Tax Ag Exports to Cuba to Help Cover Losses in Revolution: Draft Bill

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By Casey Wooten

A draft bill from Rep. Rick Crawford (R-Ark.) would lift financing restrictions on agriculture trade to Cuba while reimbursing some companies that lost assets after that country’s revolution.

Crawford released a similar bill in the previous Congress, but the latest version would levy a 2 percent tax on agricultural commodity sales to Cuba. Those funds would reimburse about 6,000 U.S. companies and individuals whose property was confiscated by the Cuban government following the revolution.

The new draft bill would lift financing restrictions put in place by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA). That legislation allowed certain U.S. agricultural exports to Cuba, but also required Cuban buyers to pay in advance and in cash, while also requiring third-party banks to process the transactions.

While the Obama administration began easing travel and trade restrictions to the former Cold War adversary, President Donald Trump hasn’t taken the same tack. Trump has ordered a full review of U.S.-Cuba policy that is due in the coming weeks. Cuba is highly dependent on imports to feed its population, and U.S. agribusiness views the country as a lucrative export market for farm products, especially rice and poultry.

Compromise

The 2 percent provision is a compromise between Crawford and members of the Florida congressional delegation, James Arnold, communications director for Crawford, said in an email.

Some in the Florida delegation, such as Rep. Mario Diaz-Balart (R), have called for any Cuban trade bill to prohibit proceeds from going to organizations tied to the Cuban military or Castro regime.

“Our compromise proposal meets Rep. Diaz-Balart’s test and also takes an unprecedented step of helping compensate the aggrieved citizens of South Florida whose property was stolen from them,” Arnold said.

Representatives for Diaz-Balart didn’t return requests for comment on the new 2 percent provision.

Reaction

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, told Bloomberg BNA the 2 percent provision was “foolish” and unfairly put the burden of reimbursing those who lost property in the revolution on U.S. farmers. Kavulich said that, based on the $232 million in TSREEA-related exports to Cuba in 2016, it would take several hundred years to pay back the $8 billion lost by U.S. companies and individuals.

Kavulich also said he didn’t see food companies being on board with the 2 percent tax.

“If this is a trial balloon they’re using the same mixture that went into the Hindenburg,” Kavulich said.

Agriculture Secretary Sonny Perdue has told lawmakers he supports lifting the financing restrictions, but hasn’t weighed in on the 2 percent provision in Crawford’s bill.

A spokesman for the U.S. Poultry & Egg Association said the group didn’t comment on legislative issues. USA Rice didn’t return a request for comment.

Past Efforts

Crawford has been working on legislation to lift the financing restrictions for years.

In 2015, the House Agriculture Committee held a hearing on his Cuba Agricultural Exports Act, but the legislation didn’t advance. In July 2016, Crawford withdrew an amendment from an appropriations bill that would lift the restrictions. In exchange, he got a promise from House leadership and the Florida delegation that similar legislation would get floor time in the full House.

To contact the reporter on this story: Casey Wooten in Washington at cwooten@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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