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Letter to The Honorable Barack Obama, President of the United States of America

Nelson Urges President To Lift Agricultural Trade Restrictions With Cuba

In a letter sent today, Nebraska's Senator Ben Nelson joined several Senate colleagues in urging the President to lift restrictive rules that serve as a barrier to agricultural trade with Cuba. Congress passed a law in 2000 allowing the sale of U.S. food and medicine to Cuba, but in 2005 the Treasury Department adopted onerous rules that sharply reduced food sales to the island.

"Cuba represents a huge potential market for Nebraska's agricultural producers," said Senator Nelson. "I agree with Nebraska growers and producers who have told me they support ending restrictive rules that stifle American food exports to Cuba. These rules contradict previous laws passed by Congress that support expanded agricultural trade between the two countries."

A law passed in 2000 allows food and medicine sales to Cuba as long as payments are made by cash in advance or third-country bank letters of credit. U.S. exporters would receive payment after their goods shipped from U.S. ports and before they arrived in Cuba. In 2005, the Treasury Department began requiring the cash payments to be made before the goods were shipped from the U.S., which made imports from other countries more attractive and cut U.S. food sales to Cuba.

The letter urges the President to direct the Treasury Department to end its 2005 policy of requiring payment before goods leave port and its requirement that cash payment be routed through third-country banks. Other U.S. industries such as telecommunications and travel agents are already allowed to bypass middlemen and transact directly with Cuban banks.

"The Nebraska Dry Bean Growers Association appreciates Senator Nelson's continued efforts to truly open Cuba's market," said Nebraska Dry Bean Growers Association President Craig Henkel. "Urging the U.S. Treasury Department to remove the restrictions they put in place in 2005 only makes economic sense in helping Nebraska dry bean producers gain greater access to Cuba -- which was Nebraska's largest market for Great Northern beans before the original embargo."

Brandon Hunnicutt, President Nebraska Corn Growers Association, said: "We appreciate Senator Nelson's ongoing efforts in increasing one-way trade with Cuba and lifting the travel ban which will provide additional markets for corn products and co-products, which will in turn help Nebraska farmers. We join the Senator in urging the Administration to use its regulatory authority to remove these serious obstacles to food sales to Cuba."

"Trade with Cuba offers a tremendous opportunity for Nebraska soybean producers. In 2009 there were more than $144 million worth of U.S. soy products exported to Cuba. We support Senator Nelson's efforts to remove the Treasury Department policies that require third country banks, cash advance payments and limits on travel because these exports would only increase the benefit of our farmers and economy," said Scott Richert, Nebraska Soybean Association President.

Larry Flohr, Nebraska Wheat Board Chairman stated, "The Nebraska Wheat Board appreciates Senator Nelson's tireless efforts to remove trade and travel restrictions with Cuba. Over the past five years, Nebraska wheat farmers have met with Cuban grain interests in Cuba, Washington DC and Nebraska and are enthusiastic about bringing Nebraska's high-quality wheat to our neighbors in Cuba. We join Senator Nelson in encouraging the removal of trade and travel restrictions with Cuba to the benefit of both Nebraska's wheat farmers and the Cuban people."

In 2005, Senator Nelson met with Pedro Alvarez, then Chairman of Cuba's purchasing agency for farm and food products, to discuss the opportunities for trade between Nebraska and Cuba while the Senator was visiting U.S. facilities in Guantanamo Bay. The meeting was in advance of a Nebraska state trade mission to Cuba later that year that eventually produced a trade agreement for thousands of tons of Nebraska agricultural products. As Governor, Nelson lead eleven trade missions on behalf of Nebraska's producers and products and saw the level of exports increase over the eight years from $800 million to $2.7 billion annually.

Senator Nelson is a cosponsor of S. 1089, the Promoting American Agriculture and Medical Exports to Cuba Act of 2009, which would put the changes requested in the letter into law by ending Treasury's changes to the "cash-in-advance" provision and allowing direct fund transfers between U.S. and Cuban banks for agricultural exports, among other provisions.

The full letter is below. Co-signers include Senators Max Baucus (D-Mont.), Patrick Leahy (D-Vt.), Chris Dodd (D-Conn.), Jeff Bingaman (D-N.M.), John Kerry (D-Mass.), Tom Harkin (D- Iowa), Kent Conrad (D-N.D.), Byron Dorgan (D-N.D.), Patty Murray (D-Wash.), Ron Wyden (D-Ore.), Pat Roberts (R-Kan.), Tim Johnson (D- S.D.), Mary Landrieu (D- La.), Mike Enzi (R-Wyo.), Mike Crapo (R-Idaho), Blanche Lincoln (D-Ark.), Tom Carper (D-Del.), Debbie Stabenow (D- Mich.), Maria Cantwell (D-Wash.), Ben Nelson, Mark Pryor (D- Ark.), Jim Webb (D-Va.), Claire McCaskill (D- Mo.) and Amy Klobuchar (D- Minn.).

September 28, 2010

President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President,

We write to express our support for the regulatory changes that your administration is considering to increase people-to-people exchanges between the United States and Cuba. These exchanges could have a profound impact on both of our nations, building relationships and goodwill between our societies. But we also encourage you to implement further reforms to strengthen ties between the American and Cuban people and improve their economic well-being.

Specifically, we urge you to direct the Treasury Department to use its regulatory authority to remove two serious obstacles to food and medicine sales to Cuba. Congress enacted legislation in 2000 authorizing the sale of food and medicine to Cuba by payment of cash in advance or third-country bank letters of credit. For several years, U.S. exporters were able to make such cash-based sales, receiving payment after the goods shipped from U.S. ports and before transferring title and control to the Cuban buyers. In 2005, however, the Treasury Department adopted a new and more restrictive rule that required U.S. exporters to receive cash payment before the goods were shipped from the United States, which effectively ended all cash-based food sales to the island. We strongly urge repeal of this rule and reinstatement of a rule that is consistent with the cash-in-advance requirement and the intent of Congress to expand food sales.

We also urge you to direct the Treasury Department to lift the requirement that cash payment for U.S. food and medicine sold to Cuba be routed through third-country banks. This requirement, which is not mandated by the legislation, delays and increases the cost of these transactions. Moreover, the Treasury Department does not impose this requirement on licensed U.S. telecommunications and travel service providers, which may transact business directly. The Treasury Department should allow licensed U.S. agricultural exporters to do the same.

We recognize that other steps to increase food sales to Cuba require legislative action. Most importantly, lifting the travel ban would boost demand for U.S. foodstuffs in Cuba and, as the Cubans' incomes grow, would help recapture and increase the cash-based trade that we have lost to foreign competitors who offer the Cubans credit. In fact, a Texas A&M University study estimates that lifting the travel ban and addressing payment terms for U.S. exports to Cuba -- without extending credit -- would increase U.S. agriculture exports by more than $360 million annually, generating 6,000 jobs and a $1 billion boost to the U.S. economy.

There is broad support in Congress for taking these measures to reduce barriers on trade and travel with Cuba. We would welcome your support for these efforts. If we work together to increase U.S. food exports, and allow our citizens to travel freely to Cuba, we can establish and strengthen ties that benefit the American and the Cuban people.


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