Cuban professors, American farmers hope for better U.S and Cuba trade
An untapped agricultural market is waiting just south of the United States, but because of political barriers American farmers rarely do business there.
In the past 50 years, Cuba and the United States have both experienced political shifts, cultural changes and economic downturns. One thing that hasn’t changed is the U.S. embargo of the island country. Both the Illinois Farm Bureau’s Tamara Nelsen and economist Luis Rene Fernandez Tabio of the University of Havana say it’s hurting American farmers.
The Illinois Farm Bureau has opposed the embargo on Cuba for over 20 years. Nelsen, the bureau's senior director of commodities, said that barrier is a deterrent to trade. Nelsen will be traveling to Cuba at the end of the month with a group of more than 20 to explore the potential market there.
Fernandez Tabio visited Southern Illinois University at Edwardsville last week to speak on the same topic. In an effort to bridge the gulf separating the United States and Cuba, he and two other University of Havana professors visited SIUE as part of the university's effort to explore a relationship with the University of Havana. Fernandez Tabio spoke about looking at Cuba as a market for business, despite the existing embargo.
“I don’t want to be a pessimist, but doing business is one of the most difficult things” in Cuba, he said.
There are exceptions to the embargo, but trading with Cuba is usually so complicated it deters both Cuban customers and American providers, Fernandez Tabio said. If sanctions were lifted, U.S. exports to Cuba would bring in $3 billion in revenue, according to a 1999 study by the Center for Strategic International Studies that Fernandez Tabio cited. According to a 2009 report by the IFB, the U.S. is “losing $1.25 billion annually in agricultural exports due to travel and trade restrictions with Cuba.”
While Cuba opposes the embargo, Fernandez Tabio said, "It’s not in our (power) to change” it.
While the Trade Sanctions Reform Act of 2000 did open the door to trade with Cuba, Nelsen said it was barely a crack. It allows the United States to sell agricultural commodities to Cuba, but only when products are paid for in cash transmitted through a third country’s bank.
The government has "helped to loosen, I guess you would say, some of the restrictions so agricultural products can now enter Cuba, but there are still some fairly significant barriers,” she said.
Nelsen said Illinois would directly benefit from open trade routes with Cuba. Each Illinois farmer produces enough food for about 130 people, and the state is always looking for additional markets.
“Every time you add more demand, it’s like you’re finding a new customer for an automobile,” Nelsen said. “You are adding probably a permanent buyer to Illinois soy bean meal, let’s say for example, and that just automatically augments economic activity in Illinois, the tax base, the number of employees, etc. It gives companies great hope to expand. Cuba itself is not a gigantic market right now, but that's because it’s been so closed off.”
The farm bureau developed a policy against most embargos because of the damage it does to trade relationships, Nelsen said.
“It just trashes all of the good relationships that we might already have had with that country in terms of selling them goods or getting products in to feed their people,” she said. “It just opens the door for every other country that might sell that product to come in and that can mean the loss of those markets forever.”
Fernandez Tabio said those barriers work against Americans, as Cubans need imported goods, especially food.
“There is no possibility in the short term to produce all that is necessary,” he said of Cuba. Cuba must import food and other goods, but it’s buying from other countries, leaving its nearest supplier out of the equation.
But Fernandez Tabio believes the Cuban market could still be reclaimed by American farmers. He said he hopes the U.S. and Cuba will improve relations to make a trade network possible.
“This is our desire,” Fernandez Tabio said. “It is only this kind of change (that will) increase understanding and open the door for that possibility.”