Arkansas may have new ally in opening trade relations with Cuba

Arkansas could benefit economically if trade relations with Cuba are expanded, and several state political leaders including U.S. Sen. John Boozman, U.S. Rep. Rick Crawford, and Gov. Asa Hutchinson have pushed hard with President Donald Trump to make changes in the relationship. The Natural State may have found a voice within the administration to help the cause.

Under current trade policies, agricultural products can only be sold on a cash basis to Cuba. The Agriculture Exports Act, introduced by Crawford in January, would allow agriculture commodities to be bought with credit. Boozman supports a similar bill in the Senate. U.S. Agriculture Secretary Sonny Perdue said during a House Agriculture meeting on Thursday that he supports the measure.

“I think it’s something I would be supportive of if folks around the world need private credit to buy our products, and I’m for that,” he said.

Perdue, the former governor of Georgia, has stated in the past he supports open trade with Cuba. Arkansas is the leading rice producer in the country and one of the leading poultry producers, the two largest commodities bought on the world trade markets by Cuba. State officials are hopeful Arkansas’ farmers will be able to carve out a share of Cuba’s estimated $2 billion agriculture import market. Some estimates indicate the market could grow up to $6 billion as the economy improves on the relatively impoverished nation. Engage Cuba, a non-profit, bipartisan organization has been pushing Cuba trade friendly legislation, President James Williams said.

“Having traveled to Cuba as governor of Georgia, Secretary Perdue knows firsthand the significant opportunities for U.S. farmers in emerging markets there,” Williams said. “Commodity prices are dropping. Farmers across the country are struggling. At the same time, our island neighbor is importing $2 billion of ag products a year from our foreign competitors.”

In 2000, Congress passed the Trade Sanctions and Reform Act allowing farmers to sell ag commodities on a cash only basis. Cuba is allowed to export food products to the U.S.

Agriculture expansion could only be the start. 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, Williams 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.

The impact goes beyond an economic one. Human rights issues and government changes will likely occur because of the capitalization of the island. The U.S. needs to be involved in these cultural changes to ensure the two countries have a meaningful and productive future, Williams said.

American companies are at a disadvantage right now, he noted. 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.

Crawford has met with Trump administration officials and he thinks the president will be responsive to opening these markets, he said. Crawford previously told Talk Business & Politics he thinks the administration will revise its Cuba trade policy sometime later this year.