Warming of Cuba relations may create opportunities for ND ag, industry

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Ag producers and manufacturers are looking for new Cuban export opportunities following President Barack Obama’s announcement last month of his intent to restore diplomatic relations with the island nation 90 miles south of the U.S. border.

Many trade and government officials seem to be taking a wait-and-see approach to the news.

Heather Ranck, international trade specialist and director of the U.S. Commercial Service in North Dakota, said she is ready to help producers and manufacturers who want to learn more about trade opportunities with Cuba.

“We help companies navigate through opportunities and how to export to every country in the world,” Ranck said. “Right now, this is a policy shift, but the mechanics will work themselves out over time.”

Easier trade

The U.S. imposed a travel and trade embargo against Cuba after Fidel Castro established a communist dictatorship there more than 50 years ago.

While Congress would have to vote to lift the embargo, Obama has ordered immediate changes to travel, business and financial policies that should make trade easier.

One of the biggest proposed changes is to authorize U.S. banks to open accounts at Cuban financial institutions.

Until now, Cuba had to pay cash for U.S. goods, and all payments had to be routed through a financial institution in another country. The institution collects a transaction fee, making it more costly for Cuba to do business with U.S. companies.

Cuba imports an estimated 80 percent of its food. North Dakota Agriculture Commissioner Doug Goehring said the state could benefit a great deal if restrictions are eased because farmers here grow many staples of the Cuban diet, such as dry beans, peas, lentils, wheat and potatoes.

North Dakota was one of the first states to export commodities to Cuba when Congress allowed the humanitarian trade of food and medicine in 2000. Eric Aasmundstad, former president of the North Dakota Farm Bureau, was introduced to Pedro Alvarez, chairman of the Cuban food import company Alimport, at a trade conference in Cancun in 2001.

He passed Alvarez a business card that listed the top products grown in North Dakota. Alvarez was so impressed the state produced so many of the products he was seeking that he invited Aasmundstad to visit Havana.

Goehring said the state benefited from the relationship with Alvarez for several years, but sales to Cuba ceased in 2011, about the same time Alvarez disappeared.

“Trade is all about relationships. It’s all about understanding how this can be a win-win, and it’s about trusting who you’re doing business with,” Goehring said.

Goehring said while Obama’s proposed changes sound promising, he wants to hear more about proposed credit and financial terms from Washington before he leads another trade mission to Cuba.

“If that is addressed and we know exactly where we stand, it’s very beneficial to take another trade delegation down there,” Goehring said.

Beyond commodities

Andy Peterson, president and CEO of the Greater North Dakota Chamber, and more than 30 other North Dakotans spent a week in Cuba last January learning about the Cuban people and their way of life.

He said he was struck by how the country seemed stuck somewhere between 1900 and 1950.

“Anything is possible to export to Cuba because it would be looking at ourselves from 1900 to 1950, to think of where we’ve been and where we could go,” Peterson said. “They want modern things, and they recognize that as American.”

As for how people with such limited means could afford U.S. goods, Peterson pointed to countries like Poland and Romania that were in similar positions not long ago.

“These countries had the same kind of capital crunch that Cuba has and it didn’t take long for them to figure out how to be entrepreneurial and develop capital,” he said.

Holly and Dante Battocchi, owners of Elinor Specialty Coatings in Fargo, hope to travel to Cuba in May with members of the American Institute of Conservation.

One of their products, BronzeShield, is a coating used by art conservators for monuments, architecture and statues made primarily of bronze. BronzeShield is made for ocean climates where bronze pieces need protection from corrosion.

If the trip is approved, attendees will visit historical buildings, museums and cultural sites, and connect with Cuban architects, archivists, curators and preservationists.

Holly Battocchi said while she does not know how big a client Cuba will become considering its current economic situation, she is encouraged by the fact the country seems to support the arts.

By Angie Wieck, INFORUM

January 9, 2015

Readers can reach Forum reporter

Angie Wieck at (701) 241-5501

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