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HavanaJournal.com: Cuba Business

Cuba business and the politics of doing business with Cuba

Posted October 05, 2004 by publisher in Cuba Business.
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BY NANCY SAN MARTIN | .(JavaScript must be enabled to view this email address) | Miami Herald

A Houston company’s recent cancellation of an agreement with Cuba has sparked new complaints about Havana’s insistence that Americans wishing to sell products to Cuba should first agree to push Washington to ease economic sanctions against the communist-ruled island.

The nonbinding ‘‘advocacy agreements’’ have been multiplying since Cuba began importing U.S. food and food products in 2001, following crop damage from Hurricane Michelle.

The United States is now Cuba’s largest source of food and agricultural imports, with sales of about $677 million.

Although the agreements have been criticized by supporters of U.S. sanctions against Cuba as a veiled form of blackmail, they were signed by at least four members of Congress, the governor of Kansas and several agricultural associations.

But in recent months, U.S. businesses have been privately grumbling that Alimport, Cuba’s food-importing monopoly, has increased pressure for political cooperation.

Americans who have exported food products to Cuba or wish to do so report that they ‘are receiving pressure . . . to be `more public’ and ‘more forceful’ about their opposition to the United States policy,’’ the New York-based U.S.-Cuba Trade and Economic Council reported recently.

NO VIOLATIONS

Americans also ‘report that representatives of Alimport have decreased purchases from . . . [U.S.] companies whose `commitment’ to a change in United States policy . . . is suspect; or have stated that products would be sourced from those United States-based companies that ‘support our position,’ ‘’ the USCTEC report added.

Defenders of trade with Cuba point out that the agreements do not violate U.S. laws and said the agreements are simply efforts to promote increased trade, to the benefit of American producers.

‘‘The trade that we are talking about is already a United States law,’’ said Rep. Loretta Sánchez, D-Calif., who with her sister, Rep. Linda Sánchez, D-Calif., signed an agreement with Alimport. “Part of what I do as a congresswoman is help my farmers sell their products.’‘

The long-simmering issue erupted after the Houston-based Sysco Corp., announced on Aug. 23 that it was rescinding its advocacy agreement with Alimport.

The move meant the nation’s largest food service provider lost a deal to provide Cuba with $500,000 worth of goods.

Such limited sales are allowed under a 2000 law that requires Cuba to pay the U.S. providers in cash.

Sysco did not return Herald phone calls, and efforts to reach the Cuban Interests Section in Washington were unsuccessful.

Cuba has long directed its purchases of U.S. goods toward firms and states it hopes will influence Capitol Hill to ease the U.S. trade and travel restrictions. But the advocacy agreements go a step beyond.

‘‘These agreements are a corruption of the commercial process,’’ said USCTEC President John Kavulich. “Once you include an advocacy clause, they’re no longer commercial agreements, they’re political documents.’‘

FOREIGN AGENT

Some critics also say that any American who signs an advocacy agreement should be required to register as a foreign agent since the person or company would have promised to lobby on behalf of the Cuban government.

A U.S. Department of Justice website describes the Foreign Agents Registration Act of 1938 as applying to “any individual or organization . . . who represents the interests of a foreign principal before any agency or official of the U.S. government.’‘

However, those pursuing business deals with Havana say the agreements, also known as ‘‘memorandums of understanding’’ or ‘‘joint communiques,’’ are merely goodwill gestures among trading partners.

‘‘Foreign lobbyist registration should not be required any more than for any public official who advocates the benefits of improved relations or a change in U.S. policy toward any other nation,’’ Idaho Republican Rep. C.L. ‘‘Butch’’ Otter, who signed one of the agreements earlier this year, said in an e-mail to The Herald.

A `FRAMEWORK’

‘‘It’s important to note that this only provides the framework for future negotiations; it is not a contract or even an agreement,’’ added Steve Hollister, a spokesman for Port Manatee.

The port’s executive director, David McDonald, signed an agreement with Cuba last November stating his ‘‘intention to work toward free and unrestricted travel and trade relations’’ between Cuba and the United States.

But the port’s governing entity later voted to reject that language, Hollister said.

Port officials are nevertheless pursuing contracts with Cuba that would allow Port Manatee to accommodate cargo en route to the island, Hollister added.

Member Comments

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On October 05, 2004, Jesus Perez wrote:

It is only common sense that Cuban officials would look to do business with companies that are more sensitive to the interests of the Cubans. As far as individuals who represent these U.S. companies having to register as agents of a foreign govt., it seems to me that then the majority of the members of the House of Representatives and the Senate should also register that way, since all favor an end to some, if not all, of the ridiculous restrictions we now have in place against Cuba.