Senate Finance Chairman Max Baucus along with other legislators introduced a bill in June to reform various elements on the Cuban embargo: Promoting American Agriculture and Medical Exports to Cuba Act of 2007 (S. 1673) .
The bill would:
- clarify the payment terms under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA) and authorize direct transactions between U.S. and Cuban banks [the TSREEA provided opportunities for U.S. agricultural exports to Cuba. Following passage of the legislation, these rose to over $300 million a year. However, as discussed below, the interpretation of regulations on payment for agricultural products acts to restrict additional exports]
- establish an agricultural export promotion program to support U.S. firms seeking to market to Cuba
- express the sense of Congress that visas should be issued to Cubans traveling to the U.S. on business related to agricultural exports
- repeal a prohibition on enforcement of rights to certain U.S. intellectual properties and transfer of such properties (I'm not clear about what's intended here)
- liberalize restrictions on travel by U.S. citizens to Cuba
- liberalize restrictions on export of medicines to Cuba
- increase in airport tax for travel to Cuba by one dollar?
Note that the bill only provides for limited relaxation of the embargo. Much of it would remain in place.
The Finance Committee held a hearing on the bill December 11. Five persons testified. Some spoke in favor of the embargo, and some spoke against; only one, David McClure of the Montana Farm Bureau Federation, really spoke specifically about the legislation in a way that helped with the interpretation of its elements. McClure dealt with the agricultural elements of the bill, not tourism or medical exports:
As you all know, until passage of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) in 2000, the Cuban market had been closed to U.S. agricultural exports since 1963. Since passage of TSREEA, U.S. agriculture has seen its sales to Cuba grow. According to USDA/FAS our sales have gone from nearly zero in 2000 to almost $367 million in 2007.... [The International Trade Commission (ITC) released a report on the TSREEA in July 2007 - I posted on it here: The Fading U.S. Embargo on Exports to Cuba, "fading" This report had been requested by the Senate Finance Committee in March 2007 - Ben]
We were told that currently Cuba’s tourism industry entertains two million people per year. As this expands, Cuba’s demand for high end food products for their hotel industry needs to service its customers will expand. This is a great opportunity for US producers. [the ITC had studied the impact of increased U.S.tourism on U.S. food exports to Cuba - Ben]
Reform of Restrictions
Reforming current finance restrictions for U.S. agricultural exports to Cuba is a good starting point toward better trade relations. U.S. law currently prohibits U.S. agricultural exporters to Cuba from using U.S. banks or financial institutions to execute the sale. This prohibition affects the overall export transaction by 1) adding additional banking fees; 2) increasing the difficulty of completing sales; 3) giving an edge to competing foreign suppliers; 4) taking business away from the U.S. economy; and 5) disproportionately disadvantaging smaller exporters who may not have international banking relationships.
Third country financing restrictions on agricultural export sales prevent U.S. agricultural exporters from developing normal commercial relations with Cuba and are contrary to the spirit of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA). We support repeal of this provision of U.S. law.
On February 22, 2005, OFAC announced that it was redefining “payment of cash in advance.” Under the new definition, cash payments from Cuba for U.S. agricultural sales would have to be received by U.S. banks before the product could be shipped from U.S. ports. This new definition is significant in that “payment of cash in advance” is the most commonly used means for established method for sales to Cuba.
Most contracts made with the Cuban government for the purchase of U.S. agricultural products have used “payment of cash in advance” as the method of payment. Under its original interpretation, U.S. agricultural products could be shipped to Cuba but all certificates, title and ownership of the goods would only be transferred once payment was received from Cuba. OFAC’s new regulation ignores the original intent of Congress on “payment of cash in advance” under TSREEA. This has resulted in the loss of sales putting U.S. agriculture in the position of being viewed as an unreliable supplier.
Licensing of Export Sales to Cuba and other Previously Sanctioned Nations
Delays have been experienced with the issuance of licenses authorizing agricultural export sales to Cuba under the implementing regulations for TSREEA. In some cases, up to 45 days elapsed before the requested license was issued. Such delays significantly impact our ability to transact commercial sales with these countries. In many cases, the export sale is lost to our competitors. In addition, the procedures under which these licenses are issued lack transparency and an approved systematic process. Short term efforts should be undertaken to streamline the process to 24 hours or less in cases where licenses have previously been issued for sales to the same end users. Shortening the process to just one day, where possible, is necessary in order for U.S. exporters to compete with their foreign counterparts. Long term legislation should be passed to repeal the licensing provisions now mandated under TSREEA.
