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Bill would loosen Cuba trade embargo

If newly introduced House legislation passes, trade and travel to Cuba will be much easier. Put forward by Minnesota Rep. Collin Peterson, House Agriculture Committee chairman, and 30 co-sponsors, the “Travel Restriction Reform and Export Enhancement Act — H.R. 4645” would allow U.S. agriculture exports to dramatically increase, according to agriculture advocacy organizations. The House Agriculture Committee is expected to debate the reforms within weeks.

“Helping feed Cuba is good for the U.S. economy and for the Cuban people,” said Peterson in a statement. “This bill increases the ability of our farmers to sell their products to Cuba just like they do with our other trading partners.”

Further, “U.S. producers are the closest suppliers that can help meet the food and agriculture needs of the Cuban people. Opportunities to sell to paying customers in Cuba have been hindered by bureaucratic red tape and by arbitrary prohibitions on the ability of U.S. citizens to travel to Cuba. This bill cuts the red tape and allows that trade and travel to happen.”

Last year, the Obama administration loosened restrictions on Cuban-Americans who want to travel to see, and provide money to, relatives living in the communist nation. While this action further widened a recent crack in the nearly 50-year-old embargo between the United States and Cuba, U.S. business interests — including an especially vocal agriculture sector — said it wasn’t enough. Onerous restrictions regarding banking and shipping inhibit trade and remain in place.

Aimed at those restrictions, Peterson’s legislation would allow direct payments between Cuban and U.S. banks — something that is now prohibited. Currently, Cuba must make payments for U.S. commodities through a third party and, in the process, incur whatever conditions and fees the third party deems appropriate. Payment for whatever commodity is being purchased must also be made prior to shipment.

If passed, Peterson’s legislation would also allow any U.S. citizen to travel to Cuba.

And it isn’t just House members that are pushing for the embargo reform. Many Mid-South politicians have long backed normalization of trade with Cuba.

“I applaud Chairman Peterson for joining me in my on-going efforts to open trade with Cuba,” said Arkansas Sen. Blanche Lincoln, chairman of the Senate Agriculture Committee. “By introducing a bill (titled ‘Promoting American Agriculture and Medical Exports Act, S1089’) that is nearly identical to legislation I introduced last May with Senate Finance Committee Chairman Max Baucus, Chairman Peterson is helping move us one step closer to giving our producers access to this important market.”

Agricultural organizations have lined up to endorse the House move.

“Even though U.S. firms offer reliable trading partners, quality products and competitive prices, current U.S. policy hampers their ability to supply the Cuban market — if the United States is not the supplier, the European Union or Brazil will be happy to take our place,” said Roger Johnson, National Farmers Union (NFU) president.

“Agricultural producers in the United States are well-positioned to benefit from additional trade in Cuba. This will also assure Cubans a source for sustainable, high-quality food for its people.”

If the embargo is lifted, or significantly loosened, U.S. rice is among commodities expected to receive a substantial sales boost. Right now, Cuba buys most of its rice from Vietnam.

Peterson’s bill “would correct the Office of Foreign Asset Control interpretation of the ‘payment in advance’ rule for shipment of agricultural products to Cuba and permit direct payments from Cuban to U.S. financial institutions for U.S. agricultural exports,” said the USA Rice Federation in a statement.

“USA Rice Federation has proactively worked for the past 15 years to remove agricultural trade barriers with Cuba,” said Betsy Ward, USA Rice Federation president and CEO. “Cuba has the potential to be a 400,000 to 600,000 metric ton market for U.S. rice and we applaud Chairman Peterson’s proposed legislation, which would not only provide Cubans with more of the rice they have said they prefer, but would also help boost the U.S. economy.”

The American Soybean Association (ASA) is also pushing for the reforms. In 2008, according to the ASA, more than $134 million worth of U.S. soy products were exported to Cuba.

“ASA opposes restrictions on exports of U.S. agricultural commodities for national security or foreign policy reasons that are not supported by all other major world producers and exporters,” said Rob Joslin, ASA president and soybean producer from Sidney, Ohio. “ASA favors a normal trading relationship with Cuba including direct banking and elimination of the cash in advance rule. ASA also supports the country’s eligibility for the Foreign Market Development and Market Access Programs.”

U.S. producers are “well-positioned to benefit from additional trade in Cuba,” Joslin said. “U.S. suppliers can reach the three major Cuban ports in a matter of one day or less, compared to 25 days from Brazil.”


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