CubaNews / May 2007
By Larry Luxner
On May 28, Cynthia Thomas will head to Havana for Alimport’s 2007 U.S.-Cuba Trade Round — marking her 35th trip to Cuba. vBut her very first visit to the Caribbean island, in December 2000, is still the one that sticks out in her mind.
“It was a 10-day trip, and we stayed at the Martin Luther King Center in Miramar,” she recalled. “We slept in bunk beds. It was run by the Baptist church and was extremely well-run, but we had no air-conditioning or hot water. We had been there for eight days when Vicki Huddleston [chief of the U.S. Interests Section in Havana at that time] invited us to her house, and I remember excusing myself to use the restroom. It was like paradise.”
Now, Thomas enjoys both air-conditioning and hot water when she travels to Havana, as president of the Texas-Cuba Trade Alliance.
Until recently, the Dallas-based nonprofit was barely known outside the Lone Star State. But lately, it has been making waves in an effort to promote increased sales of rice, cotton, grains and other Texas agricultural commodities to Cuba.
That’s easier said than done, considering that Texas is one of the most conservative states in the nation — as well as the home of President Bush, quite possibly the fiercest opponent of improved relations with Cuba who’s ever occupied the White House.
“Yes, Texas is conservative but what makes us unique is that it’s a wildcat state, with petroleum and cattle,” she said. “People saw opportunities, took risks. It’s that culture that spawned companies like Southwest Airlines. There’s a real strong can-do attitude here.”
With 22 million people, Texas ranks No. 3 in population after California and New York, and No. 2 in size after Alaska.
Its relatively high per-capita income and sprawling metropolitan areas — Dallas-Fort Worth, Houston, San Antonio, Austin and El Paso, to name a few — make it a potentially lucrative market for Cuban exports.
But since trade for now is only one-way — and restricted to agricultural commodities under the 2000 Trade Sanctions Reform and Export Enhancement Act (TSRA) — the Texas-Cuba Trade Alliance is focused mainly on Texas food shipments to the island, and on efforts to end the U.S. embargo.
“Before the 1959 revolution, essentially all the rice produced in Texas went to Cuba,” she pointed out. “So when the embargo went into place, all of a sudden, it hammered the industry overnight. Close to 20 mills shut down.”
Thomas, a native of Tulsa, Okla., has a long background in policy analysis, as well as a master’s degree from the University of Minnesota’s Humphrey Institute of Public Affairs. In 1995, Thomas moved to Dallas, and six years later, made that memorable first trip to Cuba; she came back convinced Washington was on the wrong track.
“I did a lot of research and realized that it was just a failed policy,” she told CubaNews in an interview last month in Grapevine, Tex.
“So the first thing I did was organize agriculture groups in Texas. We drafted legislation, and in May 2001 succeeded in getting the first U.S. resolution passed at a state level calling for an end to the embargo. Gov. Rick Perry tried to stop it, but he didn’t want to oppose the ag groups.”
In 2003, Thomas and a few other like-minded individuals including Parr Rosson of Texas A&M University established the Texas-Cuba Trade Alliance as a nonprofit. Help also came from the Texas Farm Bureau, based in Waco.
“Since a lot of the board members are agriculture trade groups and had the ability to lobby on their own, we decided to focus strictly on education, and helping break through the barriers to entry. I got the IRS to recognize us as a Section 501(c)(3) charity,” she said.
“Companies like Cargill and ADM that are going into Cuba already have the infrastructure and people available to make it happen, but small and medium-sized companies don’t know how to do it. And because of President Bush, it was politically challenging for the state of Texas to organize trade missions to Cuba,” she explained.
Bush wasn’t the only factor. “Because of Tom DeLay’s prior position in Congress, there were a lot of reservations in Texas about being visible [with regards to Cuba], simply because they didn’t want to cross him,” she added. “He controlled a lot of the purse strings.”
Opposition from exiles also threatened to disrupt the newly formed organization’s activities, including a 2003 seminar in Houston.
“You occasionally get handfuls of nasty e-mails,” she told us. “Some Cubans in Houston and Austin tried to tell people we were sneaking around, doing a workshop on Cuba and having U.S. taxpayers subsidize trade.
“They wrote to the Houston Chronicle, trying to get them to do a negative story, and they ended up doing a nice story. They also tried to get the Sheraton in Houston to cancel the conference, but failed.”
Today, the TCTA has around 50 member companies and organizations. Membership in the alliance is basically free — and from time to time the TCTA sponsors events such as the “Doing Business in Cuba” seminar held Apr. 26 in Dallas, which attracted 30 executives.
Thomas has personally led 15 to 20 trade missions to Cuba as president of Tri Dimension Strategies LLC, her own consulting firm.
In September, Texas agricultural groups will host a four-day trade mission to Cuba. Participants will pay roughly $1,200 each including airfare from Miami, lodging, meals and ground transportation within Cuba.
So how much business is there really in Cuba for Texas-based companies?
Using a share of production method, Texas exports of farm products to Alimport have come to $113 million since December 2001, according to Rosson.
“Texas agribusinesses are well-positioned to respond to the expanding Cuban market due to quick delivery time from Texas ports, the availability of high-quality products and competitive pricing,” he said.
During 2006, Texas exports to Cuba were valued at $22.3 million — down from the $40 million range in 2004 and 2005.
“Two important reasons for this decrease,” said Rosson, “is that the U.S. has exported increasing amounts of soybeans and soybean products, of which Texas has an extremely small share of U.S. production, and a decrease in exports of dry milk, which is coming mainly from Texas” — which recently displaced New Zealand as Cuba’s main source of powdered milk.
In 2005, the state’s share of total food exports to Cuba by value was 11.46%, up from 10.17% in 2004 and 2.09% in 2003. But last year, that tumbled to 6.54%, said Rosson.
On the other hand, Texas is a major producer of chicken and rice — two of the top U.S. agricultural exports to Cuba. That explains why so many poultry and rice companies have joined the alliance.
“Members get introductions to entering the Cuban market — and the expertise of all the board members, for free,” she said. “That way, they can know who the buyers are. Then the next time, they can do it on their own.”
In 2002, she said, Dallas-based Exxon Corp. applied for a travel license to “poke around” in Cuba, but OFAC denied the request.
“One of the things that’s challenged Texas companies to date is that containerized shipping is so far away, it doubles or triples the cost of your product,” said Thomas. “For example, from a factory in Dallas to the Port of Houston, you’re looking at a four-hour drive. But if you have to truck your product to Jacksonville, that takes 18 or 20 hours. With gas prices maybe hitting $4 a gallon this summer, it’ll be dramatically cheaper if you can get that product on a ship in Texas.”
“My one piece of advice is, in meetings with Alimport, meet the buyers. Pedro Alvarez is not a buyer. By meeting the buyers, you find out their unique issues and the challenges they’re facing that are inhibiting them from buying more goods.”
Of course, things will dramatically change once the U.S. and Cuba can trade freely.
“From Texas, you’d have many more industries open up — petroleum, IT and the technologies that run hotels, air-conditioning and ventilation systems. We’ve got two companies headquartered in Texas — American Airlines and Continental — that are flying people from Miami to Havana,” said Thomas. “Now, we fly from Houston to Austin or San Antonio for the day. Once Cuba opens up, you’d be able to do business day trips to Havana.”