WASHINGTON, Sept. 14, 2016 – Lawmakers and witnesses at a House hearing on agricultural trade with Cuba were in near unanimous agreement that increased commerce would benefit U.S. farmers, but some expressed concerns that it would also strengthen the Castro regime.
Chairman Mike Conaway started off the two-hour hearing by saying he would like trade to flow freely between the U.S. and Cuba, but he also expressed a deep mistrust for dealing with the country’s communist leaders.
“We are dealing with a regime that cares about little more than ensuring its own perpetuity and prosperity,” the Texas Republican said. “That being said, I think we all look forward to the day when the United States enjoys full, normalized relations with Cuba.”
At the center of the debate is the Cuba Agricultural Exports Act (H.R. 3687), a bill sponsored by Arkansas Republican Rick Crawford that would lift a restriction on private U.S. financing of agricultural exports to Cuba. If enacted into law, the measure is expected to open up hundreds of millions of dollars of new trade opportunities with the island nation.
One witnesses at the hearing, Mauricio Claver-Carone, said increased trade with Cuba at this time would be a mistake. Claver-Carone, executive director of a group called Cuba Democracy Advocates, said this would serve the interests of the Castro government, and that most of the higher-quality imported food now imported by Cuba does not reach the average citizen.
Claver-Carone, who said he still has relatives in Cuba, told lawmakers that when U.S. exporters make deals to sell to Cuba, there are no independent importers. There is only the Cuban government’s purchasing agency – ALIMPORT – and it makes decisions solely on political concerns, not market needs, he said.
“ALIMPORT primarily supplies government institutions, and the Cuban military's hard currency retail stores, hotels and other facilities that cater to tourists and other foreigners,” he said.
Massachusetts Democrat George McGovern took the opposite approach.The U.S. can only help improve Cubans’ lives and influence the government there if the U.S. has a strong presence, he said.
“I believe we should just lift the travel sanctions … and I believe we should lift our unilateral trade embargo,” McGovern said. “I see ending U.S. restrictions on agricultural trade as a step in the right direction. It’s certainly an area of policy where there is broad bipartisan consensus on ending any restrictions on U.S. agricultural goods and allowing our farmers to trade with Cuba, which will be good for our farmers and good for the Cuban people.”
Mark Isbell, an Arkansas rice farmer, spoke at the hearing on behalf of the USA Rice Federation. He testified that he and other producers would love to sell to Cuba, which lies just 90 miles off the Florida coast, but because of the financing restrictions they are losing out to exporters as far away as Vietnam, halfway around the world.
“Cuba imports nearly 600,000 tons of rice per year, and yet none of that originates from Arkansas or anywhere in the U.S. for that matter,” Isbell said. “With the appropriate statuatory changes, the U.S. could regain 30 percent of the Cuban rice business within two years. That is an estimated 135,000 metric tons of new demand …”
Isbell said that USA Rice believes it could capture 50 percent of the Cuban market in five years and 75 percent in 10 years.
Congress passed the Trade Sanctions Reform and Export Enhancement Act in 2000, allowing the U.S. to export agricultural commodities and medical supplies to Cuba, but in 2005 the Treasury Department ruled that U.S. banks could not finance those sales. That restriction has already been lifted for medical supplies and Crawford’s bill would do the same for agricultural exports.
Four of the five witnesses at Wednesday’s hearing agreed that the requirement that Cuba pay cash in advance is the single biggest obstacle to selling more corn, wheat, rice, poultry, dairy and other commodities to Cuba.
Matt Gibson, vice president and general manager for grains at Bunge North America, told lawmakers, “Most sources, including USDA’s Foreign Agriculture Service or the recently published International Trade Commission report on the subject, cite financing restrictions as the most significant reason for the decline in U.S. ag exports to Cuba.”
The ITC said in the report that Cuba bought an average of $313 million worth of U.S. agricultural commodities per year from 2010 to 2013, but that amount would more than double if the U.S. lifted the financing and other restrictions.
Conaway closed the hearing by recognizing that the path forward would not be easy, but stressed that most lawmakers agree in the end goal of selling more food to Cuba.
The chairman is a cosponsor of Crawford’s bill but said changes are possible.
“This bill is a work in progress,” he told reporters after the hearing. “We’re trying to fit it between the folks that want to do absolutely nothing and the folks that want to do absolutely everything. Somewhere in there, hopefully, there’s a path forward.”
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