Does Cuba matter to Arkansas?

by Melvin Torres (melvint@arwtc.org) 218 views 

During the past few weeks, Cuba has been on most every news outlet and media report in the nation, and for crucial reasons. On June 16, the president of the United States issued a new policy toward Cuba titled “National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba.” We will soon know from the U.S. government the adjustments to the regulations regarding transactions with Cuba. Travel regulations will be more restrictive, the embargo will remain in effect and any efforts to lift it will be opposed as per the new presidential memorandum.

The United States has held an embargo against Cuba for the past 60 years that, among other things, limits trade and financial transactions with the neighboring island. Under the embargo, the sale of agricultural products was permitted. But without lifting the sanctions on credit terms, the neighboring island is unable to afford purchasing agricultural commodities on a full cash basis at the time a container is loaded in the U.S. The new trade policy is harsher in language and limits economic practices that “disproportionally benefits the Cuban government” as per the new presidential memorandum.

Arkansas is the largest producer and exporter of rice in the U.S. and one of the top producers of poultry, grains and meats. Cuba is the largest consumer of rice, poultry and grains in the region. Currently, Cuba purchases rice from Vietnam on a two-year credit term as they cannot purchase Arkansas agricultural products.

This creates the challenge for Cuba to obtain limited amounts of rice through Vietnam, shipped by sea from 10,000 miles away. In contrast, the United States is 103 miles away from Cuba. The proximity, along with the demand for high quality long grain rice, poultry and grains that Arkansas produces, provides farmers and companies in the state with great opportunities to export such commodities to our neighboring island. This opportunity is one of the reasons Gov. Asa Hutchinson accompanied the World Trade Center Arkansas on a trade mission, becoming the first governor to visit Cuba since the normalization of the relations between the two countries. Likewise, there are amendments that Rep. Rick Crawford (R-Jonesboro) and Sen. John Boozman (R-Rogers) have pioneered and proposed, seeking to lift the restrictions of financing agricultural products to Cuba, although these are yet to see a future under the new policy.

Arkansas businesses and farmers have visited Cuba through multiple World Trade Center Arkansas trade missions. For the first time in history, our state had a booth through the World Trade Center Arkansas at the Havana International Fair, promoting Arkansas products from different companies. In addition, the Cuban Embassy visited Arkansas for the first time during April of last year in a historic visit hosted in Northwest Arkansas by the World Trade Center Arkansas. These efforts have created strong bonds between Cuba and Arkansas that have paved the way for cultural, humanitarian, trade and idea exchanges. Through these trade missions and diplomatic visits, Arkansas businesses and farmers have understood from early on the need to trade with Cuba.

Arkansas differentiates itself from other states in that it exports twice as much as it imports from our neighbors in Mexico and Canada. Exports from Arkansas to Mexico are growing 3.6 times faster than exports to any other country, and have increased 700% since NAFTA was introduced. Furthermore, combined exports to both Canada and Mexico have grown by 400% altogether since the NAFTA implementation. This just points to the fact that Arkansas knows how to trade and has a diverse industry base to rely on with its neighbors. Should we expect the same results in Cuba if the embargo was lifted today?

Although uncertain of when, the future of fully normalized relations with Cuba is inevitable. Certainly, Cuba trade matters to Arkansas.

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EDITOR’S NOTE: Melvin Torres is the director of Western Hemisphere Trade at the World Trade Center Arkansas in Rogers. The opinions expressed are those of the author.

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