Talk Business and Politics
Any move by President Donald Trump to rollback a series of executive orders signed by then President Barack Obama lifting trade and travel restrictions with Cuba would be a mistake, according to U.S. Sen. John Boozman, R-Ark., and U.S. Rep. Rick Crawford, R-Jonesboro.
The two members of Congress told Talk Business & Politics any orders making trade and travel more difficult with the communist-controlled island would not be good for Arkansas’ economy.
“I’m concerned. … I think there is conflict in the administration as to what he should do,” Boozman said. “If anything we should be moving forward, not backwards.”
Crawford echoed those sentiments. Arkansas is the leading rice-producing state in the country and the first Congressional district, which Crawford represents, is the leading rice-producing congressional district in the country. Arkansas is also a leader in poultry production. Cuba has a $2 billion agriculture import market, according to estimates, and its top imports are rice and chicken.
A rollback could negatively impact Arkansas farmers, Crawford said. Expanded trade with the country could have a positive impact, he said. Crawford said Trump seems to support free trade, and he hopes that’s true in this case. The president may want to just “retool” the policies enacted by Obama in 2015, he said.
“This is at its core a trade deal,” Crawford said.
Administration officials have remained mum as to what Trump will do. Reports indicate he doesn’t want to close the American embassy on the island. The rollback may involve more politics than economics. Crawford said the president isn’t “telegraphing” his thoughts at this point.
Under current trade policies, agricultural products can only be sold on a cash basis to Cuba. The Agriculture Exports Act, introduced by Crawford in January, would allow agriculture commodities to be bought with credit. Boozman supports a similar bill in the Senate.
State officials are hopeful Arkansas’ farmers will be able to carve out a share of Cuba’s estimated $2 billion agriculture import market. Some estimates indicate the market could grow up to $6 billion as the economy improves on the relatively impoverished nation. Engage Cuba, a non-profit, bipartisan organization has been pushing Cuba trade friendly legislation. There could be 12,000 agriculture-related jobs tied to trade with Cuba, too, Crawford said.
In 2000, Congress passed the Trade Sanctions and Reform Act allowing farmers to sell ag commodities on a cash only basis. Cuba is allowed to export food products to the U.S.
Agriculture expansion could only be the start. Cuba has 394 potential foreign investment projects. It’s the only country in the world the U.S. government has placed travel restrictions on, and as those ease, a booming tourism economy will grow, according to EC. The island, located 90 miles from the southern tip of Florida, also needs massive infrastructure improvements, and that could be a benefit to U.S. construction and engineering firms.
The impact goes beyond economics. Human rights issues and government changes will likely occur because of the capitalization of the island. The U.S. needs to be involved in these cultural changes to ensure the two countries have a meaningful and productive future, according to EC.
American companies are now at a disadvantage, according to EC. The U.S. has a list of complicated trade restrictions with the country still in place. If an American firm makes a proposal to a Cuban company and there are competing proposals from firms in other countries such as Russia, Brazil, Germany, or any other, the American firm is often in a weaker position because of the potential for trade restrictions.
When communist dictator Fidel Castro seized power on the island nation in 1959, many citizens fled to the United States, especially southern Florida. In response, the U.S. enacted tough economic sanctions against the country, stifling its economic growth. Many Cubans who fled supported the sanctions, and tend to vote for Republicans who have remained bullish on the issue.
Trump is expected to be in south Florida at the end of the month, and he could make his decision known then, Crawford said. U.S. Department of Agriculture Secretary Sonny Perdue publicly supports expanded trade with Cuba, and Crawford said he’s discussed the issue with Trump’s national security team.
“I’d love to talk with him about this,” Crawford said. “Lifting (the restrictions) only has upside for us.”
Boozman said there are some who to return to the policies of last six decades, but that approach would be short sighted. Some argue there have been human rights atrocities committed by the Castro regime that cannot be ignored. Boozman noted Trump recently visited Saudi Arabia and has tried to foster a stronger relationship with Middle-Eastern country. Saudi Arabia has committed far worse human rights violations and we’re engaged with them, Boozman said.
“The things we’ve tried for 55 years haven’t worked. … It’s time for a different approach,” he said.