CUBA ANOTHER STEP CLOSER TO A FULL TRADE PARTNER

Tricia Braid

Apr, 15, 2015  |  Today's News

President Obama and the U.S. Department of State have recommended that Cuba be removed from the list of state sponsors of terrorism. The classification as such has been a hurdle in our countries’ relations and development toward a more open trading system. Cuba is a potential market for Illinois corn and other agricultural commodities. We are now losing the limited market share we have to competitors in South America. To fully realize this trading opportunity that is less than 100 miles off the U.S. shore, IL Corn supports the full removal of trade barriers with Cuba.

•        Ending the embargo would continue the tremendous momentum of U.S. agricultural exports, which topped $152 billion in 2014 and set a new record.

•        Ending the embargo would represent a positive development for the Cuban people, and would provide an opportunity for American agriculture to help boost Cuba’s economy and agricultural production capacity.

•        Illinois has been a leader in improving trade relations with Cuba. In 1999 Illinois was the first state to have a sitting Governor lead a delegation to Cuba since the 1959 Revolution. In 2013 the Illinois General Assembly passed a unanimous resolution calling for the end to the embargo, improved trade relations with Cuba and the creation of an Illinois-Cuba working group.  Resolution: http://www.illinoiscuba.org/files/documents/Resolution.pdf

•        It is estimated that at least 20% of Cuba’s corn and soy imports originate from Illinois due to the state’s abundance of those crops and access to rivers and railroads.

•        The U.S. is losing corn and soy market share in Cuba to our competitors from South America due to the embargo restrictions making us less competitive.  U.S. corn and soy exporters are prohibited from offering standard credit terms.  The United States is also unable to receive backhauls from Cuba, making one-way freight very expensive.

•        U.S. corn and soy exports to Cuba peaked in 2008 at $331 million.  Approximately $66 million of that is estimated to have originated from Illinois.  Since then U.S. corn and soy exports dropped to approximately $120 million in 2014, with Illinois’ share being approximately $24 million.

•        In a post embargo situation, Illinois corn and soy exports could go back to 2008 levels and beyond, especially considering the likely boost from tourism and a recovering Cuban economy.