A U.S. bill designed to free up agricultural trade to Cuba shouldn’t hurt Canadian wheat sales to that country.
Legislation introduced into the U.S. House of Representatives in February would remove a number of regulatory restrictions on trade, financing and travel between the United States and its island neighbour.
U.S. wheat groups say the bill could enable the U.S. to become the dominant supplier of Cuba’s wheat imports, perhaps as much as 700,000 tonnes a year.
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Cuba has imported an average of 870,000 tonnes of wheat annually over the past 10 years.
The U.S. is the leading supplier at 400,000 tonnes a year, followed by Europe, Canada and Black Sea countries.
However, the Canadian Wheat Board said that if the legislation is implemented, it won’t harm Canada’s wheat trade.
“We don’t see this as having any impact on sales of western Canadian wheat into Cuba,” said spokesperson John Lyons.
Over the past 10 years, the CWB has sold an average of 96,000 tonnes of wheat (including a small amount of durum) to Cuba, with a high of 203,700 tonnes in 2007-08.
Exports to Cuba total 27,000 tonnes in the first six months of 2009-10.
Lyons said Cuba buys high quality Canada Western red spring wheat with protein around 13 to 13.5 percent and mixes it with lower quality wheat bought from the U.S, Europe and Argentina.
That is unlikely to change, even if Cuba buys more wheat from the U.S.
The bill was introduced Feb. 23 by Democratic congressman Collin Peterson.
“Helping feed Cuba is good for the U.S. economy and for the Cuban people,” Peterson said.
“This bill increases the ability of our farmers to sell their products to Cuba just like they do with our other trading partners.”
Previous attempts to open agricultural trade with Cuba were undermined by the U.S. department of the treasury, which imposed a number of special rules making it difficult for Cuba to finance wheat purchases.
For example, payment is required before wheat leaves U.S. ports rather than when the shipments change hands.
As well, Cuba is not eligible for letters of credit, sales have to be financed by non-U.S. banks and U.S. citizens are limited in their ability to travel to Cuba to conduct business.
Steve Mercer, spokesperson for U.S. Wheat Associates, a wheat trade promotion group, said Cuban officials told American wheat interests that those rules made it difficult to conduct business with the U.S.
Mercer said the only ones suffering from the U.S. trade restrictions against Cuba are the Cuban people.
“Our position is that this embargo has failed to accomplish what it was intended to, which was to drive the Castro regime out of power.”
He said the U.S. has unrestricted trade with other countries that have regimes as odious as the Cuban dictatorship.
The U.S. bill faces a long road before being implemented. It must go through committee hearings and gain support from the U.S. Senate before being signed into law by the president.
Mercer said that might be a bumpy road.
“There is a strongly embedded anti-Castro group in the U.S. that has strong political influence,” he said, which can be expected to oppose attempts improve relations with Cuba.
