South Carolina looks to benefit from Cuba trade – just not yet

Screen shot 2016-03-28 at 9.49.29 AMWASHINGTON In July 2003, a South Carolina shipping company’s barge made history as the first vessel under a U.S. flag to carry cargo to Cuba in more than 42 years. A year later, a South Carolina trade delegation had a three-hour meeting with Fidel Castro that resulted in a $10 million export deal to sell the state’s goods to the island.

“The day your barge came to Cuba, the news traveled all over the world,” Castro told Charleston trade entrepreneur Jack Maybank Sr., whose company sent the vessel, at the time.

Maybank saw Cuba as the “development opportunity of the century,” with an educated population of 11 million that was hungry for U.S. commodities – a promising environment for business partnerships with South Carolina and other states.

The most important and advantage in trade South Carolina brings is its people. We are very much like the Cubans in Cuba today. You first build a friendship, which then brings trust, which then brings business, and that is the way Cubans and South Carolinians are very unique. Jack Maybank Jr., whose late father shipped cargo to Cuba

Thirteen years later, South Carolina should be in a great position to profit from trade with the island nation. It has both the ports and the exports – poultry, soybeans and car parts – that are coveted on the island. It also has a geographic advantage to ship to Cuba – close but without the politics of doing business with the former Cold War rival that the Cuban-American-heavy communities in South Florida have.

Despite the Palmetto State’s ground-breaking early ventures, however, the continuing U.S. trade embargo has made it difficult to capitalize on that advantage. While U.S. companies have been able to sell food to Cuba since 2000, the restrictions on extending credit and government export assistance give businesses in other countries the upper hand. The embargo can’t be lifted without congressional action, which is unlikely to happen in an election year.

Rep. Mark Sanford, R-S.C., who traveled to Cuba with President Barack Obama last week, said he was impressed by what he saw there.

“You go to a place like that – where people are living in what appears to be decaying buildings, people are driving around in cars built in the ’50s and ’60s – and it’s a reminder of the might of the American economy, since this is a consequence of the embargo,” he told McClatchy in an interview after he returned from Havana.

State trade and agriculture officials said there were several openings in the Cuban market for South Carolina products, especially once financial restrictions loosen up. Soybeans, rice, poultry and biofuels have been identified by the U.S. Agriculture Department as new markets that farmers could tap into.

It’s a big hindrance to us because we have a wonderful port, we are ready to do business, we just need to get rid of this restriction and we’ll be ready. Harry Ott, S.C. Farm Bureau president

“South Carolina would be in a wonderful position here – we have a very vibrant poultry industry and we would certainly be in a position to export soybeans, cotton, corn and wheat,” said S.C. Farm Bureau President Harry Ott. “But it’s hard to load up a ship and get paid in cash for exports. It’s a big hindrance to us because we have a wonderful port, we are ready to do business, we just need to get rid of this restriction and we’ll be ready.”

The state could also play to its strengths by going beyond traditional exports, said S.C. Agriculture Commissioner Hugh Weathers.

“Our first signature activity might actually be peaches,” he said. “We’ve had success exporting peaches into Mexico and the Caribbean, so assuming that the taste preferences are similar we’d hope to do that. We could compete especially in a certain time frame of the year. As crop harvest goes up on the East Coast we could capitalize on the Cuban market.”

While the state’s agriculture officials seem “cautiously optimistic,” Weathers said some viewed the Cuban market with skepticism.

“South Carolina farmers are somewhat conservative and don’t want to be caught up with the infatuation of Cuba at the expense of not making the margins in other markets, like Europe,” he said. “The sentiment relayed to me by poultry executives and others is that we should exercise some caution in this competition to be the first in Cuba in a big way.”

Everyone’s saying gosh, Cuba is a great market to be a part of, but if you had to lay out the 12-15 steps of this process we’re at about step 3. Hugh Weathers, S.C. agriculture commissioner

As part of Obama’s visit, Agriculture Secretary Tom Vilsack met with his Cuban counterpart, Gustavo Rodriguez Rollero, and announced several measures to promote collaboration between the U.S. and Cuban agriculture sectors.

“The normalization of trade relations would allow U.S. farmers to use lower transportation costs to edge in on the European Union’s food exports to Cuba,” Vilsack said. “When the embargo is lifted, the United States will be in a very good position to reclaim a portion of the market we’ve lost.”

The growing tourism sector on the island also could open up opportunities for South Carolina. The nation of 11 million had 3.5 million tourists last year, a number that could easily double.

“Because tourism would be one of the first things to take off there I’d imagine us being able to sell more items from South Carolina in the specialty foods and spirits sector,” said Pennie Bingham, executive director of the World Trade Center Charleston.

“I think we’ve barely scratched the surface on what the possibility could be once their economy is more prosperous. I think in the short term there could be some niche opportunities for us. For example, their car situation is pretty bad, and I can imagine us being able to sell them tires and equipment for those cars,” she said.

Despite the spotlight of Obama’s historic visit, most of these opportunities hinge on Congress lifting the embargo. This is unlikely to happen in the last year of Obama’s term.

“We don’t know what will happen yet, but what we do know is that change to Cuba policy will live or die based on who is elected president in November,” Sanford said.

Who becomes president will determine what happens next in Cuba. Rep. Mark Sanford, R-S.C.

The Charleston Republican said normalizing trade relations should not be the first step in re-engaging with the island, but he does believe in ending the travel ban to Cuba.

“National policy can’t be driven by a handful of ZIP codes in South Florida,” he said, referring to the Miami area’s large Cuban-American population. “Not only is travel an American right, but it puts money in the right places. When I was there I talked to people who have given up careers as engineers who now drive cabs, so from the standpoint of tourism this is a big deal for them.”

He added, “There are a whole host of communist regimes – Vietnam, China – and we haven’t said you can’t travel there . . . our view is that the best way to change them is to engage with them, and all I’m saying is we should start with travel.”

Vera Bergengruen, The Island Packet

March 27, 2016





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