February 23, 2020

Cuba Trade and U.S. Agriculture

Financial Times writer Shawn Donnan reported today that, “Barack Obama’s historic visit to Cuba this week has been rich in symbolism, but even as the president has lifted restrictions on American companies to do business with the Caribbean nation, one key constituency remains frustrated: the powerful US agriculture lobby.

“Agriculture-related exports to the island, which sits just 90 miles off the Florida coast, have been allowed under US law since 2001 and with Cuba importing 80 per cent of its food, Washington is eager to penetrate a market officials say is worth $2bn a year.”

The FT article explained that, “But after peaking at more than $710m in 2008, US agricultural exports to the country have been steadily falling ever since. Last year they were worth just $180m, according to US trade statistics, giving the US less than 10 per cent market share and leaving it behind Brazil, the EU and Argentina as a source for food in Cuba.

“In an effort to turn that round, the US and Cuba on Monday are set to agree to increase their co-operation on agriculture and improve their technical links. The US is also due to lift restrictions on growers using special research and marketing bodies to pitch their products in Cuba.”

Today’s article pointed out that, “However, the steps do not address the financial restrictions that remain on Cuban buyers of US agricultural products and are thus unlikely to do much in the short term to increase US exports to the Caribbean island.

“Although Cuban buyers have since January been able to use US banks to finance purchases of other imports, those wanting to buy crops or meat produced in the US still have to pay cash up front or use a third-party bank.

Such restrictions are codified into US law and cannot be lifted by executive order, the tool on which Mr Obama has relied to push through his change in Cuba policy. With the Republicans who control Congress determined not to remove the longstanding US trade embargo, that has left the Obama administration’s hands tied and the US agriculture lobby frustrated.”

In conclusion, today’s article stated that: “Mr Obama is making history and US chicken, pork, wheat and soyabean farmers are eager to take advantage. But for the time being, Republicans seem distinctly unwilling to play along.”