Congress Moving to Improve Trade With Cuba

Congress Moving to Improve Trade With Cuba
New measures regarding credit would make it easier to export
agricultural products.
By Xiaolan Tang April 27, 2015 | 4:26 p.m. EDT

Congress has been moving swiftly on rule changes that could provide
American producers of agricultural products greater access to Cuba by
removing barriers to credit.

Legislation was introduced last week by Sen. Heidi Heitkamp, D-N.D.,
andSen. John Boozman, D-Ark., aiming to ease agricultural trade.

"The biggest obstacle in that effort involves private companies and
banks not being able to provide credit to export agricultural
commodities to Cuba, where these crops are in high demand," Heitkamp said.

Until recently, under the Trade Sanctions Reform and Export Enhancement
Act of 2000, exports of certain goods were allowed to go to Cuban
markets only if cash payments were made before the goods were shipped.
While third-party financing is available, U.S. banks are not able to
finance exports to Cuba. In January, OFAC revised interpretation of the
statutory term "cash-in-advance" to make it essentially
"cash-on-delivery" -- though they did not change the phrasing itself. It
also authorized U.S. banks to establish correspondent accounts at Cuban
banks.

Still, critics say this practice prevents U.S. farmers from competing
effectively against other international exporters.

"The reason for the most loss in our market share there was our
inability to extend credit, as our competitors, the EU and Brazil and
others are doing," said Michael T. Scuse, undersecretary of the
Department of Agriculture, at a Senate hearing on Tuesday, citing a
study by University of Florida. "So the playing field right now is not
level."

President Barack Obama announced at the end of last year the
re-establishment of diplomatic relations with Cuba and a series of
actions aimed at easing trade restrictions.

In February, a bipartisan group of senators introduced The Freedom to
Export to Cuba Act, which would allow U.S. companies to export products
to Cuba directly, remove financial restrictions on business transactions
and allow U.S. banks to extend credit to Cubans for the purchase of
American goods.

Most types of trade with Cuba is still prohibited.

U.S. agricultural exports to Cuba reached a peak of $658 million by
2008. However, they had fallen by more than half, to $300 million by the
end of last year. Global agricultural exports to Cuba have doubled over
the past decade to $1.7 billion.

According to World Food Program data, Cuba imports about 80 percent of
its food, mainly from China, Brazil and the European Union.

Half of American exports to Cuba are poultry products, and Scuse said
there is a potential to gain greater market share for U.S. producers of
corn, rice and dairy, since Cuba is less than 100 miles away from the U.S.

For their part, farmers are ready to begin selling to Cuba.

"I would suggest that Congress carefully consider whether there is a
compelling, practical reason to restrict the freedom of Americans to
engage in commerce, especially for those who are just trying to sell
wholesome, American-grown food," Doug Keesling, owner of Keesling Farms
in Kansas, told the Senate Committee on Agriculture, Nutrition and
Forest last week.

Source: Congress Moving to Improve Trade With Cuba - US News -
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