuyama (Stanford University), Dan Glickman (former U.S. Congressman and former U.S.Secretary of Agriculture). Thomas Pickering (former U.S. Ambassador and former U.S. U.S. Under Secretary of State for Political Affairs), Bill Richardson (former Governor of New Mexico and former U.S. Ambassador to the U.N.), Ken Salazar, former Colorado Attorney General, former U.S. Senator and former U.S. Secretary of the Interior), George Schultz (Former U.S. Secretary of State, Treasury and Labor) and Strobe Talbott (former U.S. Deputy Secretary of State).

[4]  The Summit will be at at the University of Minnesota College of Continuing Education, Room 135, 1890 Buford Avenue, St. Paul, MN 55108. It is free and open to the public. Please RSVP to Clara_Haycraft@Klobuchar.senate.gov.