President Obama’s just-completed trip to Cuba made him the first American president to visit since Calvin Coolidge in 1928. While both sides of the political aisle can debate the virtue of such a trip, it is important to highlight some underlying issues that lurk behind the scenes in the wake of the historic visit.
First, there should be a commitment to advance political reform and civil liberties for the Cuban people before we pursue economic and trade relations. Congress should thoroughly review issues of human rights and personal freedom in Cuba before advancing any of more than a dozen pieces of filed legislation intended to normalize relations. Of course, the administration should also take such matters into account, as it develops policy recommendations that seek to improve the historic tension between our two nations.
Simultaneous with the president’s effort to improve this relationship, another wing of the administration is working on regulations that could complicate and potentially thwart any progress made to date, or desired in the future.
Since Dec. 17, 2014 when the president surprised the nation with his initiative to improve relations with Cuba, the one consistent image of the island nation has been the cigar. References to Cuban cigars, as a staple of their economy and international symbol of the country, began to surface throughout our national media. The immediate discussion turned to “Will we be able to get Cuban cigars into the United States?” Rules on this were being addressed by the Treasury Department recently, and Americans traveling to Cuba in recent months have been permitted to return with up to $100 worth of cigars for personal consumption.
During a February speech to the U.S. Chamber of Commerce, Cuban Trade Minister Rodrigo Malmierca called upon the administration to allow for exports of various Cuban products, specifically noting cigars.
On the other side of Washington, however, the U.S. Food and Drug Administration (FDA) is plotting the regulation of premium handmade cigars, threatening the very industry that supports, by some estimates, more than 250,000 jobs within 50 factories in Cuba. It is the implications this regulatory program has for the rest of Latin America that is even more troubling. The nations of Honduras, Nicaragua and the Dominican Republic have over 300,000 jobs associated with the premium cigar industry, and from seed to shore, these jobs serve as a foundation for each nation’s economy.
Twice, in a joint letter to six federal agencies, including Commerce, Agriculture, State, Homeland Security and the National Security Council, each respective ambassador to the United States from these three nations has voiced their concern over the FDA effort to regulate premium handmade cigars.
The ambassadors noted, “No regulatory measure should threaten such jobs, and hence raise the specter of political and economic consequences within our region.” The FDA’s own notice in the Unified Regulatory Agenda states, “This regulatory action will be likely to have international trade and investment effects.”
Jorge Alberto Milla Reyes, ambassador to the United States from Honduras, has also raised the implications of cigar regulation on the question of immigration. He stated, “There are, indeed, international trade and economic implications with regulating premium cigars from Honduras and throughout Latin America. The government of Honduras values the investment and source of employment provided by the premium cigar industry, and knows well how it provides for over 35,000 families in Honduras and 300,000 in the region. We cannot underestimate how this contributes to stability, especially at this time of concern over such issues as immigration and security.”
Regulating and threatening the stability of the premium cigar industry, which is more of an art form than public health issue, would also seem to run counter to the efforts by Vice President Joe Biden to advance economic and trade opportunities in the region. While Central American aid packages are introduced in Congress, the FDA is jeopardizing one of the stable sources of employment within this politically and economically sensitive region.
Under this regulatory proposal, new cigar blends would have to submit to the FDA for “premarket approval,” through a costly and cumbersome application process, that could take years for processing. One estimate is that it could take 5,000 hours, just for the application. And because of a “predicate date” of 2007, all cigars since then coming into the U.S. market, whether Cuban or from the rest of the Latin America and Caribbean Basin, would be subject to a “new product” set of standards to enter, which few could afford. It would destroy the boutique sector of the industry, and halt any limited release commemorative cigars. The Small Business Administration’s Office of Advocacy, in a comment letter to the regulatory docket, found FDA’s Initial Regulatory Flexibility Analysis “deficient — because it does not adequately describe the impacts on all types of newly covered small entities.” I could not agree more. Small businesses in America, Cuba and throughout Latin America would be devastated.
The premium cigar industry also represents thousands of American jobs, through more than 2,000 retail businesses, and a supplier and logistics network that spans from the Port of Miami to the distribution houses of Pennsylvania. It is hundreds of family farms from Lancaster County in the heart of Amish country, to the Connecticut River Valley. Small businesses from The Cigar Factory on Decatur Street in New Orleans, to El Titan De Bronze in the Little Havana community of Miami. These artisan businesses could never sustain federal regulation.
It’s more than just a cigar.
The point is that the administration is opening itself up to numerous unintended consequences if it tries to treat Havana any differently than Esteli, Danli or Santiago. The notion of an American bureaucracy intruding into an industry that poses no threat to the American general public, is purely for discerning adults, and serves as a source of invaluable jobs from the Pinar del Rio region of Cuba to the Jamastran Valley of Honduras should not be acceptable.
We have higher priorities.
• Mary L. Landrieu is a former Democratic member of the U.S. Senate, where she chaired the Small Business Committee and Energy Committee. She is now with the firm of Van Ness Feldman and is a consultant to Cigar Rights of America and the International Premium Cigar & Pipe Retailers Association.
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