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New U.S. rules needed if Cuba is to buy farm goods

New U.S. rules needed if Cuba is to buy farm goods
Cuba has bought animal feed, poultry from the United States previously
Published on: Oct 2, 2015

Cuba could be an important buyer of U.S. farm goods, particularly
poultry meat and animal feeds, but changes are needed in Washington to
allow the island nation to get credit to make such purchases.

“They are not buying from the United States anymore. They can’t get
credit, they pay cash and they are getting generous offers of credit
from a number of other countries,” William Messina, agricultural
economist at the University of Florida who has studied Cuba trade
issues, told Farm Futures. “The biggest thing is they have cash flow
issues, so importing on credit is very important to them.”

The recent restoration of diplomatic relations under the Obama
Administration may not produce a windfall in trade with Cuba until trade
policies are changed in Washington, he said.

U.S. credit has been denied since passage in 2000 of the Trade Sanctions
Reform and Export Enhancement Act, he said. The act allows for the trade
of agriculture goods and medicine but on a cash basis.

While there have be some efforts in Congress to loosen those credit
restrictions, Messina doubts there will be any movement until after the
Presidential election in November 2016.

“Then the question is who gets elected. Some of the candidates want to
reverse the opening of diplomatic relations,” said Messina, speaking on
the sidelines of the Oilseed and Grain Trade Summit in Minneapolis.

Cuba’s buying of U.S. animal feed ingredients and poultry slowed after
2008 as other countries offered credit that allowed for delayed payments.

Cuba’s proximity to the United States offers obvious shipping
advantages, but the credit terms offered by other trading partners has
offset those advantages. Messina said shippers have told him that
lifting the trade barriers could save Cuba about $5 million a year in
shipping costs.

Source: New U.S. rules needed if Cuba is to buy farm goods – Farm
Futures –
http://farmfutures.com/story-new-rules-needed-cuba-buy-farm-goods-0-132657

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