White House seeks to block food sales to Cuba

The Bush administration wants to close a hole in the U.S. economic blockade against Cuba. Congress passed legislation in 2000 opening up sales of U.S. farm products to the island nation, but machinations at U.S ports and a recent Treasury Department pronouncement suggest that the Bush administration is scheming to put an end to such sales. Congresspeople from the farm states, however, are not falling into line.

Treasury Department officials announced Feb. 22 that as of mid-March, new financial practices introduced over the past several months would become official policy. Since 2001, the Cuban food importing company Alimport had customarily transferred money to U.S. food exporters while shipments were en route to Cuba or upon their arrival. But recently, U.S. authorities have delayed the loading of ships until money from Cuba has been credited to U.S. exporters’ accounts.

The new system causes delays, because Cuba, unable to deal directly with U.S. banks, must send payments via banks in third countries, a process that takes up three days. The Cuban government, in a statement released Feb. 25, said that property lingering in the United States, bought and paid for, is at risk for seizure by right-wing Cuban Americans emboldened by monetary judgments in their favor handed down by U.S. courts against Havana.

Ricardo Alarcon, president of Cuba’s National Assembly, alleges that the U.S. government has instructed banks to forgo crediting payments to the shippers’ bank accounts as part of its multifaceted and continuing campaign to undermine Cuba’s economy.

The new measures will certainly make U.S.-Cuba agricultural trade more difficult. Already, Cuba estimates that the cost of doing business with U.S. food exporters is much higher than average because of surcharges involved with the circuitous banking routes required. As a consequence, Pedro Alvarez, head of Alimport, has told U.S. suppliers that, while Cuba will honor its present commitments, it will be looking to buy food elsewhere.

For 23 food-exporting states in the U.S., sales to Cuba have been a growth industry. Cuba has achieved a place among the top 25 foreign customers for U.S. food, a sharp rise from its 2001 ranking as number 226. The U.S. has become Cuba’s fifth largest foreign food supplier, with exports to Cuba rising from $257 million in 2003 to $392 million last year. And 365 representatives from 150 U.S. agribusiness corporations negotiated over $125 million worth of new export contracts December 2004 at the Havana Trade Fair.

But, according to Alvarez, U.S. companies have already missed out on sales of 385,000 tons of food products to Cuba, worth $100 million, that it is buying from other foreign suppliers.

A group of U.S. senators, 10 from each party, introduced legislation Feb. 9 to block the Treasury Department modifications. They would allow Cuban officials to pay for food shipments upon their delivery in Cuba. The proposed legislation would also allow Cuban money to be sent directly to U.S. banks.

Sen. Ben Nelson (R-Neb.), a sponsor of the legislation, was recently quoted as saying, “Congress was pretty clear in its intent to loosen trade restrictions with Cuba when it passed this legislation [in 2000].”

Farmers, food processing corporations, and farm state politicians are pressuring the Bush administration. They cite job creation, high earnings, and future market potential as reasons to protect the original legislation. Co-sponsor Sen. Max Baucus (D-Mont.), who attended the Havana Trade Fair in December with Montana constituents, threatens retaliation by blocking Senate approval of Treasury Department appointments. “I am outraged at this attempt by Treasury Department bureaucrats to choke off U.S. agricultural sales to Cuba,” he said.