Louisiana — already the country’s leading outlet for limited exports to Cuba — could benefit down the line from plans to re-establish diplomatic relations and expand the types of goods U.S. companies are allowed to sell to the communist country, several Louisiana officials said Wednesday.
Former Gov. Kathleen Blanco, who led a four-day trade mission to Cuba in March 2005, said Louisiana is in a unique position to take advantage of Cuba opening up to trade. During her trip with 17 business people, Cuba and Louisiana signed a $15 million trade deal in which Louisiana sold the island nation foodstuffs. “It was a one-way street. We sold; Louisiana businesses were advantaged,” she said.
Blanco said she found Cuba was a poor country, dependent on Russia. Now that the Russians are becoming more aggressive on the world stage, she said it might be wise for the U.S. to reach out to Cuba.
“It’s very smart for us to tone down the political rhetoric,” she said. “Cuba is an island begging for investment.”
Gov. Bobby Jindal took issue with President Barack Obama’s plan to normalize relations with Cuba.
“With today’s announcement, the president is appeasing a communist dictatorship headed by the Castro brothers that takes political prisoners and completely disregards basic human dignity,” Jindal said. “Taking steps to normalize relations with Cuba only serves to reward them, and it is a disservice to those in Cuba who wish to be free and who live in fear of a dictatorial regime.”
Jindal said he was happy that American Alan Gross “has returned to his family after being imprisoned — but he should have been released without conditions.”
When Blanco led her trade mission to Cuba, one of the companies that was represented in the delegation was Dan-Gulf Shipping, of Metairie. At the time, Dan-Gulf was one of seven U.S. shippers licensed to carry products to Cuba.
A 1963 U.S. trade embargo banned states from exporting merchandise to the island nation. But a change in U.S. policy in the aftermath of Hurricane Michelle in November 2001 allowed for agricultural and humanitarian exceptions to the law, as long as Cuban agencies paid cash in advance for the goods.
Since then, more and more vessel operators have been able to obtain licenses to ship foodstuffs to Cuba.
Lowell Stewart, vice president of Dan-Gulf, said the increased competition has led to a reduction in the number of vessels his company sends to Cuba. “We had Cuban loaders going over at least once a week back then,” he said. “Now we have one ship a month.”
Stewart said he’s curious as to how Obama plans to change the trade policy.
According to a fact sheet sent out by the White House, plans are to aid the fledgling Cuban private sector by authorizing the export of building materials for residential construction, goods for use by entrepreneurs and agricultural equipment for small farmers.
“Possibly the way the trade act is written right now, it’s expansive enough to allow for additional cargo to move,” Stewart said. “What has to be on Obama’s mind here is an end to sanctions against Cuba.”
Ending the trade embargo, though, would require an act of Congress.
Because Dan-Gulf vessels regularly run to the north coast of South America, Stewart said changes in policy could lead his company to ship more cargo to Cuba.
According to figures from the World Trade Center in New Orleans, the dollar value of U.S. goods shipped to Cuba remains low. The top commodity sent to the country from the U.S. was food, and the export value was $331.5 million in 2013. Louisiana accounted for nearly $76.7 million of that total.
Because of exports that traverse the Mississippi River, Louisiana has been the top state for Cuba-bound exports since the laws were changed in 2001. In 2013, the value of exports from Louisiana to Cuba was nearly $145 million, with the top categories being food, agricultural products, beverages and tobacco products. Louisiana accounted for 40 percent of total U.S. exports to Cuba in 2013.
That’s a return to historical patterns. Cuba was Louisiana’s top trading partner before Fidel Castro seized power in 1959.
Michael Olivier, who served as economic development secretary under Blanco and now leads the Louisiana Committee of 100, a private sector economic development group, said U.S. exports to Cuba have not been significant.
“These new regulations will provide more export opportunities and mean more business and jobs for Americans,” he said in a statement. “Some project, if the embargo were lifted, it would mean a trade opportunity of $21 billion in the first five years.”
One major Louisiana industry that isn’t expected to see any near-term benefits of closer ties to Cuba is the oil and gas industry.
C.R. “Rusty” Cloutier, president and CEO of Lafayette-based MidSouth Bank, said he doesn’t believe Obama’s re-established diplomatic relations with Cuba will lead to American oil and gas drilling in deep offshore waters any time soon.
“It might five to 10 years from now,” Cloutier said. “But there ain’t no oil company that’s going to put a $4 billion rig off the coast of Cuba just because (Obama) thinks we’re going to get better relations with them.”
Cloutier said foreign government seizures of oil and gas assets are always a fear. Right now, American companies with assets in Venezuela and off the west coast of Africa are “sweating” losing their investments.
Mark Ballard, of The Advocate Capitol news bureau, and Billy Gunn, of the Acadiana bureau, contributed to this report.