Louisiana poised to capture share of Cuban market if embargo lifted, agriculture and business leaders say

Greater Baton Rouge Business Report

By: Alexandria Burris

Louisiana is poised to benefit greatly by trade with Cuba, supplying commodities such as rice, if the United States lifts the long-standing embargo against the island nation, Louisiana’s business and agricultural leaders said today.

But before the embargo can be lifted, other obstacles, such as Cuban reparations to American families and U.S.-based companies whose land the country’s government seized, must be addressed, they said.

The leaders relayed their concerns during a briefing held today with Mike Strain, the state’s commissioner of Agriculture and Forestry, and Michael Scuse, the U.S. Department of Agriculture’s undersecretary for farm and foreign agricultural service.

Strain and others present at the briefing spoke of the tremendous opportunity Cuba presents for Louisiana’s agriculture sector.

“If you look at the commodities that we have readily available to us—rice, wheat, poultry, manufacturing, machinery equipment, lubricants—the country needs everything and we’re in a great place to do that,” Strain said.  

But Michael Olivier, chief executive officer of the Committee of 100 for Economic Development, said complications were placed on the state by the U.S. Department of Treasury’s Office of Foreign Assets Control, which enforces economic trade sanctions, and the costs associated with regulatory issues.

The Cuban market can be assessed now, but the incremental obstructions persist, Olivier said.

President Barack Obama began working to reinstate diplomatic ties with Cuba in 2014. Last year, embassies in both nations reopened. And this year U.S. businesses have intensified their efforts to get the federal government and Congress to open up trade opportunities that would allow them to sell their commodities to Cuba.

Engage Cuba, a coalition aiming to end the U.S. trade embargo, formed a Louisiana State Council last month to help galvanize support for the lifting of U.S. trade and travel restrictions to Cuba.

Louisiana is sitting in the perfect position to capture some of Cuba’s market share because of the variety of products coming out of the Gulf Coast, Scuse said. Agricultural and business leaders said tourism is expected to grow there with cruise lines such as Royal Caribbean looking into the island as a new travel destination.

Scuse said the president has done what he could do to normalize relations and will travel to Cuba later this month.

The proposed federal budget for fiscal year 2017 contains a request for the USDA to staff an office in Cuba, he said. But in order for credit to be extended for agricultural products, changes to legislation must be made, Scuse said. He maintains that additional access to the island nation’s economy is going to have to come from Congress.

“We need some of the walls that have been put in place in the ’60s to be repealed,” he said.

Agricultural sales in Cuba are estimated to be about $1.8 billion with the U.S. only receiving a small fraction of that, he said.

“Up to 2008, U.S. sales were climbing in Cuba. As a result of that, the European Union flocked to Cuba with marketing promotion programs and to extend credit,” Scuse said. “Our sales have plummeted since that time.”

The U.S. needs to have the ability to compete on a level playing, Scuse said.

“We know that there’s tremendous potential down there,” he said.