ITC: Big jump for U.S. ag sales to Cuba, if trade restrictions lifted
The U.S. International Trade Commission concluded in a report that the United States could provide more than half of Cuba's agricultural, fish and forest product imports if certain U.S. trade and travel restrictions to Cuba were lifted.
The ITC forecasted that the U.S. share of Cuba's agricultural product imports would rise from one-third to between one-half and two-thirds if the restrictions were lifted.
In 2000-2001, U.S. agricultural exports to Cuba were negligible. However, these volumes grew rapidly and by 2004 the United States was Cuba's largest supplier. Although the value of U.S. exports has fallen since then, the United States still supplies more agriculture products to Cuba than any other country, accounting for about 30 percent of Cuban imports in 2006.
One of the biggest U.S. trade restrictions with Cuba is the requirement that the Cuban government pay for U.S. agricultural products in cash or through letters of credit drawn on third-country banks, which raises the cost of U.S. goods for Cubans, the ITC report said.
Other factors that increase costs are:
* Port delays.
* High transport charges owing to limited shipping routes.
* Foreign exchange transactions, exacerbated by the need for third-country financing.
* The uncertainty of visas for Cuban officials to inspect U.S. agricultural production facilities.
If these restrictions were lifted, U.S. agricultural shippers to experience the biggest boost in the Cuban trade would be fresh fruits and vegetables, including potatoes, milk powder, processed foods, and certain meats (poultry, beef and pork).
The ITC report, U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions (Investigation No. 332-489, ITC Publication 3932, July 2007) will be available on the agency's Internet site at http://hotdocs.usitc.gov/docs/pubs/332/pub3932.pdf .
ITC: Big jump for U.S. ag sales to Cuba, if trade restrictions lifted
