America's illogical trade policy hurts rice

America has specific trade restrictions against Cuba. China and Vietnam, two other totalitarian states, enjoy nearly free trade with the United States. Meanwhile, Cuba imports much of its rice from China and Vietnam. Does this make sense to anyone?

For 40 years Washington has tried to punish communist Cuba with trade sanctions. Right now the only people being punished are American farmers.

Last year Congress passed trade sanctions reform legislation, a vital first step toward reopening the Cuban market. The new trade policy contains several restrictions, but theoretically it opens the door to the important Cuban market.

To take advantage of this new opportunity, the USA Rice Federation arranged for a series of historic meetings between American rice industry leaders and Cuban trade officials, including President Fidel Castro. While the recently completed meetings were friendly and productive, the Cubans refused to buy our rice. At almost the same time they were signing an agreement to purchase 200,000 tons of rice from China.

Why China and not us? Our rice is of higher quality and costs less to deliver because of our proximity to Cuba ports. The Cubans said “no” because they insist that Washington drop all restrictions against trade with their country.

The biggest sticking point for the Cubans is a restriction that prohibits American banks and government agencies from financing any deals with Cuba. This is a legislative concession to hard-line opponents of Cuba. Since Cuba doesn't belong to any international financial organizations, it essentially forces them to pay cash for grain. For a poor country such as Cuba, a cash transaction is unlikely.

Why are we penalizing the Cubans (and U.S. farmers) with trade sanctions when we have nearly free trade with countries such as China and Vietnam? There is no reasonable explanation.

Cuba was once the number one export market for American rice. Marketing analysts say that Cuba has the potential to become a $60 million market for U.S. rice. This market is crucial if we want to revitalize commodity prices and make farmers self-sufficient again.

There are three things that need to happen to open Cuba as a thriving market for U.S. rice:

  • The new administration must develop workable regulations regarding trade with Cuba.
  • Congress should enact additional trade sanctions reform to address the financing issue.
  • Cuba should make a purchase of our product, even a small one, to prove to Congress that they are a willing partner.

American farmers need the Cuban market. As long as the current trade impasse exists, rice prices will remain depressed. Forty years of trade sanctions has done nothing to change the situation in Cuba. If the Cubans need to import rice, let it be American rice. Why should the communists in China and Vietnam benefit from our illogical trade policy.

John King III is an Arkansas rice producer and was a member of the USA Rice Federation 19-person delegation that met with Cuban trade officials in April.

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