U.S. Rep. Crawford: Momentum building to remove Cuba trade restrictions

by George Jared (gjared@talkbusiness.net) 204 views 

U.S. Rep. Rick Crawford, R-Ark., has at least 37 cosponsors for House Bill 525 that would remove agricultural trade barriers between Cuba and the U.S.

There could be a $6 billion export market annually from the U.S. to Cuba, Engage Cuba Coalition President James Williams said. Crawford and Williams held a conference call Thursday with business leaders from around the country.

“This is an incredibly important time to talk about this issue … no business would continue a strategy that has failed for 55 years,” Williams said.

Cuba agriculture imports could top $2 billion in the coming years, Williams said. The main impediment for agriculture producers in the U.S. is that the federal government requires all transactions to be cash only. Credit cannot be extended, Crawford said.

Crawford has introduced Bill 525 to Congress to remove this trade barrier. Support for the legislation has steadily grown in recent months. The congressman from Jonesboro said he’s spoken with President Donald Trump’s administration, and he thinks it falls in line with the president’s free trade global strategy. He’s hopeful the president will make a decision sometime this summer, he said previously.

“It’ll be good for the American people, and it will be good for the Cuban people,” he said.

Williams is the president of a non-profit group lobbying Congress to change its Cuban trade policies. Cuba has 394 potential foreign investment projects. It’s the only country in the world the U.S. government has placed travel restrictions on, and as those ease a booming tourism economy will erupt, he said. The island nation, located 90 miles from the southern tip of Florida, also needs massive infrastructure improvements, and that could be a benefit to U.S. construction and engineering firms, he said.

“Cuba is open for business,” he said.

The impact goes beyond economic, Williams said. There are human rights issues and changes to government that will likely come about because of the capitalization of the island, he said. The U.S. needs to be involved in these cultural changes to ensure the two countries have a meaningful and productive future, he said.

American companies are at a disadvantage right now, Williams said. The U.S. has a list of complicated trade restrictions with the country still in place. If an American firm makes a proposal to a Cuban company, and there are competing proposals from firms in other countries such as Russia, Brazil, Germany, or any other, the American firm is often in a weaker position because of the potential for trade restrictions.

A few business leaders on the call had concerns about the Cuban economy. For decades the island-nation has been under the yoke of a U.S. trade embargo that has suffocated the country’s ability to grow its economy. As the travel restrictions lessen, tourist dollars will pour into the country. And, many of the current export opportunities involve agriculture products, wares that are needed and bought no matter the economic outlook.

“People have to eat,” Williams said.

Arkansas could become a lucrative trade partner with Cuba. Rice is the Cubans staple food, and the country has to import nearly 80% of rice consumed, according to the University of Arkansas. The U.S. exports about 60,000 tons per year to Cuba, but that could grow to 350,000 tons if credit restrictions were removed. Cubans consume about almost a million tons annually. Cuba imports most of its rice from China, Vietnam, and Thailand.

Arkansas is the country’s largest rice producer, with 1.3 million acres dedicated to the crop annually. The Natural State produced about 12 billion pounds of rice last year, half the amount produced in the U.S., according to the U.S. Department of Agriculture. Nearly all Arkansas rice is grown in the Mississippi Delta, and Craighead County is among the top rice growing counties in the country with about 70,000 acres.

Prices have plunged in recent years. Arkansas farmers got about $4.25 per bushel in 2016, after projections showed the farmers would get at least $4.50 a bushel. A new market could help raise rice prices, Crawford said. Proximity may also help U.S. rice farmers. The cost to transport rice from Asian countries to the Gulf of Mexico will figure into the overall prices.

Cubans also consume large quantities of poultry, and Arkansas is one of the leading poultry producing states. It isn’t just about how much rice and chicken Arkansas farmers can sell in Cuba. Expanding export markets will lead to better economic conditions on the island, he said. A better economy will lead to a more diversified consumer base, and other products such as beef and pork which are too expensive for many Cubans right now, will become affordable.

Crawford isn’t sure if or when Trump will announce his Cuban trade policies. He’s hopeful the newly elected president will see the opportunities Cuba presents for Arkansas and the rest of the country.

“This is not 1985 … we’re not looking through the lenses of the Cold War,” he said.

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