CubaNews / September 2006
By Larry Luxner
One year after Hurricane Katrina devastated their state, officials in Baton Rouge are once again turning their attention to Cuba — and the opportunities the island offers for Louisiana.
Michael J. Olivier, Louisiana’s secretary of economic development, vowed that despite other pressing priorities, the state would resume efforts to forge trade ties with Cuba.
He noted that during the 1950s, Cuba was Louisiana’s top trading partner, ranking No. 1 in imports and No. 7 in exports. Trade with Cuba accounted for 6,000 Louisiana jobs; 20% of the state’s pine lumber went to Cuba, and over 30% of all goods passing through the Port of New Orleans were Cuba-bound.
"Prior to [Katrina and Rita], Louisiana took steps to revive our historical partnership with Cuba, made possible thanks to very recent policy changes, and take advantage of the opportunities that partnership offers," he said. "We have a long history of trade with Cuba and had a profitable and equitable business relationship until 1959.”
In March 2005, Louisiana Gov. Kathleen Blanco visited Cuba and enjoyed lunch with Fidel Castro — a controversial trip that was quickly forgotten in the aftermath of Katrina, which slammed into the Gulf Coast on Aug. 29, 2005, killing over 1,000 people and leaving New Orleans a flooded mess. For months, Cuba wasn't on anyone's radar screens (see CubaNews, January 2006, page 7).
But that may be changing as Louisiana officials seek to resume the expansion of lucrative export markets.
"The Bush administration has devoted millions of dollars toward 'hastening' political transition in Cuba,” complained Baton Rouge businessman Randy Haynie. "Doesn't it make more sense to allow the private sector the freedom to develop relationships with the future leaders of Cuba now?"
A study conducted by McNeese State Uni-versity has determined that every ton of product sold to Cuba generates $50 in the local economy and $75 in the state economy. The Port of Lake Charles reports that those dollars translate to$6.60 of direct revenues per ton in its revenue-generating operation.
Significantly, the first shipment of U.S. rice to Cuba in 2002 under the Trade Sanctions Reform and Export Enhancement Act (TSRA) was from the Port of Lake Charles. That year, their shipments to Cuba — which includes primarily rice, peas and lentils — exceeded 7,600 tons.
Between 2001 and 2004, the Port of New Orleans shipped more than $446 million of the $800 million in U.S. agricultural commo-dities sold to Cuba through TSRA.
Olivier said he fully expects contracts signed following Blanco's visit to Cuba to result in $15 million in sales to Alimport, the Cu-ban government's state food importer. These include pledges to buy tons of milled rice, powdered milk and other goods from Louisiana firms.
"Such commitment and sales are a promising start to a trading relationship that will be essential to the successful revitalization of Louisiana," he said. "Short-term, it's about the opportunity to sell Louisiana products to Cuba and support our producers and farmers. In the long term, this agreement can reposition Louisiana as an important trade partner with Cuba."
Haynie is even more vocal.
"The greatest potential to lift the Gulf Coast back onto its feet lies in trade with Cuba," he said. "Cuba was Louisiana's number one trading partner for many years during the first half of the 20th century. Besides Louisiana, other Gulf Coast states with strong economic ties to our neighbor to the south, for example Texas and Florida, lost a key trading partner.
"This condition has persisted for 45 years, leaving the Gulf Coast states more vulnerable to economic hardship, as exemplified by the consequences of recent hurricanes."
Haynie blamed the Bush administration's "routine lack of consideration for the Gulf region" for the area's high poverty levels.
"If not for recent tightening of trade restrictions with Cuba by the administration, increased imports would have strengthened these important relations," he complained.
The businessman noted that Alimport was prepared to spend $750-800 million on U.S. food purchases this year. But because of U.S. regulations, Cuba was forced to buy from other, more secure food providers.
"Is our government reduced to follow the whims of a self-serving Miami-based political engine?" charged Haynie. "It is grossly unfair that the Gulf region — for almost half a century — should have to bear the brunt of a failed policy that has more to do with retribution than meeting practical American policy goals. After 45 years, we demand the opportunity to pursue a new approach of constructive engagement because we believe we can do better."