Posted December 06, 2004 by publisher in Cuba Business.
By James Varney | Staff writer | NOLA.com
A handful of Louisiana officials and businesspeople are planning the state’s first trade delegation to Cuba in nearly 50 years, but the four-day tour next week to the Communist isle has elicited some local grumbling.
State Secretary of Economic Development Michael Olivier is slated to lead 14 people to Havana on Dec. 14. That group, along with contingents from other states such as Alabama, will attend a conference marking the third anniversary of relaxations in the trade embargo that allow the sale of U.S. food and agricultural products to Cuba.
Olivier’s proposed journey drew a rebuke from New Orleans lawyer George Fowler, the general counsel of the Cuban American National Foundation and a prominent critic of dictator Fidel Castro.
Calling Olivier a “headline-grabber,” he chided him for his intent to “go visit a terrorist state,” referring to Cuba’s official designation by the U.S. State Department as a terrorist-supporting country.
The Havana trip is sponsored by Alimport, the Castro regime’s agency in charge of food and agricultural trade. The conference is scheduled each December to mark the anniversary of the first shipment to Cuba under new embargo rules: a 30,000-metric-ton cargo of corn that departed from the port of New Orleans in 2001. New Orleans was chosen as the port of departure because, before Castro’s toppling of strongman Fulgencio Batista, it was Cuba’s largest trading partner.
Castro usually attends the conference, and in past years has made a point of hosting luncheons with individual delegations. It’s unclear whether the Louisiana contingent will meet with him.
‘These are political events’
The annual conferences are regarded as something of a sham by some Cuban experts.
“They are a corruption of the commercial process,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a nonprofit clearinghouse for information on trade issues with Cuba. “These are political events, and it is not necessary for businesses to attend.”
Although Kavulich’s organization says it does not take political positions, Fowler regards the council as a champion of increased ties with Castro, and he tangled with Kavulich twice when he was invited to speak at the World Trade Center in New Orleans. Despite those confrontations, Kavulich appeared to be in agreement with Fowler on the dubious nature of the Alimport spectacle.
“Cuba puts pressure on U.S. businesses to attend these meetings so the government there can present them as increasing numbers in opposition to U.S. policies,” Kavulich said. In particular, he cited “advocacy agreements” Castro’s regime typically urges state delegations to sign, agreements that ask delegations to lobby for further easings in the embargo in return for business deals in Cuba.
“They’re about as quid pro quo as it gets, and the Treasury Department is increasingly skeptical of them,” Kavulich said, noting the council opposes such deals and that some states, such as Vermont, pointedly refused to enter into them and still landed business.
Exports to Cuba growing
That food and agricultural exports to Cuba have increased since December 2001 is beyond dispute. In that first month, Cuba bought $4.3 million in food and agricultural products, ranking it 144th out of 226 global agricultural export markets for the United States, according to government figures.
Since then, more than $714 million of those items have been exported to Cuba, and in 2003, the most recent full year for which statistics are available, it bought $256.9 million, ranking it the 35th-largest market.
Louisiana’s place in that trade is considerable. The state’s deep-water ports are the departure point for roughly half of all food and agricultural products bound for Cuba, which, in turn, comprise 95 percent of all exports to the island. Under approved changes to the embargo, only food and agricultural or medical products are allowed to be traded, along with minuscule amounts of other commodities, such as wood products or paper.
There might be room for local growth in those smaller areas, some trade experts say.
“Just by judging from the statistics, it does appear that Louisiana’s place in the export of goods could get bigger,” said Gene Schreiber, executive director of the World Trade Center in New Orleans.
Kavulich noted, however, that 15 companies account for 90 percent of all agricultural sales to Cuba, and, of that number, three companies, led by the giant Archer Daniels Midland, account for 70 percent. Thus, the market is a tough one to crack for smaller entities.
Foot in the door?
At least six companies are set to accompany Olivier to Havana. One of them, Buras Agriculture and Specialty Feeds in Bogalusa, is a subsidiary of Cargill Inc., the No. 2 seller to Cuba, but others are hoping to enter the field. The most promising, said Felipe Martinez, a deputy to Olivier and a Cuban-American who is handling the Havana trip’s details, is an Alexandria outfit that sells telephone poles, an item the Cuban government has specifically requested recently.
When he announced the trip last week, Olivier said it would mark but one in a flurry in the coming months, and both he and Martinez said Gov. Kathleen Blanco may lead a formal delegation next spring.
Olivier is no stranger to Cuba, having visited the Communist nation several times when he ran the Harrison County Economic Development Commission in Mississippi.
Other officials who might be expected to participate appear unlikely to do so this time. For example, Gary LaGrange, president of the Port of New Orleans, will not attend, both because the trip coincides with a scheduled meeting of the port’s board of commissioners and because his visa for travel to Cuba lets him make only one visit every 12 months, and he went there earlier this year. Port officials said they think LaGrange could have gone under the umbrella of the Department of Economic Development but that he had declined to do so.
One of the private members of the delegation is Harlon Pearce, owner of LA Fish LLC in Kenner and chairman of Louisiana’s Seafood Promotion Board.
Pearce, who already has an international presence through operations in Asia, is hoping to make wholesale seafood deals with Cuba. Since Castro’s dictatorship gets a cut of any deal, Pearce acknowledged some moral qualms about doing business in Cuba, but he argued the ripple effect of increased commerce is a net boon for the Cuban people.
“I think Castro’s time is just about up, and I look at this as something that can help Cuba and the Cubans,” he said. “Someone’s got to be in there first, and there’s no reason we should have a closed mind-set about this or stick our heads in the sand.
“I don’t have any expectations about all of this,” he added. “I’m looking at it as a fact-finding mission, and I’m grateful the state is doing anything to try to boost business.”
Last week, Fowler hosted a three-day conference on Latin American affairs under the aegis of Tulane University’s law school, and he is frustrated Olivier didn’t attend.
“We can do business with all these countries who are coming to visit us, and he’s not going to come here?” Fowler said, echoing the puzzlement of some other attendees.
Representatives of several New Orleans companies circulated through the Tulane conference, and other state officials appeared to pitch Louisiana, most notably Lt. Gov. Mitch Landrieu. He delivered a luncheon speech Wednesday stressing the state’s desire to increase investment here by Latin American companies and to expand trade opportunities. Landrieu declined to comment on either the proposed delegation to Havana or Olivier’s absence.
Olivier could not be reached for comment, but Martinez said no slight of Tulane’s Latin American Law Institute or the attendees was intended. Olivier planned to attend the conference in September, when it was originally scheduled. Hurricane Ivan forced a postponement, and Martinez said Olivier could not make it this time.
In addition, the Cuba trade delegation is one of several to Latin American nations already completed or planned, Martinez said.
“No one is getting neglected,” he said. “The state has made an effort to work with all these countries.”
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