| U.S. Trade With Cuba? You Bet!
This story was written by CBS News Producer Portia Siegelbaum.
CBS, March 11, 2005. HAVANA,
March 11, 2005 - New rules implemented by Washington could make it harder for
U.S. agricultural producers to sell to Cuba, but Louisiana Gov. Kathleen Blanco
is seeking a bigger piece of the pie - already worth some $1 billion for her state.
Cuba currently buys from companies in 38 U.S. states, and although more
than half of its purchases are shipped through the Port of New Orleans, only a
small amount of the cargo originates in Louisiana. "We are here to
explore opportunities that will benefit you as well as Louisiana," the governor
told Cuban officials upon arrival. During a three-day visit that included
lunch with President Fidel Castro, Blanco won a commitment from Cuba's food importer,
Alimport, to buy $15 million worth of agricultural products. On Wednesday,
Alimport CEO Pedro Alvarez signed the first deals with representatives of Louisiana
Rice Mill and AnPro Trading to purchase rice and powdered milk valued at $2 million.
In 2000, Congress passed a law allowing Cuba to purchase agricultural products
directly from U.S. suppliers although on a cash-only basis. That exemption
in the more than four-decades-old U.S. economic and trade embargo of the communist
island has allowed Cuba to become the 25th largest importer of U.S. agricultural
exports. At the contract signing ceremony, Alvarez optimistically declared,
"This brings us closer to the elimination of restrictions. And we are sure
that once these restrictions are lifted, Louisiana will have a significant role
in trade with Cuba." On the same note, Alvarez signed an accord with
the head of the Port of New Orleans, Gary La Grange, intended to encourage the
continued use of that facility for the shipment of goods to the island. La
Grange noted that two ships from his port docked in Cuba on Tuesday and another
vessel was in New Orleans at the moment loading cargo for Cuba. "We look
forward to great dividends in the future...not just from cargo but from cruise
ship passengers," he said. Alvarez picked up the theme, saying, "The
time will come when instead of several ships a month, there will be several ships
a day" sailing from New Orleans to Cuba. In 2001, the first boatload
of American food to sail to Cuba under the exemption to the embargo left from
the Port of New Orleans. Today goods for Cuba go through 23 U.S. ports. Despite
the positive tone, U.S.-Cuba trade faces a number of obstacles. Although credit
is the norm in international trading, Cuba has had to pay its American suppliers
fully in cash before the cargo could be turned over to Alimport. Because
the embargo bans direct banking relations, Cuba has paid substantial banking fees
to transfer payments through third nations. But a recent Treasury Department ruling
effective the end of this month will obligate Cuba to fully pay for the goods
even before they are loaded in a U.S. port. Previously it paid when the ship bearing
the cargo docked. Alimport's Alvarez issued a press statement recently
saying Cuba "would honor its commitments" but only if "the terms
and conditions are consistent with internationally accepted business practices."
U.S. agricultural producers feared the new ruling, intended to squeeze
Fidel Castro, would give the edge to suppliers in other countries. They
took their concerns to the head of Treasury's Office of Foreign Assets Control
last week. Now, Department spokeswoman Molly Millerwise says, "As long as
a standard letter of credit is in place a shipment can move forward." That
should alleviate Cuba's concern that goods paid for in advance of shipment could
be held up by U.S. courts as compensation for damages in lawsuits filed against
Castro by Cuban exiles. On Wednesday Alvarez said Cuba was paying the Louisiana
exporters with letters of credit. Presumably the letter of credit will be issued
while the goods are still in the U.S. However, the U.S. seller would not cash
in that bank document until his goods were en route to Cuba. Nevertheless, the
use of letters of credit adds to Cuba's costs. After signing the agreement
with Alvarez, Gov. Blanco met for 45 minutes with James Cason, the highest-ranking
U.S. diplomat in Cuba and head of the U.S. Interests Section here. He reportedly
urged her to make sure Louisiana producers were paid up front in cash. A
State Department official, speaking on the condition of anonymity, also told CBS
News the Cubans should pay "cash on the barrel head" adding, "You
don't get my gumball until I get your quarter." The governor turned
down Cason's offer to set up a meeting with Cuban dissident Osvaldo Paya, best
known for circulating a petition supporting changes in Cuba's economic and political
system. Nevertheless, she did accept a last-minute invitation to lunch
with Castro. Blanco's spokesperson, Denise Bottcher, said the invitation was accepted
"out of respect for the President." Blanco's trip to Cuba came
under heavy criticism by anti-Castro groups in Louisiana, and they were sure to
oppose her meeting with their long-term enemy. But upon arrival in New
Orleans Thursday evening, the governor defended her face-to-face with the Cuban
leader by saying, "We had just signed agreements with Cuba to $15 million
of our goods, food and fiber products. Many of the agreements were already signed,
and many more are waiting to be signed. We didn't want to jeopardize that by perhaps
insulting the president of the country." By
Portia Siegelbaum
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