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HavanaJournal.com: Cuba Business

Doing Business With Havana Cuba

Posted April 21, 2004 by publisher in Cuba Business.
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CBS News

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Pedro Alvarez, chairman of Cuba’s food import agency, Alimport, right, and California Copngresswoman Loretta Sanchez in Havana (Photo: AP)

It used to be called “trading with the enemy” and still is, in some quarters. But a growing number of U.S. businessmen, like Florida rancher John Parke Wright IV, say they’re selling to their “amigos Cubanos.”

Over 400 Americans, representatives of large-scale agribusiness firms like Cargill, Inc. of Minnetonka, Minnesota, small family-operations like Kaehler Homedale Farms also of Minnesota and of U.S. ports and shipping companies are in Havana for trade talks this week.

Their negotiating partner here, Pedro Alvarez, CEO of Cuba’s agricultural products importing firm, ALIMPORT, said he expects to sign contracts worth an estimated $100 million.

Several were signed Tuesday, including one for $8.9 million worth of corn from the Decatur, Illinois-based Archer Daniels Midland; and one for $3.4 million in rice from Riceland Foods, Inc. of Arkansas.

Since 2000, American companies have been traveling to Cuba nearly every month exploring trade potential and signing deals. That year, Congress approved the Trade Sanctions Reform and Export Enhancement Act that allows sales to Cuba on a strictly cash basis.

ALIMPORT said it has paid $644.6 million for goods purchased from U.S. suppliers since 2001. That figure includes shipping costs and payments to third country banks since U.S. trade sanctions prohibit any financing by U.S. institutions.

John S. Kavulich II, head of the New York-based U.S.-Cuba Trade and Economic Council, which monitors these sales, puts the figure at closer to $430 million. He said shipping costs don’t count.

Alvarez, however, insists that U.S. companies are profiting from that also. “Around 70 percent of the ships bringing U.S. goods to Cuba are owned by American shipping interests,” he said.

Kavulich takes umbrage with other aspects of the trading. He told CBS News the current gathering “while commercial on its face, is purely a political event ...”

Stuart E. Proctor, Jr., president and CEO of the USA Rice Federation, disagreed. He said: “We want to get back our former No. 1 export market so we are doing what we can to regain it.” That means, he said, “We need to work with our own officials in the U.S. to eliminate barriers to trade.”

The Federation, which represents 85 percent of U.S. rice production, is active in what Proctor described as a “very big lobby effort” in Washington. The only unusual thing in this case, said Proctor, is that the “barriers are not in the importing country, but in the U.S.”

Another participant in the talks, who asked not to be identified, told CBS News, “This week is a public relations show mounted by ALIMPORT. How could we say no to the invitation to attend?” However, he admitted it “does tend to focus the Cuba issue”.

Individual companies, he pointed out, “come down all the time to sign accords, to negotiate, but don’t get media attention. This is a way to do that.”

For his part, the chief of the U.S. Interests Section in Havana, James Cason, said, “American agricultural producers are getting the best deal possible with Cuba right now” because all the trade is on a cash basis. “Many non-U.S. companies that have extended credit to Cuba have not been paid,” he noted.

Cason also charged that Cuba “is seeking to manipulate the U.S. political process by linking purchases of U.S. products to support for its political objectives”.

Furthermore, he said in a statement to CBS News: “Far too little of what Cuba purchases from the U.S. goes to the benefit of the average Cuban consumer.”

ALIMPORT’s Alvarez disputed that, claiming, “95 percent of the U.S. food products imported by Cuba go to the state-subsidized basic food basket”.

Florida rancher John Parke Wright, who is currently negotiating a small deal to sell 50 head of New York dairy cattle to Cuba, told CBS News: “Cubans want the dairy cattle for their ice cream industry. Who can justify denying ice cream to Cuban children?”

Parke Wright, whose family was shipping cattle from Tampa, Florida, to Cuba back in the 1850s, is unperturbed that the Cuban government nationalized his family’s 15,000-acre ranch in eastern Cuba after Fidel Castro took power.

He has sold the socialist island 148 head of dairy cattle so far. His plan to send 250 Florida beef cattle to Cuba has been held up because of the mad cow scare in the U.S., but he expects it to go ahead some time soon.

CBS News Foreign Affairs Analyst Pamela Falk, who worked with American farmers when they began efforts to sell to Cuba a decade ago, has seen “sales to Cuba by U.S. farmers grow dramatically despite increased tension between Washington and Havana.”

Kirby Jones, head of Alamar Associates, and another pioneer in bringing U.S. business interests down to the Island agreed.

“We have six months of the hottest rhetoric in my experience. As hot as it gets ... but here we have 400-plus breadbasket representatives, a Republican Congressman [Butch Otter, Idaho], a former F16 pilot [Lt. Gov. Brian Dubie of Vermont], and farmers from all over America, essentially saying ‘We don’t agree with this [U.S. Cuba] policy.’”

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Portia Siegelbaum has been the CBS News producer in Havana since February. She has covered the story of Cuba for more than 10 years. During that time, she worked on a number of documentaries on Cuba for Discovery and the BBC.

Member Comments

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On April 21, 2004, publisher wrote:

Portia, this is a well balanced story.

You did a great job of letting each person articulate their own views.