WASHINGTON — Eliminating U.S. trade and travel restrictions on Cuba could double U.S. agricultural exports to the island, according to a new government report that's sure to add fuel to the debate over U.S. sanctions on Cuba.
The study estimated that the restrictions cost the United States between $176 million and $350 million annually in lost agriculture exports to Cuba.
It cautioned, however, that such projections are uncertain because of "data limitations and the non-market aspects of Cuban purchasing decisions."
The added sales would come on top of the $338 million in U.S. agro-exports to Cuba in 2006.
The report by the U.S. International Trade Commission (ITC), an independent agency that specializes in trade matters, is one of the most complete of its kind to date. Nine of its investigators pored over data and conducted scores of interviews, including some in Cuba.
The report estimates that lifting travel restrictions would mean between 554,000 and 1.1 million U.S. residents would travel to Cuba annually, compared with the 171,000 who did so in 2005, most of them Cuban-Americans. Some of these visitors would displace other travelers, so the net gain for Cuba would be between 226,000 and 538,000. Cuba receives more than 2 million visitors a year.
Opponents of U.S. policy on Cuba seized on the 180-page report's conclusions to argue that 40-year old U.S. trade embargo and other sanctions should be eased so that American exporters can profit from the trade.
"It's clearly time for Congress to curb the overzealous trade embargo on Cuba," said Sen. Max Baucus, D-Mont., who chairs the powerful Senate Finance Committee, "so that American ranchers and farmers can benefit to the tune of over $300 million a year."
Baucus, whose committee requested the study, is pushing a bill that would ease many of those restrictions, though most observers believe that this and similar initiatives have little chance of passing this year.
Mauricio Claver-Carone, a director with the U.S.-Cuba Democracy Political Action Committee, which lobbies Congress to retain U.S. sanctions against Cuba, said some lawmakers have placed "commercial interests over human interests" and are ignoring human rights abuses in Cuba.
He added that some congressional Democrats are opposing a free-trade deal with Colombia over human rights concerns, but are supporting more trade with Cuba.
A change in U.S. law in 2000 allowed agricultural commodity exports to Cuba, from soybeans to soft drinks. The United States had become Cuba's biggest agricultural supplier by 2004.
The Bush administration, seeking to put more pressure on the Castro government, tightened some of the trade restrictions and clamped down on banks that did business with Cuba.
The ITC report attributes a recent fall in U.S. agricultural sales to Cuba partly to the Bush restrictions, partly to more favorable credit terms offered by competitors and to overall drop in Cuba imports last year. Some analysts believe Cuba cut back on imports from the United States for political reasons.
The ITC notes that even though U.S. products are often the most competitive, the Cuban government's Alimport agency buys agricultural goods based on both commercial and "non-commercial factors." Such factors allegedly include Havana's efforts to pressure U.S. politicians and business interests that benefit from sales to Cuba to lobby Congress against the sanctions, the report said.
The report's prediction of added sales assumes that a ban on U.S. investments in Cuba would remain in place and that Cuba wouldn't change its policies.
The biggest gains in sales would be for fresh fruits and vegetables, milk powder, processed foods, wheat and certain meats, ITC investigators concluded.
Products in which the United States is already a major supplier would see more modest gains. The United States already accounts for 99 percent of Cuba's soybean imports, 76 percent of its animal feed and 65 percent of its poultry.
Lifting the travel restrictions would do little to increase agricultural sales, the report says. A much bigger impact would come from easing restrictions on financing and shipping transactions with Cuba, which the ITC estimates adds from 2.5 percent to 10 percent to the purchase price of U.S. agricultural products shipped to Cuba.
While large-scale U.S. agricultural exporters told ITC investigators that the impact of the new Bush restrictions were relatively minor, smaller exporters reported that they were more onerous.
Restrictions on business travel were also a problem, the ITC said, such as Cuban officials' difficulty in inspecting U.S. exporting facilities. "For many of these products, restricting business travel effectively bars U.S. sales to Cuba," the study said.
The report used official Cuban statistics, U.S. export data, interviews with U.S. exporters and shippers, academic studies, testimonies at ITC hearings and written submissions. An ITC mission traveled to Cuba in June.
ON THE WEB
The report can be found at http://hotdocs.usitc.gov/docs/pubs/332/pub3932.pdf
