The U.S. is buying coffee from Cuba, but no cigars.
In the push for free trade with Cuba, Texas has managed to sell rice and other states have sold soybean oil. In turn, we have bought some coffee, but what we really want are those Cuban cigars, John Block, former U.S. secretary of agriculture, said.
Meanwhile, leaders in business and agriculture, including the Waco-based Texas Farm Bureau, have joined forces to create the Engage Cuba Texas State Council, which will push to have travel and trade restrictions abolished with the island country 90 miles from Florida.
"Agricultural exports contribute about 25 percent to the income of farmers and ranchers, so you can see the importance of foreign trade with other countries, including Cuba," said Glen Jones, director of research and policy development for the Texas Farm Bureau.
The goal is to give farmers and manufacturers a multibillion-dollar economic nudge by permitting the sale of products to Cuba, according to a news release.
"Texas is a leading economic driver for the U.S. economy and opening up trade with Cuba would provide tremendous opportunities for businesses across the state," Engage Cuba President James Williams said in a statement on the council's creation recently. "However, Texans are stuck on the sidelines as our foreign competitors continue to take advantage of Cuba's growing markets."
Cuba depends heavily on agricultural imports, which average $2 billion annually, "and this number will continue to grow given the increasing purchasing power of 11 million Cubans," said Jenifer Sarver, a spokeswoman for the Engage Cuba Texas State Council.
"There is also an immediate need for infrastructure improvements to meet the rising demand of foreign travelers. Texas is well-positioned to help meet these and other needs on the island," Sarver said.
"Given the size of Cuba, it won't be huge, but potentially very lucrative," said Waco-based economist Ray Perryman. "Cuba has demands for petroleum and petrochemical products, technology, machinery, food products, professional services and other major Texas exports."
In addition to Texas, Engage Cuba has begun state councils in Georgia, Iowa, Minnesota, Ohio, Tennessee, Arkansas and Louisiana.
"This (50 year) embargo costs the United States $1.2 billion annually," Sarver said. "Removing trade barriers "could mean big opportunities to agriculture in Texas, which produces rice, soybeans, beans and corn, which the Cuban people really need. As more people travel to Cuba, more food will be needed for visitors."
The Engage Cuba coalition is pushing for passage of three pieces of legislation:
- The Agricultural Export Expansion Act of 2015, which has six Texas co-sponsors, would allow American farmers to offer financing to Cuban importers to promote sales.
- The Freedom to Travel to Cuba Act would expand Cuba's already growing markets and provide additional opportunities for U.S. agribusiness to export to Cuba.
- The Cuba Trade Act of 2015 would permit private-sector industries in the United States to export goods and services to Cuba.
"We can't take the trade wall down without legislation," Block said. "The same goes for other trade agreements. We are in the process of negotiating a trade agreement with the European Union. We have just completed an agreement with 11 other countries on the Trans Pacific Partnership. That agreement now needs to be approved by the countries involved.
"Unfortunately, Donald Trump and Hillary Clinton are both dead set against it (TPP). The chance of our Congress passing it before the November election is next to zero. After the election, we shall see. U.S. Trade Ambassador Michael Froman warns that 'if we get an agreement, it's not just what we stand to gain; it's what we stand to lose if we don't get one.' "