Senator Heitkamp (D- ND) Should Have Fact-Checked The Data Used For Her Article About Cuba

Senator Heitkamp Should Have Better Fact-Checked The Data Used For Her Article About Cuba

On 25 January 2018, The Honorable Heidi Heitkamp (D- North Dakota), published a statement in the Grand Forks, North Dakota-based Grand Forks Herald newspaper:

Some of the data referenced to support her statements were false.  Whether the data was obtained from her United States Senate staff and/or advocacy organizations, imperative for the data to be accurate.  

The Republic of Cuba should neither be oversold nor undersold in pursuit of political gain as each may have consequences for United States companies.

More than 6,300 days have passed since the last legislation seeking to expand the United States-Republic of Cuba commercial landscape introduced in the United States Congress became law.  

During this time, however, there have been substantial regulatory export-supportive changes which would have been far more impactful (commercially and politically) if the government of the Republic of Cuba had permitted those changes to be implemented.  

Since December 2001, the Republic of Cuba has purchased more than US$5,537,994,881.00 in agricultural commodities and food products under provisions of the Trade Sanctions Reform and Export Enhancement Act of 2000.

The first issue: 

Senator Heitkamp writes: "U.S. agricultural exports to Cuba have dropped every year since 2009 as a result of the onerous requirement that Cuba pay cash in advance for U.S. imports. Cuba instead turns increasingly to producers in other countries that could offer credit, which, as any farmer or exporter will tell you, is the way business is done."

In 2009, United States agricultural commodity and food product exports to the Republic of Cuba were US$528,482,955.00.  

In 2010, the value was US$366,467,782.00
In 2011, the value was US$358,457,389.00
In 2012, the value was US$457,318,357.00
In 2013, the value was US$348,747,293.00
In 2014, the value was US$291,258,881.00
In 2015, the value was US$170,551,329.00
In 2016, the value was US$232,064,645.00
In 2017, the value was US$248,703,676.00 (through November 2017)

While the value of US$710,086,323.00 in 2008 has thus far not been exceeded, important to remember that the first exports in December of 2001 were US$4,318,906.00, while the following year, 2002, the value increased to US$138,634,784.000.

Since 2009, the year-to-year values have fluctuated; and for 2015, 2016, and 2017 there have been increases.

Reasons for the fluctuations include global commodity pricing, lack of efficient banking transactions, and lack of payment terms from United States companies.  

United States companies and United States financial institutions would not provide the type of payment terms that is preferred by the Republic of Cuba which are government-to-government long-term payment (financing) agreements and purchasing from government-controlled entities.   

Government of Vietnam-operated Vinafood 1 & Vinafood 2 have provided payment terms to Republic of Cuba government-operated Alimport of two (2) years to pay for rice (25% to 30% broken). United States producers can provide this product; payment terms without the use of government programs would be cash to 30 days; and for credit-worthy customers, generally not exceed sixty (60) days to ninety (90) days.

Have any United States companies and United States financial institutions publicly offered (through a media releases, congressional statements, company policies) that they are prepared (meaning today) to provide payment terms (and disclose what those would be) for exports of agricultural commodities and food products to the Republic of Cuba?  Lacking these public positions, the successful advocacy for legislation remains stagnant. 

Thus far, only Moline, Illinois-based John Deere (2017 revenues approximately US$27 billion) has publicly confirmed the company will provide, through internal sourcing, payment terms for agricultural equipment exported from the United States to the Republic of Cuba. 

Has Alimport publicly shared what (specific) payment terms it would require from United States companies as a predicate for increasing purchases? 

What would be meaningful in terms of marginally and positively impacting United States exports (meaning everything that is permitted by law and regulation)?  The implementation of Direct Correspondent Banking (DCB), which may be initiated by the United States Department of the Treasury's Office of Foreign Assets Control (OFAC).

DCB will eliminate a triangular payment process and create a two-way payment process resulting in more efficiency and less cost; and removing a revenue stream for third-country financial institutions.  That's worth tri-partisan advocacy.

The second issue: 

Senator Heitkamp writes: "Cuba imports $2 billion in agricultural goods annually." 

Alimport reported that it imported approximately US$1.8 billion in food products and agricultural commodities in 2017, compared with approximately US$1.8 billion in 2016, US$1.8 billion in 2015, and US$2.55 billion in 2014. Alimport reported that the country imports approximately 70% to 80% its food product and agricultural commodity requirements.

The government of the Republic of Cuba reported spending US$2.554 billion in 2008 to import 3.423 metric tons of food products and agricultural commodities. Using the actual value for U.S. Dollar food products and agricultural commodity exports to the Republic of Cuba, the United States sourced 27% of the Republic of Cuba’s food product and agricultural commodity imports in 2008.

The government of the Republic of Cuba reported spending US$1.47 billion in 2007 to import 3.423 million metric tons of food products and agricultural products. The United States was the source for 29%.