Denial of visas
Visa requests authorizing planned meetings between U.S. agricultural representatives and Cuban officials to review U.S. standards and procedures in conjunction with contracted and potential agricultural sales to Cuba have been subsequently denied without just cause.
The purpose of this denied Cuban visit included important meetings for Cuban officials to confer with U.S. suppliers, inspect facilities, discuss sanitary and phytosanitary issues and verify U.S. procedures and standards associated with the sale of U.S. food and agricultural exports to Cuba. Visits of this type are routinely conducted by officials and importers that sell to the United States. It is a customary practice for foreign purchasing agents and government technical teams to travel to the U.S. to meet with U.S. suppliers and tour facilities. Denial of the visas associated with these commercial visits from Cuban officials was contrary to how we do business with any other country.
Farm Bill Amendment
We are aware of a possible amendment to the current Farm Bill debate in the Senate addressing the above issues sponsored by Chairman Baucus. This amendment is important for opening the Cuban market to U.S. agriculture further. If brought to the floor we would encourage all members of the Senate to support its inclusion in the Senate Farm Bill.
STRAIGHT TALKING
On Ending Global Warming
February- March Letter 10
Allan Yeomans Australia
Author of PRIORITY ONE Together We Can Beat Global Warming
CUBAN TRADE EMBARGO.
BIG-OIL and GLOBAL WARMING
The United States trades with Communist China, so why not Cuba? There is a sick but logical answer. Sherlock Holmes said “first look for he who will benefit”, or “Cui Bono” which is another way of saying the same thing.
Cuba’s main business is growing sugarcane. Using sugar is the cheapest and most practical way to produce ethanol. Every year from an acre of sugarcane you can produce 750 gallons of ready-to-use ethanol. (And it can be done organically.)
If Cuba was allowed to trade freely with the US it could supply ethanol to US motorists at half the price you now pay for gasoline.
When you look at the figures for Cuba you find that 75% of Cuba is sugar cane country. That’s like a paddock one hundred and seventy miles square. It would produce enough to continuously run 30 million cars on straight ethanol. Or 35 million cars on E85, which a lot of modern American cars are designed for.
It is thus very logical for the oil conglomerates and the Middle East oil states to insist, and demand, and to connive, to insure that the Cuban Embargo continues indefinitely.
Other things have also been “arranged” that suit the oil companies. There is a 2.5% duty on imported oil and imported ethanol into the US. So on face value that seems fair but, (and it’s a big “but”) if you import ethanol you pay an additional 54 cents duty on every gallon imported.
With sugarcane ethanol you harvest the sap . With grain ethanol you harvest the nutritious seeds. So sugarcane is the logical choice.
Corn farmers and the oil conglomerates in the US are now subsidized to produce and blend ethanol from corn. The costs have been astronomical and the impact is that just a tiny 1.5% of US fuel is derived from corn farming. Coincidently, the oil industries’ corn ethanol subsidies appear more than sufficient to offset the 1.5% loss in oil sales revenues.
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WHAT TO DO ? First eliminate the 54 cents penalty on imported ethanol from anywhere in the World. Secondly, eliminate the trade embargo on Cuba - at least on sugar and ethanol. And lastly, because it would be political impossible to cancel; maintain the corn subsidies to American farmers.
[For general comments by Allan Yeomans, See en.allexperts.com/q/Global-warming-Climate-3851/ - 23k ( “allexperts” is part of The New York Times)].
If you like and agree with the above then email this to a dozen friends.
Or better still, to everybody in your address book.
Or if you prefer send me the email addresses of everybody you feel should receive copies and I will send them direct.
Email me, Allan Yeomans at aj@yeomansplow.com.au or phone me at 61 (Australia) then area code 7 then 55923017. Time wise I’m about seven hours behind your US time. Our URL is www.yeomansconcepts.com.au.
Posted by: Allan Yeomans | March 17, 2008 at 12:48 PM