Posted March 15, 2005 by publisher in Cuba Business.
Orlando Sentinel | By Paolo Spadoni | Special to the Sentinel
The Treasury Department’s Office of Foreign Assets Control has just announced new trade guidelines that reinterpret payment procedures for U.S. food exports to Cuba. In October 2000, the U.S. Congress authorized cash-only sales of American food items to the island under the Trade Sanctions Reform and Export Enhancement Act. Since shipments to Havana began in December 2001, American firms have sold more than $790 million worth of wheat, poultry, corn, rice and soybean products to Cuba, making it the 25th-largest agricultural market for the United States.
Now, after more than three years of lucrative sales, the Office of Foreign Assets Control has decided that Cuba must make cash payments before the goods leave the United States rather than before they arrive at Havana’s port.
More restrictive payment procedures, which raise costs and create severe logistical problems, mainly aim to disrupt commercial practices that are increasingly at odds with the Bush administration’s attempt to squeeze economically the communist island. Forced to spend more of its scarce foreign exchange and fearing possible confiscations of its shipments, still in U.S. ports after payments have been made, the Castro government has warned that it could halt purchases of U.S. food.
The new export rules, therefore, have implications well beyond the mere interpretation of cash payments. By jeopardizing U.S. food sales to Cuba, the Office of Foreign Assets Control’s unilateral action clearly defies the will of Congress and sparks a rift between the White House and Capitol Hill on the general direction of U.S. policy toward Havana. The passage of the trade bill in 2000 represented a change of strategic beliefs and policy preferences with respect to Cuba. Many Republicans and Democrats in Congress began to realize that incremental sanctions, imposed with the Torricelli law of 1992 and the Helms-Burton law of 1996, had done little to undermine the Castro government while hurting U.S. companies in terms of forfeited business with the island. They successfully pushed for a relaxation of trade restrictions that would benefit U.S. producers and enhance American influence on Cuba.
Just to cite a few emblematic examples, U.S. Sens. Max Baucus, D-Mont., Pat Roberts, R-Kan., Byron Dorgan, D-N.D., and Arlen Specter, R-Pa., who had previously supported a strengthening of sanctions against Havana, have become leading advocates in Congress for the removal of trade and travel restrictions on Cuba. Baucus and Roberts, who had voted for Helms-Burton, now argue that the Cuban embargo is a “hopelessly ineffective tool” and that agricultural exports to the island “help U.S. farmers, feed hungry people and spread the seeds of democracy.”
Dorgan and Specter’s rethinking of U.S. policy toward Cuba is even more evident. In 1992, then-U.S. Rep. Dorgan was one of the co-sponsors of the Torricelli bill, and he also voted for Helms-Burton four years later. In September 2001, after successfully leading the effort in Congress to lift the ban on U.S. food sales to Cuba, he declared: “We are really shooting ourselves in the foot with a continued embargo that does not work and, in a bizarre way, actually helps Fidel Castro keep his hold on power. . . . Using food and medicine as a weapon is, in my view, entirely immoral.”
Similarly, in June 1995, Arlen Specter commended the authors of Helms-Burton for introducing it and noted that it was very important “to put the maximum pressure on Fidel Castro, the dictator of Cuba, to try to achieve his ouster at the earliest possible time.” More recently, however, Specter has made abundantly clear that the United States should not wait for a change of power in Cuba to cultivate exchanges that can benefit both countries.
In short, it is likely that the Office of Foreign Assets Control’s new rules on cash payments for U.S. food exports to Cuba will galvanize anti-embargo forces in Congress. Facing a potential drop of multimillion-dollar sales, a bipartisan group of 22 U.S. senators (including Baucus, Roberts and Dorgan) has already introduced a new legislation that would ease trade restrictions with Cuba by defining cash in advance as payment before delivery, allowing direct transactions between Cuban and U.S. banks, and facilitating U.S. travel to the island for business purposes.
As the greatest leverage to seek a relaxation of sanctions lies in the hands of worried but delighted Cuban officials who are threatening to choke off purchases worth almost $400 million a year, the Bush administration’s latest attempt to increase economic pressure on Cuba could easily backfire in Congress.
Paolo Spadoni is a Ph.D. candidate in the Department of Political Science at the University of Florida. He wrote this commentary for the Orlando Sentinel.
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