CUBA NEWS
December 21, 2004

Clash over payment imperils US sales to Cuba 503y44

By Marc Frank, Financial Times, UK, December 20 2004.

The first battle over US policy on Cuba since President George W. Bush's re-election blew up in Havana and Washington this month concerning the future of booming US agricultural sales to the otherwise embargoed Caribbean island.

Cuban payments for food are being held up for the first time since the trade began three years ago. Sales depend on licences from the US Treasury Department, which oversees the embargo.

The Trade Sanctions Reform and Export Enhancement Act of 2000 created a crack in the embargo, allowing Cuba to import agricultural produce for cash in advance. That was enough to catapult the country from last to 22nd place among US agricultural export markets, with sales of about $400m (€301m, 206m) this year and $1bn since 2001.

Some officials in the Bush istration are questioning the practice of paying after cargo is dispatched from the US but before it is released to the Cuban importers, saying that payment should arrive before the goods leave port. Cuba has made clear it will buy elsewhere if that happens. The istration says it will issue new guidance on the trade before the end of the year.

"The Bush istration has a two-pronged strategy relating to Cuba," says John Kavulich, the president of the US-Cuba Trade and Economic Council, a group that monitors commercial activity. "First, use every available regulatory means to lessen the foreign exchange earnings by the government of Cuba. Second, use every available regulatory means to increase the cost to the government of Cuba of all imported products and services."

Pedro Alvarez, head of Cuba's food-importing agency, Alimport, suggests he will turn to other suppliers if he is forced to pay while goods remain in US ports. "Such a requirement makes our purchases almost impossible to proceed," Mr Alvarez told 350 US politicians and business executives in Havana last week to mark the third anniversary of the food trade.

Washington's Cuba policy, once the exclusive domain of cold warriors and anti-Castro exiles, has become a bread-and-butter issue for farmers in the rice-growing Mississippi delta, the corn and soya fields of Iowa and apple orchards and cattle ranches of the north-east. Gulf Coast port workers, employees of Georgia's chicken-processing plants and executives of agribusinesses now link jobs and income with the land many knew only for its trouble-making president, Fidel Castro, and a revolutionary called Che Guevara.

"This issue has galvanised and energised everyone in the industry because you are dealing with serious money and a serious economic consequences on farmers, businesses and communities," said Kirby Jones, the president of Washington-based consulting firm Alamar Associates. "Events over the past few weeks have shown us how tenuous and fragile what we have achieved over these years is, subject to the interpretation of just three words: cash in advance."

Inside the Havana convention centre, Mr Alvarez, banned from visiting the US as a security risk, was on first-name with a host of state-level agriculture officials and just about everyone else. But beyond the conference confines it was obvious that the US-Cuba relationship, always tense, could deteriorate during Mr Bush's second term.

Cuba's largest defence manoeuvres in 18 years were under way across the country in response to a hypothetical "imperial fascist invasion". The US's top diplomat was embroiled in his latest scrap with authorities for including a reference to imprisoned dissidents in a Christmas display fronting Havana's seafront drive. Cuba retaliated by placing hoardings in front of the US mission with red swastikas and photos of Iraqi prisoners being tortured and children accosted by US troops.

"The egg and chicken industries have benefited greatly from this business that is now at about $60m," says David Radlow of United Egg producers. The organisation has ed 30 other farm groups to demand that the trade be left alone.

"We certainly hope the president will hear our prayers. Cuba is now our eighth market for chicken exports," Mr Radlow says.

The president of the US Rice Producers' Association, Dwight Roberts, adds that his group is also lobbying hard for the status quo.

"We've gone from zero exports three years ago to 160,000 tonnes in 2004. Cuba is now our third export market after Mexico and Japan," he says "We are taking this issue very seriously. Here we are with a $400m market 90 miles off our coast that we can grow and it just does not make economic sense to damage that."

Copyright The Financial Times Ltd 2004. "FT" and "Financial Times"


PRINTER FRIENDLY

News from Cuba
by e-mail



PRENSAS
Independiente
Internacional
Gubernamental
IDIOMAS
Ingls
Francs
Espaol
SOCIEDAD CIVIL
Cooperativas Agrcolas
Movimiento Sindical
Bibliotecas
DEL LECTOR
Cartas
Opinin
BUSQUEDAS
Archivos
Documentos
Enlaces
CULTURA
Artes Plsticas
El Nio del Pfano
Octavillas sobre La Habana
Fotos de Cuba
CUBANET
Semanario
Quines Somos
Informe Anual
Correo Elctronico

DONATIONS

In Association with Amazon.com
Search:

Keywords:

CUBANET
145 Madeira Ave, Suite 207
Coral Gables, FL 33134
(305) 774-1887

Journalists
Editors