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Dairy Facts 2016

Obama Re-establishes Diplomatic Relations with Cuba

Jul 02, 2015
(Photo from White House video)

This is an excerpt reprinted with permission from The Hagstrom Report, a news service providing original national and international agricultural news to its subscribers.

Commodity Leaders Note Recent Trip 

President Barack Obama announced Wednesday that the United States and Cuba have re-established diplomatic relations, effective July 20, and will re-open embassies in their respective countries.

In a statement delivered in the Rose Garden, Obama said, “In January of 1961, the year I was born, when President Eisenhower announced the termination of our relations with Cuba, he said: ‘It is my hope and my conviction that in the not-too-distant future it will be possible for the historic friendship between us once again to find its reflection in normal relations of every sort.’ ”

“Well, it took a while, but I believe that time has come,” Obama said. ”And a better future lies ahead.”

The United States already has a building in Havana, but it is known as the Cuban Interests Section.

“Later this summer, Secretary [of State John] Kerry will travel to Havana formally to proudly raise the American flag over our embassy once more,” the president said.

Obama noted he has asked Congress to lift the embargo that prevents economic activity between the two countries except for sales of medical products and food to Cuba.

“Of course, nobody expects Cuba to be transformed overnight,” Obama said.

“But I believe that American engagement — through our embassy, our businesses, and most of all, through our people — is the best way to advance our interests and support for democracy and human rights.”

He added that he has asked Congress “to listen to the Cuban people. Listen to the American people.”

On Air Force One during Obama’s trip to Nashville later in the day, White House press secretary Josh Earnest said the administration has not done any whip counts on passing a bill to lift the embargo, but he added the administration believes there is “at minimum strong bipartisan support” for lifting it.

Earnest also said no timeline has been laid out for announcing an ambassadorial nomination and that he is not aware of a list of contenders for the nomination.

But even though Republicans have already said they will oppose confirmation of an ambassador, Earnest did not answer directly when asked whether the administration wants an ambassador in place when the embassy opens. He did say that it is the administration’s “strong preference” that the nominee be treated “fairly and confirmed in a bipartisan fashion.”

Asked whether Obama will fight as hard for the Cuban policy as he did for trade promotion authority, Earnest said the difference is that on Cuba the president has been able to take important steps without congressional approval.

“While there is still much work to do in Congress, establishing embassies is a great step forward to modernize the U.S.-Cuba relationship,” Sen. Jon Tester, D-Mont., said in a news release Wednesday.

“We must move beyond the Cold War-era mindset so that Montana farms, ranches and businesses can build new economic ties with Cuba.”

Tester noted he is cosponsoring the bipartisan Freedom to Travel to Cuba Act and the Freedom to Export to Cuba Act.

House Speaker John Boehner, R-Ohio, expressed an opposing view.

“The Obama administration is handing the Castros a lifetime dream of legitimacy without getting a thing for the Cuban people being oppressed by this brutal communist dictatorship,” Boehner said.

“As I’ve said before, relations with the Castro regime should not be revisited, let alone normalized, until Cubans enjoy freedom — and not one second sooner.”

It is unclear what direct impact re-establishing diplomatic relations will have on U.S.-Cuban agricultural relations. Even though the United States sells agricultural products to Cuba, the Agriculture Department does not have an officer in Havana because previously negotiated agreements did not include one.

Agriculture Secretary Tom Vilsack has noted that he has been unable to promote U.S. agricultural sales in Cuba. A USDA spokesman today said he had no guidance on whether the formal reopening of the embassy would affect that situation.

Nevertheless, U.S. farm leaders on Wednesday praised the re-establishment of diplomatic relations.

“Farmers, ranchers and agribusinesses across the nation welcome this continued progress toward normalized relations with Cuba,” said Devry Boughner Vorwerk, a Cargill official who is chair of the U.S. Agriculture Coalition for Cuba, in a news release.

“Not only are embassies critical to strengthening commercial ties – affording diplomatic status suggests a willingness to engage constructively on many important matters,” she said.

“We’re hopeful today’s announcement will ultimately lead to an end to the embargo and increased economic opportunity for agriculture in both our nations. USACC will continue our work with members of Congress from both sides of the aisle who have expressed support for ending the embargo.”

“We had heard this was imminent and we are pleased to see our relationship with Cuba move in a forward direction,” said U.S. Grains Council President and CEO Tom Sleight in an email. “We look forward to continued work to remove the embargo and develop the Cuban grain market.”

Obama made the announcement the same day that the Grains Council, the National Corn Growers Association and the North Dakota Barley Council said in a news release that their leaders had traveled to Cuba last week to see first-hand opportunities for expanding U.S. coarse grain exports if trade is fully normalized with the island nation.

“Cuba could be a growing market for U.S. corn, but our own policies are standing in the way,” said U.S. Grains Council Chairman Ron Gray.

“A major lesson from this trip was that the embargo has created an environment where our competitors such as Brazil dominate the market. If policy allowed us to help develop the Cuban market, we might be able to retake our dominant position.”

The Grains Council noted that Cuba has purchased corn from the United States since the early 2000s, with market share varying widely from as high as 100 percent to just 15 percent last marketing year.

Cuba has purchased distiller’s dried grains with solubles (DDGS), a byproduct of the ethanol manufacturing process, from the United States since 2005. If Cuba purchased all of its imported corn from the United States, it would be the 12th largest overseas market for the product, the council said.

The grain industry groups said they visited with government officials in the Cuban Ministry of Foreign Affairs, Ministry of Agriculture and Ministry of Foreign Trade and Investments. They also stopped at a Cuban port and visited rice and corn operations.

“This mission reaffirmed that it’s time for a new U.S. policy toward Cuba, and now is the time to act,” said Rob Elliott, the National Corn Growers Association first vice president.

There are several bills before Congress to ease the embargo, he noted.

“NCGA will continue to educate Congress on the importance of the U.S.-Cuba relationship,” Elliott said. “We are committed to advancing legislation that will reduce trade barriers, normalize trade relations and help us build a two-way trade relationship.”

Marion Nestle, food science professor at New York University, also returned from a trip to Cuba recently and posted on her Food Politics blog Wednesday about small farms there.

White House — Creating a New Course on Cuba

— Letter to Castro

— Letter from Castro (Translation)

S. 299 — Freedom to Travel to Cuba Act of 2015

S. 491 — Freedom to Export to Cuba Act of 2015

Food Politics — Small farms in Cuba: A brief report on my visit

— USDA Economic Research Service — U.S.-Cuba Agricultural Trade: Past, President and Possible Future

The Hagstrom Report covers Congressional hearings, markups and press conferences in Washington D.C., as well as national nutrition news and farm meetings throughout the United States. Subscribers to The Hagstrom Report receive a digital newsletter daily while Congress is in session and at other times as events require and news happens.


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