In a major diplomatic initiative, President Obama announced in December 2014 a significant shift in relations with Cuba with the goal of transitioning from a decades-long policy of sanctions that were designed to isolate Cuba toward a more normal bilateral relationship. This report reviews the current state of agricultural trade between the United States and Cuba, identifies key impediments to expanding bilateral trade in agricultural products, identifies key provisions in the law to which these obstacles are anchored, and considers the potential consequences for trade in agricultural goods in the event that the current thaw in diplomatic relations was to be extended more broadly so that bilateral trade was returned to a more normal footing. Among the plethora of restrictions that remain in place, those frequently identified as suppressing trade in U.S. products to Cuba include the following: 
a prohibition on the provision of credit and financing for U.S. exports; denial of access to government programs and commercial facilities that otherwise would be available to promote and facilitate U.S. agricultural exports to Cuba; the ban on general U.S. tourism to Cuba; and a general ban on U.S. imports of goods from Cuba, with a recently introduced exception for goods produced by Cuban entrepreneurs. USDA Identifies Key Barriers to Expanded Agriculture Exports to Cuba

That significant barriers continue to restrict the potential for U.S. agricultural exports to Cuba was acknowledged by the U.S. Department of Agriculture (USDA) in April 2015 testimony before the Senate Agriculture Committee. But USDA contends that these potential advantages are more than offset by a number of policies governing food and agricultural exports to Cuba, pointing to the prohibition on any U.S. government export assistance under TSRA, such as credit guarantees and market promotion programs, as one. A number of close observers have suggested the decline in U.S. food and agricultural exports to Cuba in recent years is likely the product of several factors, among which are a preference within the Cuban government for diversifying its supplier network; an effort to establish closer relations with certain allies, such as China and Vietnam; and the availability of credit offered by some non-U.S. suppliers that U.S. competitors are prevented from providing under the U.S. trade sanctions regime. The committee subsequently expanded its request to include the following elements:
A qualitative analysis of existing Cuban non-tariff measures, Cuban institutional and infrastructural factors, and other Cuban barriers that would inhibit U.S. and non-U.S. firms in conducting business in and with Cuba, including restrictions on trade and investment; property rights and ownership; customs duties and procedures; sanitary and phytosanitary measures; state trading; protection of intellectual property rights; and infrastructure affecting telecommunications, port facilities, and the storage, transport, and distribution of goods; A qualitative analysis of any effects that such measures, factors, and barriers would have on U.S. exports of goods and services to Cuba in the event of changes to statutory, regulatory, or other trade restrictions on U.S. exports of goods and services to Cuba; and To the extent feasible, a quantitative analysis of the aggregate effects of Cuban tariff and non-tariff measures on the ability of U.S. and non-U.S. firms to conduct business in and with Cuba. Overall, ITC concluded in its March 2016 report that U.S. agricultural exports could expand significantly if U.S. restrictions on trade with Cuba were removed. A University of Florida economist raised an agriculture-specific word of caution in citing a number of potential concerns for Florida agriculture in the event the current ban on imports from Cuba were to be lifted, among which were subsidized competition from Cuban farmers—who pay no rent to the government for their land, among other subsidies—and the possibility that imported Cuban produce could introduce new pests and diseases into Florida agriculture. USDA suggests that exports of other U.S. commodities that have flagged in recent years, such as dry beans, wheat, and dry milk, could also rebound if normal trade relations were restored. USDA suggests that Cuba could exploit comparative advantages it has in the production of certain crops, such as tropical fruit, vegetables, sugar, and tobacco, to boost its agricultural exports to the United States if the embargo on its products were lifted. Although the United States is the world's largest sugar importer and Cuba was the largest foreign source of sugar for the U.S. market prior to the U.S. embargo, any post-embargo access to the U.S. sugar market would have to be negotiated. Recognizing that U.S. farmers and exporters are competing for food and agricultural markets in Cuba under terms that place them at a distinct disadvantage compared with foreign competitors that are not subject to restrictions under the U.S. embargo, some Members of Congress have proposed legislation that would ease various elements of the U.S. economic embargo on Cuba, or repeal it entirely. A brief review of several of the legislative initiatives that address agricultural aspects of the trade embargo against Cuba follows.
After more than half a century during which trade relations between the United States and Cuba have evolved from a tight economic embargo to a narrow window of trade in U.S. agricultural and medical products, the diplomatic initiative that President Obama announced in December 2014 to restore more normal relations with Cuba has raised the possibility that bilateral relations could move toward an expansion in commercial opportunities.
Many U.S. agricultural and food industry interests believe the Cuban market could offer meaningful export expansion potential for their products—but only if a number of restrictions under the U.S. embargo on trade with Cuba were to be removed. Among the measures most often cited as inhibiting exports of U.S. products, while simultaneously benefiting foreign competitors, are a prohibition on the provision of private financing and credit on sales to Cuba; denial of access to U.S. government credit guarantees and export promotion programs; the ban on general tourism to Cuba; and the general prohibition on U.S. imports of Cuban goods.
A question that arises for policymakers as diplomatic relations with Cuba are restored is what the potential opportunity is for U.S. food and agricultural exports to Cuba if bilateral relations are returned to a more normal status in the future. Corollary questions are what agricultural products Cuba might export to the United States if the existing prohibition on Cuban products were to be removed, and what implications trade in Cuban products could hold for U.S. agriculture.
Numerous stakeholders within the food and agriculture industry, as well as the U.S. Department of Agriculture (USDA), contend that U.S. agricultural exports to Cuba could expand markedly if key elements of the embargo against Cuba were removed. The prohibition on providing private credit and financing and the ban on access to government export promotion programs are two that are often cited. USDA asserts that basic commodities, like U.S. rice, wheat, dry beans, and dried milk could readily gain market share in Cuba under more normal trade relations in view of the close proximity of U.S. ports to Cuba compared with export competitors. Higher value food and agricultural products might make inroads in Cuba over time, it is argued, particularly if Cuba could increase its access to foreign exchange by selling its products in the United States.
Similarly, a report on Cuban imports and the effects of U.S. restrictions on U.S. agricultural exports to Cuba that the U.S. International Trade Commission issued in March 2016 at the request of the Senate Finance Committee concluded that the removal of U.S. restrictions on trade could result in significant gains for U.S. agricultural exports.
A concern voiced by some in agriculture is that opening the U.S. market to Cuba could pave the way for a new influx of tropical fruit and vegetable products that would compete directly with winter-season production in Florida, particularly if foreign investors perceive the opportunity to create an export platform for the U.S. market in Cuba. Among the concerns raised is that Cuban production is often subsidized by the government; also, that allowing Cuban produce into the U.S. market could become a conduit for introducing new pests and plant diseases. While Cuba was once a leading sugar producer and the largest foreign supplier to the U.S. market prior to the embargo, its sugar industry has undergone a steep decline since the demise of the Soviet Union. Cuba continues to export limited quantities of sugar and might very well request access to the lucrative U.S. sugar market if normal trade relations were restored. But any such opportunity would most likely be the result of a negotiated agreement between the United States and Cuba.
Some Members of Congress have introduced legislation in the 114th Congress that would ease U.S. economic sanctions on Cuba. These bills span a broad range of approaches, from a narrow focus on removing the ban on providing private financing and credit for the sale of agricultural goods to Cuba to far broader legislative initiatives that seek to lift the Cuban embargo altogether.