Should Ex-Im Finance Exports To Cuba?
9:43 PM 02/04/2015
Agricultural interests are asking Congress to formalize President
Obama’s easing of the U.S. embargo on Cuba, which would open the door to
government support for exports to the island.
In a blog post for The Hill on Tuesday, Mauricio Claver-Carone noted
that, “the newly formed U.S. Agriculture Coalition on Cuba is pushing
Congress to instruct the Export-Import Bank to finance expanded
agricultural sales to the Castro dictatorship in Cuba.”
Obama announced in December that he would use executive authority to
ease travel and trade restrictions against Cuba, but full repeal
requires an act of Congress, which the coalition began advocating for in
According to The Associated Press, “U.S. law still prohibits any form of
credit to Cuba’s state-run import agencies,” a restriction that American
farmers consider “the main barrier to sales to Cuba.”
“It’s going to take Congress to end this embargo for the U.S. to be
competitive in Cuba,” Paul Johnson, vice-chairman of the newly formed
U.S. Agriculture Coalition for Cuba, told the AP. “Our products can’t
compete with Brazil, Argentina, the EU, and China because of the credit
Congress relaxed certain restrictions on Cuban-American trade in 2000,
allowing agricultural exports on a “cash-in-advance” basis. But after a
promising start, sales have slowed in recent years, and the most recent
data suggest “2014 could be the worst year for U.S. exports to Cuba
The coalition believes that allowing exporters to secure financing for
sales to Cuba would do much to reverse that trend, by putting U.S.
products on an even footing with foreign competitors whose governments
already allow Cuba to make purchases on credit.
However, Claver-Carone points out that such a move would entail certain
risks, insofar as “Cuba ranks among the world’s worst credit-risks and
debtor nations,” with a Moody’s credit rating of Caa2, or “very high
Given that the Cuban market has just one official customer—the Cuban
government—”the question becomes: Is that customer credit-worthy?”.
“It’s one thing to lobby to do business with one of the world’s last
remaining totalitarian dictatorships for the sake of profit,” he says,
but argues that “it’s quite another to peddle the deceit to the American
public that trade with Cuba serves some public interest here or in Cuba.”
Claver-Carone also considers it “somewhat ironic” that, with Ex-Im’s
fate still hanging in the balance as the June expiration of its charter
approaches, “agribusiness conglomerates who have benefited most from the
Ex-Im Bank’s export credits and loan guarantees are lining up to drive
the final nail in the bank’s coffin.”
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