Washington Insider-- Tuesday
Dealing with Cuba
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
Another Fight Over EPA's Water Regulations Could Develop After 'Prairie Pothole' FindingResults of research undertaken by the Environmental Protection Agency that found significant links between isolated bodies of water and the health of downstream waters could provide the basis for new confrontations between farmers and the congressional representatives on one side and the always-under-fire agency.
EPA last week published a study that concludes that many wetlands, prairie potholes, playa lakes and other types of isolated water bodies located outside of riparian areas and floodplains provide physical, chemical and biological functions that could affect the integrity of downstream waters. The study summarizes 1,200 peer-reviewed scientific studies.
An earlier draft version of the study had only made a distinction of whether the water bodies were connected, not the degree to which those linkages exist. However, a federal advisory board rejected EPA's conclusion that the scientific evidence isn't strong enough to show a connection between downstream waters and many upland wetlands, playa lakes, prairie potholes and other open waters located outside of floodplains and riparian areas.
Some EPA critics see the study as possibly laying the groundwork for greater regulation of isolated waters. The issue is likely to become the subject of congressional interest, especially from members who represent northern Great Plains states.
Stabenow Joins Congressional Delegation Visiting Cuba
Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., was one of six members of a congressional delegation that arrived in Havana over the weekend. Sen. Pat Leahy, D-Vt., who led the delegation told the press that the senators planned to spend their time meeting and talking with Cuban officials to find out what their expectations are as the two countries move toward more normal economic and political relations.
The delegation was scheduled to meet with Cuban government officials, Cardinal Jaime Lucas Ortega y Alamino and ambassadors to Cuba from Mexico, Spain, Norway and Colombia. The statement said the delegation might meet with “representatives of Cuba’s civil society,” a term referring to those working for reform within the communist political system.
The full U.S. economic embargo is unlikely to be lifted before 2018, when Cuban President Raul Castro has said he will step down. In the interim, U.S. agriculture groups will continue to lobby for more sales of farm commodities to Cuba. More than 35 agricultural entities already have formally joined in a campaign in support of increased trade with Cuba.
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While the U.S. embargo has not reduced repression appreciably or helped develop democracy on the island nation, it remains to be seen if a shift in U.S. policy will be more successful. (Also see longer item below.)
Washington Insider: Dealing with Cuba
Certainly, the last word about U.S.-Cuban relationships and policies has not been spoken and political fights over these issues are expected to be bitter and long-lasting. At the same time, significant changes are now underway that will be very difficult to unmake, regardless of the politics.
For example, an important package of regulations was issued Jan. 15 by the Treasury and Commerce departments. These take effect very quickly and allow U.S. exports of telecommunications, agricultural and construction equipment, permit expanded travel by Americans to the island and open banking relations.
Treasury Secretary Jacob Lew told the press that the amended regulations take the United States one step closer to replacing out-of-date policies that were not working. “These revised regulations, together with those issued by the Commerce Department, will implement the policies on easing sanctions related to travel, remittances, trade, and banking announced by the president on December 17,” Lew said.
Several of these affect agriculture. For example, there is a changed definition of “cash in advance” payments required from Cuban buyers could help agriculture, but other U.S. business as well. It is seen as substantially increasing U.S. access to Cuban markets.
The Treasury Department noted that the revisions will, among other things, allow U.S. financial institutions to open accounts at Cuban financial institutions to facilitate the processing of authorized transactions; authorize certain transactions with Cuban nationals located outside of Cuba; and allow a number of other activities related to, among other areas, telecommunications, financial services, trade and shipping.
Treasury still has stiff rules on U.S. transactions and only financial institutions can engage in certain types of transactions. Secretary Lew noted that for the financial industry as a whole and other industries affected by these regulations will be required to make “business decisions” about next steps.
A key change in the regulations is their support the president's instruction to the secretary of state to initiate discussions with Cuba on the reestablishment of diplomatic relations.
Treasury’s Office of Foreign Assets Control says it is adding a general license authorizing transactions with Cuban official missions and their employees in the United States. In addition, and to support other U.S. government interests, an expanded general license will authorize Cuban-related transactions by employees, grantees and contractors of the U.S. government, foreign governments and certain international organizations in their official capacity.
In addition, the Commerce Department says it will publish several significant transactions under license exceptions, as opposed to individual licenses, and one change in its licensing policy.
The first type of transaction includes the commercial sale of items for private-sector economic activity in Cuba, such as the sale of building materials for private-sector construction of residences, buildings for meeting halls or churches. This would also include the license-free export of items for an auto-repair shop, hair salon and private-sector agricultural activity.
The second area includes both the donation and commercial sale of consumer communication devices. Commerce also will allow under this license exception the export of items for Cuba's telecommunications infrastructure in order to facilitate communications between the United States and Cuba. However, it also is likely to facilitate communications within Cuba.
A third area under this license exception are items going to individuals and groups looking to establish an independent civil society in Cuba, including human rights groups and other independent civil groups.
Expanded license exceptions also will cover a wide range of donations for the cultural, scientific and sporting realm. Commerce also is explicitly stating a licensing policy that has been in effect and that is a presumption of approval for items that would go to help protect U.S. air quality, water quality and coastlines from environmental dangers that might come from Cuba, such as an oil spill.
Clearly, things are a long ways from “business as usual” between the United States and Cuba, but they seem to be moving firmly toward an expanded relationship with strong support from the business community.
In general terms, the wide U.S. disagreement with Cuban human rights policies and their commitment to Central Planning remains. However, there is also growing recognition that the more than five decades-long economic and trade sanctions have not been effective in changing Cuba’s domestic policies. Barring an enormous miscalculation on either side the current movement toward modestly more open policies and more trade seem to be within practical reach, Washington Insider believes.
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