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Last Updated:5/4/09

U.S. Agricultural Trade with Cuba

"This is not economics. It is White House ideology."

--Senator Max Baucus (D-Montana) in response to President Bush's threat to veto the appropriations bill for the departments of Transportation, Treasury, Housing and Urban Development, and Judiciary because they contain a provision to cut off any money that would be used to implement the revised definition of "cash in advance" payments to Cuba.

Quick facts:

  • The value of U.S. agricultural sales to Cuba totaled $710 million in 2008, a 61% increase from 2007.
  • The U.S. International Trade Commision estimates that U.S. agricultural sales would double if trade restrictions were lifted.
  • 38 U.S. states have signed agreements to export to Cuba.
  • The value of total U.S. exports of agricultural products to Cuba was approximately $500 million in 2006.
  • Cuban trade with Venezuela and China is growing rapidly.

"We need a more rational policy toward Cuba."

--Representative Jeff Flake (R - AZ). 1/12/2007. Discussion on Cuba and US Policy Choices after Rep. Flake led a congressional delegation to Cuba, the largest such delegation to visit the island since 1959.

Recent History

2005 - Rumors begin to circulate that the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury is going to clarify the TSREEA of 2000. "Payment of cash in advance” with regard to shipments to Cuba would mean cash in advance of the shipment of goods. The new ruling would be problematic because if Cuba must pay for the goods before they leave a U.S. port, the goods become Cuban assets, vulnerable to seizure to satisfy unrelated property claims against Cuba. This would make Cuba less likely to import American agricultural goods.

Agricultural interests are worried about the possible new legislation and go to Senator Larry E. Craig, who introduces the Agricultural Export Facilitation Act. Representative Jerry Moran introduces an identical bill in the House. The legislation would eliminate a number of current restrictions on trade with Cuba. It would allow direct payments from Cuba to U.S. banks, elimintating the need for 3rd party countries, it would ease U.S. - Cuba travel restrictions for trade purposes, and it would define "cash payment in advance" under the TSREEA of 2000 as cash in advance of the delivery of goods. It would also repeal Section 211 of the Department of Commerce and Related Agencies Appropriations Act of 1999, which states that trademarks associated with companies that were confiscated by the Cuban government will not be recognized, renewed or issued in the U.S. without consent of the original order. It also prohibits foreign entities access to U.S. civil courts if they wish to contest rights in these cases. The Craig bill states that Section 211 is a violation of international treaties and must be repealed to preserve the rights of U.S. nationals holding trademarks in Cuba.

-February - OFAC, under pressure from the Bush Administration to harden policy towards Cuba, announces that "payment of cash in advance” means cash in advance of the shipment of goods. The ruling is met with strong opposition by agricultural interests.

-March - The Agricultural Export Facilitation Act is referred to committee in the Senate and House.

-Senator Chambliss and Rep. Jo Emerson introduce legislation that would define cash payment in advance as in advance of delivery, without any of the additional legislation in the Agricultural Export Facilitation Act. The bill is sent to committee in the Senate and House.

-May - Senator Max Baucus condemns the February rule change by the Treasury Department, which makes American exporters less competitive in the Cuban market than foreign vendors. He also restates the intention of Congress to open up the Cuban market to agricultural sales for the benefit of American farmers, as well as the American agricultural industry.

-July - Senator Max Baucus continues to block every single senior Treasury nominee -- a dozen or more -- until the Bush administration agrees to the provisions Rep. Emerson introduced to the Treasury bill. The provisions would cut off money used to implement the new "cash in advance" definition, which has caused a 26% decrease in sales to Cuba in just 4 months. President Bush threatens to veto the appropriations bill for the departments of Transportation, Treasury, Housing and Urban Development, and Judiciary if the Emerson provision is not removed.

2004 - Cuba ranks 25 of 228 in importance of agricultural export markets for U.S. companies, up from the bottom of the list in 2001.

-October - For the 13th consecutive year, the UN General Assembly votes overwhelmingly against the US embargo against Cuba. The vote is 179 to 4 (the U.S., Israel, Marshall Islands and Palau), with 1 abstention (Micronesia).

2001 - Hurricane Michelle strikes Cuba and the U.S. offers humanitarian assistance to the Cuban people. The Cuban government responds that it does not need humanitarian assistance, but that it will allow the U.S. to replace the stocks that were destroyed. Castro seems to use the hurricane as an excuse to begin agricultural trade after realizing that his refusal in 2000 was a tactical mistake. Agricultural trade has continued ever since December of 2001 and the value of total U.S. exports of agricultural products is now approximately $1 billion.

2000 - The Nethercutt Amendment is attached to an agricultural appropriations bill in Congress and becomes known as the Trade Sanctions Reform and Export Enhancement Act (TSREEA), which would allow the cash sale of food and medicine to Cuba, Libya, the Sudan, Iran, and North Korea.

Cuban-American representatives, led by Representative Lincoln Diaz-Balart and backed by Republican leadership introduce a restriction to the bill: while leaving the other four countries alone, U.S. - Cuba travel would be restricted further, along with restrictions to Cuba sales, including prohibiting U.S. government and private bank trade credits. This would force Cuba to go through third party banks that charge additional fees.

Because of election-year politics and a deal cut with Republican leadership,the Nethercutt Amendment passes with the added restrictions to Cuba. Although it is not all that agricultural interests and many Congressmen had hoped for, they see it as a good opportunity for opening up U.S.-Cuba trade and an important political step.

In response, although the Cuban government agrees that agricultural trade would be beneficial to both countries, they view the additional restrictions on Cuba as insulting and discriminatory and refuse any commercial engagement.





Senator Max Baucus reaches an agreement with the Treasury concerning the payment of agricultural goods from Cuba, allowing the Treasury to appoint the six, previously stalled nominees for senior Treasury Department jobs (By Chris Kleponis /Bloomberg News)

Recent News:

Restrictions hurting exports to Cuba, AGWeek (5/4/09)

Push is on the boost U.S.-Cuba agro trade, Miami Herald (4/30/09)

Sanctions curb US farm trade to Cuba by 30 pct, Reuters (4/29/09)

US farmers, ranchers push for greater Cuba access, Miami Herald (4/28/09)

Texas ag chief wants Cuban trade embargo lifted, Miami Herald (4/5/09)

Cuba may welcome back U.S. companies if embargo ends, Bloomberg (4/3/09)

Texas Farm exports to Cuba nearly double, Dallas Morning News (3/26/09)

Cuba's agriculture still mired in problems, official press says, Latin American Herald Tribune (3/22/09)

Executives at Miami conference forecast growing trade with Cuba, South Florida Sun Sentinel (3/21/09)

U.S. rice growers see Obama loosening Cuba embargo, Reuters(3/21/09)

Cuba's smoldering brand wars, CQ Politics (3/7/09)

(Archived News)

Read more about:

[Vinales, Cuba/Seema Kakad]

Organizations working to fight the embargo:

Quaassdorff, Martinez, Taboada, and Dr. Ernesto Medoza, director of Veterinary Science for Havana, compare notes. [Christine Parrish/Village Soup]

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