In Cuba, Arkansas governor seeks to chip away at embargo

Arkansas Gov. Asa Hutchinson on Monday urged the U.S. Congress to allow food companies to sell to Cuba on credit, favoring it as a first step in a gradual repeal of sanctions against the Communist-led island.

Hutchinson, a Republican, is the first U.S. governor to visit Cuba since Washington and Havana restored diplomatic relations in July after a 54-year break.

He leads an Arkansas trade delegation, seeking an edge as states jockey to take advantage of the U.S. opening to Cuba. Democratic New York Gov. Andrew Cuomo led a similar delegation in April.

U.S. President Barack Obama has used executive authority to relax parts of the comprehensive trade embargo of Cuba and has asked Congress to lift it completely.

Hutchinson, a former member of Congress and senior official in the U.S. Department of Homeland Security, called the extension of credit "the logical next step."

"That doesn't require the full lifting of the embargo," Hutchinson said in an interview. "Once that is done, then let's see commerce be extended and increase. Hopefully the rules of the Cuban government will be more relaxed as well. And then ... Congress will take additional steps down the road."

The Senate appropriations committee in July passed a measure sponsored by Sen. John Boozman of Arkansas to allow credit sales, but Republican leaders in the Senate and House have yet to show they would allow it to come to a floor vote.

"They have to hear from the American people," Hutchinson said of Republicans in Congress. "I don't think big business should drive this decision."

The United States authorized cash-only agricultural exports to Cuba in 2000, creating up to $30 million a year in sales from Arkansas, the leading rice-producing state and home to meat giant Tyson Foods Inc.

Those once-booming sales have faltered because Cuba prefers to buy on credit.

If credit were extended, "We would seen an immediate surge of business all across the board," said Jaime Saide, Tyson's director of sales for Latin America and the Caribbean.

Hutchinson said such a first step would build confidence between the two sides and possibly lead Cuba to embrace more free-market reforms, citing China and Vietnam as Communist countries that have accommodated foreign investors.

"So it's got to be not only steps by the United States, but appropriate responses by the Cuban government," Hutchinson said.

(Reporting by Daniel Trotta; Editing by Richard Chang)