President Obama elaborated yesterday on his National Export Initiative to double U.S. exports within five years. His speech lays out his plans, and I hope he succeeds, although he is starting by throwing some already negotiated trade agreements out the window with this rhetorical slop:
“We’re going to strengthen relations with key partners, specifically South Korea, Panama, Colombia, with the goal of moving forward with existing agreements in a way that upholds our values.”
Meanwhile, the House Agriculture Committee heard testimony on a bill designed to boost farm exports to Cuba, and Senator Klobuchar introduced a Senate companion bill. Here’s coverage from Minnpost.com, and statements from witnesses are posted here.
The bill under discussion ends U.S. travel restrictions, changes the “cash-in-advance” requirement for agricultural sales so that payment is required before cargo is delivered in Cuba as opposed to before leaving a U.S. port, and allows Cuba to make its payments by direct wire transfer to U.S. banks instead of through a third country. It doesn’t change the statutory requirement that Cuba pay cash in advance for U.S. agricultural products.
There are many steps the President’s new “Export Promotion Cabinet” could take to increase exports to Cuba, on its own or by supporting legislation in Congress. It could focus on agriculture, or it could make openings in other sectors, just as the President did last year by allowing a few types of telecommunications deals with Cuba for the purpose of expanding access to information.
My earlier comments on the agriculture issue are here.
3 comments:
So I guess Babalu has it wrong again. There is no danger to the American taxpayer. The shipments are paid in full in cash by the Cuban government before they are delivered.
No need for the "cash in advance" Bill now?
Yesterday the Office of Federal Assets Control ("OFAC") published a notice in the Federal Register that reversed, at least temporarily, the absurd interpretation that it had adopted of the statutory requirement in the Trade Sanctions Reform and Export Enhancement Act ("TSRA") that exports of agricultural and medical goods to Cuba required "payment of cash in advance." In February 2005, OFAC changed its interpretation of that language to require that payment be made prior to the departure from the U.S. of the ship loaded with the goods destined for Cuba.
By yesterday's Federal Register notice OFAC restored its previous interpretation of TSRA's statutory language. That previous interpretation was consistent with prevailing commercial law which holds that delivery of goods is made, and payment is due, when a negotiable bill of lading for the goods is delivered to the buyer or its agent. The notice re-adopted the "cash against documents" rule that states that payment must be made "before the transfer of title to, and control of, the exported items to the Cuban purchaser" which would occur at the delivery of a negotiable bill of lading or other document of title.
This change is effective through September 30, 2010, at which point the old interpretation will become effective again.
I will tell you what will happen here, from past experience. The US flagged ships will be Idling around offshore of Habana, waiting days for the Cubans to scrape together the money to pay for the goods onboard. This will result in delays for the shipping companies until the point is reached that they will no longer ship to Cuba. Since all goods purchased are required to be transported in US flagged ships, Cuba's purchases will soon reach Zero.
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