U.S. businesses are pushing to entirely lift an embargo on Cuba and win a larger share of its imports in the wake of President Barack Obama’s move to ease sanctions against the island nation.
The Caribbean country imports 80 percent of its food, a market valued at $1.7 billion. The United States lags behind Venezuela, China, Spain and Brazil in goods imported to Cuba, which is just 90 miles from the U.S. coast.
At one point, U.S. growers supplied about 30 percent of Cuba’s now $300 million annual rice market. A rule change in 2008 that forced payment on order, rather than on receipt, pushed U.S. producers out of the market. Total U.S. exports of all goods to Cuba in the first 11 months of 2014 were just $273 million.
Devry Boughner Vorwerk, chair of the newly launched U.S. Agriculture Commission for Cuba and vice president at Cargill, the largest privately owned U.S. food processor, said there is an opening to shape Obama’s rules as they simultaneously press Congress to lift the more than 50-year U.S. embargo.
“We’ve already come together and ... are working on some solid recommendations,” Vorwerk said at a coalition launch event.
The coalition represents nearly 30 food companies and industry groups. A bipartisan group of lawmakers spoke, though opposition to the president’s plan is expected from some Republicans in Congress.
Obama announced on Dec. 17 he would direct his administration to allow U.S. companies to sell agricultural and building materials, equipment used by private-sector entrepreneurs and telecommunications services in Cuba.
Among the changes Obama instructed the U.S. Departments of Treasury and Commerce to make was to tweak the definition of “cash in advance” to ease agricultural exports such as rice.
Companies still face barriers. Cuba has its own restrictions on telecommunications networks and financing trade between the two countries will likely remain difficult because U.S. exporters cannot extend credit. Still, many hailed the president’s move as an important first step.
Jodi Bond, vice president of the Americas at the U.S. Chamber of Commerce, called the president’s announcement “small but significant,” particularly for the agricultural and construction industries.
Agricultural and construction equipment manufacturers could also see increased opportunities in Cuba.
Caterpillar Chief Executive Officer Doug Oberhelman told CNBC he was “excited” about the opportunities for the construction and mining equipment manufacturer in Cuba after the announcement, which “was long overdue, frankly.” (Reuters)
This Article Is Archived For Top Tier Subscribers Only
View the full archived article by Logging in!
Log In