U.S. Senator Dick Durbin (D-IL), joined by Ben Barron with the State Department’s Bureau of Economic and Business Affairs and Alexis Taylor with Foreign Agricultural Services at the U.S. Department of Agriculture, met with local agricultural leaders this week to discuss changes made by the Obama administration between the U.S. and Cuba and the potential benefits of lifting the Cuban trade embargo. Since President Obama’s announcement late last year on the normalization of relations with Cuba, Durbin has cosponsored several pieces of legislation that would further open up relations, trade, and travel between the two nations. Illinois Corn Growers Association District 8 Director Ted Mottaz joined the discussion with Durbin and others.
It is expected 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 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 about $24. While Cuba currently imports 80 percent of its food, Illinois exports to Cuba are often underestimated because they travel through coastal ports. 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. Illinois could gain a total $10.9 million in additional business activity if the Cuban market opens up.
Earlier this year, Durbin joined a bipartisan group of Senators to introduce the Freedom to Export to Cuba Act, which would eliminate the legal barriers to Americans doing business in Cuba, repealing the 1961 authorization for establishing the trade embargo and amending subsequent laws and restrictive statutes. The bill would pave the way for new economic opportunities for American businesses and farmers by boosting U.S. exports and allow Cubans greater access to American goods.
“After more than 50 years of hostility and alienation, we can take this window of opportunity with our neighbor that lies 90 miles from our coast to work through real and serious differences, recognizing that the exchange of ideas, people, and goods can have a far greater and more positive impact than the failed policy of isolation,” Durbin said. “Illinois farmers are ideally positioned to increase our engagement with Cuba and help increase their sales at the same time.”
This past December, after years of negotiations, President Obama announced historic changes in U.S. policies toward Cuba, involving easing restrictions on Americans traveling to Cuba, and on some U.S. companies hoping to do business in Cuba. Last month, the United States and Cuba took another historic step forward by restoring full diplomatic relations between the two nations.
U.S. companies are already allowed to export some food to Cuba. Last year, those imports amounted to $265 million – some of which originate in Illinois. U.S. Agriculture Secretary Tom Vilsack estimates that the policy announced by President Obama will create a $1.7 billion opportunity for U.S. farmers and agriculture companies.
While Cuba currently imports 80 percent of its food, Illinois exports to Cuba are often underestimated because they travel through coastal ports. According to Illinois Cuba Working Group estimates, Illinois exports to Cuba peaked at approximately $66 million in 2008 which is 20 percent of their U.S. corn and soy purchases. 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. Illinois could gain a total $10.9 million in additional business activity if the Cuban market opens up.
Durbin has been a long time champion for changing U.S. policy to Cuba, arguing that decades of isolation have failed to reform the island’s repressive regime and hurt broader U.S. interests in the region. In January, he participated in the first congressional delegation visit to Cuba since the United States announced its change of policy. Along with the Freedom to Export to Cuba Act, Durbin is also cosponsoring the Freedom to Travel to Cuba Act which would end restrictions on travel by American to Cuba, the Cuba Digital and Telecommunications Advancement Act which would enable U.S. telecommunications and Internet companies to provide their services and devices in Cuba, and the Agriculture Export Expansion Act which could allow for private financing of agricultural exports to Cuba.
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