Stateline Story

Despite Federal Chill, States Keen to Trade with Cuba

State officials from Alabama, Louisiana and Maine will visit a Cuban cigar factory and tour a rum museum this week while encouraging President Fidel Castro's communist regime to buy more U.S. agricultural products.

Alabama, Louisiana and Maine are among a number of states trying to drum up trade with Cuba despite a federal embargo first imposed by Dwight Eisenhower in the late 1950s shortly after the revolution that brought Castro to power. Congress amended the embargo in 2000, allowing agricultural products to be sold to island nation 90 miles south of Florida.

The action came after then-Gov. George Ryan (R) of Illinois led a delegation to Cuba in 1999, becoming the first governor to visit since before the Bay of Pigs invasion in 1961 when about 1,300 members of a CIA-supported Cuban exile force launched an invasion that ended in failure.

In July 2002, North Dakota Gov. John Hoeven (R) visited Cuba, and two months later then-Gov. Jesse Ventura of Minnesota (I) traveled there. South Carolina Lt. Gov. Andre Bauer visited in January 2004.

During the latest state visit to Havana this week, state officials will try to help U.S. companies negotiate cash-only contracts for sales of agriculture and health-related goods under the narrow confines of U.S. restrictions. Last July, the Bush administration tightened limits on travel and currency transfers, but sales of the type states are pushing were unaffected.

At least 10 states will be represented at this week's trade fair, Michelle Butler, CEO of the Navarretta Group, a San Diego firm that analyzes the Cuban market and arranges business meetings, told Stateline.org. However, not all will have officials present.

Maine is providing $250 stipends for the trip to industry representatives who hope to sell apples, potatoes, maple syrup and dairy products, said Maine Agriculture Commissioner Robert Spear. Spear, who traveled to Havana on Sunday (12/12), said Cuba's controversial record on human rights isn't a deterrent to capitalizing on export trade opportunities.

"We're looking to help our farmers and develop export trade. That's our priority. As far as I know, it probably hasn't been fair down there, but I think there is a future for them, and a future for trade. The first (exporters) that can get in may succeed in the future," Spear said.

While Spear and others see the trade trip as potentially opening the door to an untapped market, others have criticized it as a political event. "The government of Cuba has continued to politicize the commercial process," said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a nonpartisan research group that has tended to be critical of Cuba's commercial activities.

Politicians such as Rep. Peter Deutsch, D-Fla., have questioned the legality of agreements to facilitate Cuba's import of farm products. Idaho, Montana, California, South Carolina and Kansas are among states that have signed such deals. Deutsch said Cuba has been pressuring U.S. firms that want to sell agricultural products to the regime to become more politically active and work to abolish the embargo.

Emory University political scientist Juan del Aguila agrees with Deutsch that the commercial activity is politically motivated. "From the standpoint of the Cuban government, the purchases serve more than an economic need. They serve a broader, longstanding foreign policy and political goal, which is to recruit American firms on behalf of ending the commercial embargo," he said.

Despite the Bush administration's hard line, U.S. trade with Cuba has grown steadily and reached $321 million this year as of September. Archer Daniels Midland Co. of Decatur, Ill., ranked first among all U.S. companies, exporting $8.9 million worth of corn to Cuba last year.

Maine, California and Texas have passed resolutions encouraging trade with Cuba, and more than half the states are making sales there. Among the top U.S. exporters to Cuba are North Dakota, Iowa and Illinois. Other states active in Cuban trade are Arkansas, California, Florida, Georgia, Louisiana, Mississippi, Pennsylvania and Texas, according to federal trade data.

Kansas Gov. Kathleen Sebelius (D) signed an agreement in January with Cuba's largest food importer aimed at increasing trade. A South Carolina delegation signed a similar agreement. Other state agreements struck with Cuba have included:

  • South Dakota's delegation agreed to sell 5,000 metric tons of peas in October.
  • Vermont contracted in August to send $6 million in powdered milk to Cuba.
  • Montana agreed in September 2003 to sell $10 million in farm products to Cuba such as wheat, dry beans and peas.
  • Iowa is among the top exporters of corn and soybeans to Cuba, but Gov. Tom Vilsack (D) expressed ambivalence about promoting trade with the Caribbean island nation.

Vilsack said, "I have deep concerns about the human rights situation in Cuba and have been unwilling to travel to Cuba for that reason. Having said that, our secretary of agriculture, Patty Judge, has been promoting trade with Cuba, primarily to benefit our farm families who are struggling for new markets. I think it's a matter of opening up opportunities for family farmers so that they have better incomes."

Rich Waltzer, president of Splash Tropical Drinks of Fort Lauderdale, Fla., said he has sold millions of dollars worth of daiquiri mix, soy milk, orange juice, sardines and other products to Cuba since September 2002.

"Cuba is our neighbor. Cubans want to put the past in the past. What are you going to do, alienate them for the next 1,000 years? It doesn't make sense. I am creating jobs, new jobs in the state of Florida. It's the next untapped economy worth billions of dollars for the United States," Waltzer said.