July 19, 2007
News Release 07-074
Inv. No. 332-489
Contact: Peg O'Laughlin, 202-205-1819

The United States could provide more than half of Cuba's agricultural, fish, and forest product imports if certain U.S. trade and travel restrictions to Cuba were lifted, reports the U.S. International Trade Commission (ITC) in its publication U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions.

The U.S. share of such Cuban imports would rise from one-third to between one-half and two-thirds if the restrictions were lifted, according to the report.

The ITC, an independent, nonpartisan, factfinding federal agency, examined the effects of U.S. trade and travel restrictions on Cuban purchases of U.S. agriculture products at the request of the U.S. Senate Committee on Finance.

As requested, the ITC report provides an overview of Cuba's purchases of agricultural products since 2000, an analysis of the effects that U.S. restrictions on trade and travel to Cuba by U.S. citizens have on those Cuban purchases, and estimates of likely U.S. agricultural sales if such restrictions were lifted. Highlights of the report follow.

• In 2000-01, U.S. agricultural exports to Cuba were negligible; however, they grew rapidly, and by 2004, the United States was Cuba's largest supplier. Although the value of U.S. exports has fallen slightly since then, the United States still supplies more agricultural products to Cuba than does any other country, accounting for approximately 30 percent of Cuban imports in 2006.
• U.S. regulations, such as those that require the Cuban government to pay for U.S. agriculture products in cash or through letters of credit drawn on third-country banks, raise the cost of U.S. goods for Cubans and likely limit U.S. sales. Other factors that increase costs are port delays; high transport charges owing to limited shipping routes; foreign exchange transactions, exacerbated by the need for third-country financing; and the uncertainty surrounding visas for Cuban officials to inspect U.S. agriculture production facilities.
• About 171,000 U.S. citizens visited Cuba in 2005. According to Commission estimates, in the absence of U.S. travel restrictions, between 550,000 and one million U.S. citizens would visit Cuba annually. This increase in U.S. travel would likely increase demand in Cuba for more and better quality food for tourists as well as for Cuban citizens who work in tourism and related services.
• Eliminating restrictions on trade, particularly those related to export financing, would likely have a larger impact on U.S. agricultural sales than lifting the travel restrictions on U.S. citizens. This is because most food imported from the United States consists of bulk commodities that are sold to Cubans rather than foods that are sold to tourists. With the elimination of all such restrictions, U.S. exports to Cuba could almost double from their 2006 level. The largest absolute gains would be for fresh fruits and vegetables, including potatoes; milk powder; processed foods; and certain meats (poultry, beef, and pork).

U.S. Agricultural Sales to Cuba: Certain Economic Effects of U.S. Restrictions (Investigation No. 332-489, USITC Publication 3932, July 2007) will be available on the ITC's Internet site at http://hotdocs.usitc.gov/docs/pubs/332/pub3932.pdf.

A CD-ROM of the report may be requested by calling 202-205-2000 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.