Cuba trade diplomat urges normalized trade relations
Cuba’s top diplomat in the United States on Tuesday urged attendees at an agricultural conference in Richmond to support normalized trade relations between the U.S. and the island nation.
José Ramón Cabañas, the chief of the Cuban Interests Section in Washington, said restrictive U.S. policies on export financing terms are one major impediment to Virginia businesses selling goods in Cuba.
Virginia is struggling to sustain a small export market for its agricultural products in Cuba, a market that was developed in the mid-2000s despite a decades-old U.S. embargo on the country.
Virginia is “very well-positioned for that moment when we have changes” in trade relations, Cabañas said during the Governor’s Conference on Agricultural Trade held at the Richmond Marriott hotel downtown.
Virginia’s agriculture industry made some inroads into the Cuban market under regulations set out by the Trade Sanctions Reform and Export Enhancement Act of 2000. The federal act authorized the sale of agricultural commodities, medicine and medical devices directly from the U.S. to Cuba.
“We have forged a very good working relationship, as we have tried to promote more trade between the commonwealth of Virginia and Cuba,” said Todd Haymore, Virginia’s secretary of agriculture and forestry.
From 2003 through 2012, Virginia producers sold products including soybeans, pork, poultry and apples to Cuba. The value of exports from Virginia to Cuba peaked in 2012 at $65.6 million, state officials said.
Since 2012, however, those exports have been falling, and amounted to $24.9 million, in 2014, entirely from the sale of soybeans.
That was only a tiny portion of Virginia’s total farm and forestry exports to international markets in 2014, which reached a record of $3.35 billion.
Exports of apples and poultry to Cuba also dried up in 2014, though state agriculture officials said they are working along with apple producers to re-establish some sales.
While the 2000 federal act made some exports to Cuba possible, Cabañas and Haymore both pointed to restrictive trade policies as the major reason for difficulties maintaining a market in Cuba.
Under federal regulations, for instance, agricultural products may be exported to Cuba only if they are paid for with cash in advance or through a letter of credit from a financial institution in another nation.
“If those regulations were changed, you would see a dramatic change in the (trade) figures,” Cabañas said in an interview. “We are close. We know your products.”
Haymore said Cuba has started to source more products from South America, where it can get less onerous financing terms. There is speculation, he said, that one reason for the decline in Virginia’s apple shipments to Cuba is that Canadian apple exporters are able to provide better financing terms.
“A bank here in Virginia that represents agribusiness or a producer group can’t deal directly with a financial institution in Cuba,” Haymore said. “There has to be a third party, typically in Europe, and that adds unnecessary costs.”
“So financing and the elimination of third-party banking — those two things alone we believe would change the dynamics so that they (Cuba) could have the ability to source more” from Virginia, he said.
Haymore introduced Cabañas at the conference Tuesday. Hundreds of farmers, government officials and representatives of agribusiness companies, financial institutions and universities attended the meeting.
Beyond agriculture, Cabañas said he sees potential for Cuba to engage commercially with the U.S. in other industries, such as telecommunications, biotechnology and health care.
Cabañas said Cuba has demonstrated its capacity to buy U.S. products on credit.
“We bought $5 billion in commodities from U.S. producers in 10 years, paying in cash,” he said. “That has been demonstrated. We don’t need to show that again.”
(From: Richmond Times-Dispatch)
