The Agricultural Export Facilitation Act of 2005: Its Rationale and Relevance for U.S. - Cuba Trade
Terry L. Maris, PhD
The Trade Sanctions Reform and Export Enhancement Act of 2000, which permits the sale of U.S. food and medical supplies to Cuba, has benefited both countries. In the first two years under this law U.S. exports to the island nation increased from $6.9 million to $260.8 million. Of the items exported, 96 percent were food related. Since its enactment the TSRA has enabled U.S. farmers to sell approximately $800 million in agricultural products to Cuba. These transactions have resulted in Cuba moving from 226th position to 21st as a U.S. agricultural market.
Even with the benefit of the TSRA it is estimated that the U.S. embargo has cost American farmers approximately $1.24 billion in lost revenues annually. Total agriculture-related costs to the U.S. economy are calculated to add an additional $3.6 billion annually in lost revenues.
Frustrated by what many perceive to be a disregard by the administration for the spirit and intent expressed by Congress in passing the original TSRA in 2000, a bipartisan group of legislators introduced Senate Bill 328 and House Bill 719 on February 9, 2005. The key elements of this proposed legislation would: (1) allow Cuba to make payments directly to U.S. banks, (2) not require payments to be received prior to goods leaving U.S. ports, (3) facilitate ag-related travel by both Cubans and U.S. citizens.
This paper will present the results of a survey and telephone interviews with key stakeholders, including the senators and representatives sponsoring these new bills, the leadership of the American Farm Bureau and the leadership of the farm bureaus of the states most affected by the U.S. embargo. Discussion will focus on the perceived need for this legislation and the projected impact on the national and state agricultural economies.
(Published in the proceedings of the Association for the Study of the Cuban Economy, volume 15; http://lanic.utexas.edu/project/asce/pdfs/volume15/pdfs/maris.pdf).