Trade with Cuba

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Let’s Talk About: Trade with Cuba

Illinois Farm Bureau Policy

The Illinois Farm Bureau “aggressively seeks resumption of normal trading relations with Cuba (including elimination of restrictions on U.S. citizens traveling to Cuba and simplifications of licensing and shipping requirements for sales to Cuba).”[i]

Statistics on Cuba

The CIA World Factbook provides the following Cuban demographic data:[ii]

  • Population of 11,047,251 in July 2014 with a growth rate of -0.14%
  • Net migration rate is -3.64 migrant(s) per 1,000 population
  • Life expectancy of 78.22 years
  • The literacy rate of 99.8%
  • Cuba’s export partners are:
    • Canada 16%
    • China 15.2%
    • Venezuela 14.2%
    • Spain 7.5%
    • Netherlands 5.6%
  • Cuba exports petroleum, nickel, medical products, sugar, tobacco, fish, citrus, and coffee
  • Cuba’s import partners are:
    • Venezuela 37.4%
    • China 12.3%
    • Spain 9.4%
    • Brazil 4.7%
    • Canada 4.1%
  • Cuba’s 2014 imports (of all products) were $14.93 billion
  • Cuba imports petroleum, food, machinery and equipment, and chemicals
  • Cuba imported 84% of its food in 2008[iii]

History of Trade with Cuba

Before the Embargo: The history of trade between Cuba and the U.S. extends back to the 1800s. By the late 1800s, the U.S. imported a majority of Cuba’s sugar, tobacco, cacao, coffee, tropical fruits, and nuts. The U.S. exported cereals, meats, manufactured goods, condensed milk, vegetable oils, cheese and fuel to Cuba.[iv] Even before the embargo was in place, previous trade Amendments such as the Teller Amendment harmed trade relations between the two nations. The 1898 Teller Amendment prohibited U.S. annexation of Cuba. Congress passed the amendment to protect US sugar beet farmers from competition. The 1899 Foraker Act disallowed US investment in Cuban tobacco plantations.[v] In 1922, 84% of U.S. grapefruit imports were from Cuba.[vi] Sugar and molasses were top imports from Cuba to the U.S. as well.

After the Embargo: All trade between the United States and Cuba ceased with the embargo of 1962. Disparities between the United States style of government and the newly formed Cuban Communist regime led to the embargo.[vii] The Helms-Burton Act strengthened the embargo in 1996. The Act penalized foreign companies doing business with Cuba and stated sanctions would only be lifted under certain conditions. The removal of the Castros’ power fell within the specified conditions.[viii] In 2000, the Trade Sanctions Reform and Export Enhancement Act passed, allowing humanitarian trade with Cuba. Cuba rapidly rose to become one of the U.S. top 30 agricultural export markets.[ix]

“Cuba spends about $1.6 billion annually on food imports; one-third comes from the U.S.”[x] Currently, Cuba’s top imports are wheat, soybeans, chicken, corn and rice.[xi] Cash-in-advance or financing by a non-U.S./non-Cuban institution are the only options for U.S. goods Cuba wishes to import. With cash in advance payment, sellers must receive payment before the goods are transferred.[xii]

Benefits for the United States

Cuban negotiators are reasonable when product quality problems are negotiated. There are no corruption issues with Cubans like bribes or kickbacks. Additionally Cuba’s GMO protocols are reasonable and based on sound science.[xiii] Many agriculture professionals including Illinois Farm Bureau, believe lifting the embargo would have many positive results.

A vocal group pushing for the removal of the embargo, Louisiana rice farmers, list many benefits of trade with Cuba. Cuba imports 60-80% of its rice and was the U.S. top customer prior to the embargo. The port of New Orleans would also benefit from increased shipping if the embargo were lifted;[xiv] 6,000 additional jobs would be created and the U.S. would gain between $1.2 and $4.84 billion a year.[xv]

Cuba currently imports 900,000 tons of corn annually. Cuba has imported as little as 15% of its corn from the U.S. but does import 100% of its distiller’s grains from the U.S. Cuba does not purchase US wheat but could import 500,000 tons annually as Cuba does not commercially produce wheat.[xvi]

In the past several years, Cuba has become concerned with the quality of imports. As the economy stabilized, contracts have shifted from specifying lower-priced, second-grade products to higher priced, first-grade products.[xvii]

Cuba’s concern about quality as the importance of tourism has grown. Tourism has become increasingly import to the Cuban economy particularly with the decline of support from the former Soviet Union. More than 2 million tourists visited Cuba in 2006 making it the fifth most important Latin American tourist destination. Tourism brought in $2.4 billion for the Cuban economy.[xviii] Because of tourism Cuba’s demand for imported condiments, snack foods, processed foods, bottled water, beef, wine and spirits has increased. The increase in Cuban tourism, and subsequent demand for luxury items for tourists has the potential to add $366 million annually in U.S. exports.[xix]

Benefits for Illinois

Illinois ranks 6th in the nation for lost opportunities to its agriculture sector due to the embargo.

Illinois Farm Bureau took a study tour to Cuba in June 2012. While in Cuba the Farmers saw opportunities for Illinois livestock, dairy, equipment, technology, inputs and wheat exports.



[i] Illinois Farm Bureau. (2015) Trade. Policy Resolutions. (pp.63). Bloomington, IL.

[ii] The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013. Web. 18 June 2015.

[iii] Office of Global Analysis, FAS, USDA. “Cuba’s Food & Agriculture Situation Report.” March 2008. Web. 18 June 2015.

[iv] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[v] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[vi] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[vii] John F. Kennedy: "Proclamation 3447 - Embargo on All Trade with Cuba," February 3, 1962. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=58824

[viii] “Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996.” (PL 104-114, March 12, 1996). Text from: http://www.treasury.gov/ . Accessed 10 June 2015.

[ix] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[x] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[xi] Copeland, Cassandra, Jolly, Curtis & Thompson, Henry. “The History and Potential of Trade between Cuba and the US.” Journal of Economics and Business, 2011. Web. 11 June 2015.

[xii] “General Payment Guidelines For TRSA-Authorized Transactions with Cuba”. U.S.-Cuba Trade and Economic Council, Inc. www.cubatrade.org . 11 June 2015.

[xiii] Office of Global Analysis, FAS, USDA. “Cuba’s Food & Agriculture Situation Report.” March 2008. Web. 18 June 2015.

[xiv] Normura, Andrew. “Rice farmers push Congress to lift Cuba embargo”. WAFB. 03 June 2015. wnem.com . Web. 10 June 2015.

[xv] Williams, Shaun. “The Cuban Embargo Has Failed and is Holding America Back”. Rise: Miami News. 2 June 2015. Risemiaminews.com . Web. 10 June 2015.

[xvi] “US grain exports to Cuba could rise ‘dramatically’.” Agrimoney.com. 22 Dec 2014. Web. 18 June 2015.

[xvii] Office of Global Analysis, FAS, USDA. “Cuba’s Food & Agriculture Situation Report.” March 2008. Web. 18 June 2015.

[xviii] Office of Global Analysis, FAS, USDA. “Cuba’s Food & Agriculture Situation Report.” March 2008. Web. 18 June 2015.

[xix] Fannin, Blair. “Expert: U.S. agricultural trade to Cuba could exceed $1 billion.” AgriLife Today.23 April 2015. Web. 18 June 2015.

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