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Posted February 05, 2005 by mattlawrence in Cuba-US Trade

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Cuba signed a multi-million dollar deal on Thursday with a US dairy consortium to import powdered milk despite Fidel Castro’s recent rhetorical assault on US President George Bush.

Saturday, February 5, 2005 (Havana):

“Many of us in the United States feel that the winds are starting to change. It’s been going on nearly 50 years, so it won’t end slowly but it takes one step at a time,” said Keith Murfield, President of Dairy America.

New US government moves to reinterpret the payment system under a 2000 law allowing sales of American farm goods to communist Cuba, have threatened to slow the limited but growing trade relationship of recent years.

Line of credit

Late last year, some American companies trading with Cuba found that payments made by Cuba were not being credited to US bank accounts while US officials studied whether shipping the products before full payment is received constitutes a line of credit.

Cuban officials said they see the review as the latest in a series of attempts by the administration of US President George Bush to make the sales more difficult.

The Bush administration has steadily tightened trade and travel restrictions on Cuba in recent years.

Dramatic reduction

If the American government ultimately decides no US food products can leave port until paid for in advance by the Cuban government, deals “could be dramatically reduced” this year, said Pedro Alvarez, chairman of the Cuban food import firm Alimport.

The 2000 law provides an exception to the long-standing US trade embargo against Cuba, allowing US agricultural goods to be sold to the island on a cash-only basis.

Agricultural trade

Cuba has contracted to buy more than one billion US dollar in American farm goods - including shipping and hefty bank fees to send payments through third nations - since it began taking advantage of the exception in 2001.

While American firms making the sales do not unload their products in Cuba until payment is made, most have not insisted that payments be made into their US banks before shipments leave port.

But now, banks and the US Treasury department have questions about whether a 2000 law permitting agricultural trade with Cuba requires that US exporters be paid before shipping starts.

Treasury’s Office of Foreign Assets Control, which administers policy regarding a four-decade trade embargo against Cuba, has since let transactions proceed on a case-by-case basis. (AP

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