Larger U.S. food and ag exports to Cuba are not assured despite President Obama’s decision to normalize diplomatic relations and take steps to facilitate the sales, which must be made on the basis of cash in advance, say USDA economists. The headline, “A complicated relationship,” summarizes their view. More trade depends in part on action by Cuba to foster economic growth. Access to credit or the chance to earn foreign exchange will govern the volume of goods that Cuba’s state-owned food importer can buy. “Actions that might stimulate U.S. agricultural exports to Cuba include a loosening of restrictions on private-sector credit for Cuban purchases of U.S. agricultural products and allowing Cuba to export products (agricultural and nonagricultural) to the United States, which would enable Cuba to accumulate the foreign exchange needed to import more,” says the Economic Research Service report.
“Over the long term, fostering growth in U.S.-Cuba agricultural trade hinges on building a foundation for a two-way relationship in trade and investment and then creating the trust to sustain that relationship. For agricultural trade, that foundation does not yet exist,” says the ERS report.
“A more normal agricultural trading relationship” with Cuba “might feature a much larger level of U.S. agricultural exports,” including the bulk commodities now sold “and perhaps even intermediate and consumer-oriented commodities,” said ERS. For example, Cuba has a similar population and per-capita income as the Dominican Republic. U.S. ag exports to that country amounted to 45 percent of the market and averaged $1.15 billion from 2012-14, compared to a 20-percent market share in Cuba and average sales of $365 million in the same period.
Cuban exports to the United States eventually could include fruits, vegetables, tropical plants and cut flowers. Sugar is a major export at present “but it is not known whether future U.S. policy would allow for significant imports from Cuba.”
While the White House took the first steps on Cuba, “only Congress can lift the [trade] embargo that still prevents nearly all financial and trade relations and severely limits even the few permitted exports,” says the Washington Post. “Yet despite a series of hearings, conferences, concerted lobbying and a stream of trade delegations to Cuba from both Republican and Democratic states this year, the embargo remains firmly in place, with little promise of early action.”