Posted December 12, 2005 by publisher in Cuba Business.
By ROBERT M. COOK | Fosters.com
As Maine Gov. John Baldacci and several Maine business leaders move closer to securing $10 million in contracts with Cuban officials this weekend in Havana, New Hampshire is concentrating its export marketing elsewhere.
Maine and Vermont can count themselves among 37 states that are selling millions of dollars worth of agricultural products to Cuba.
The deals began after Congress in 2000 approved an exception in the U.S. embargo for food and medicine on a cash-only basis. The U.S. has maintained an embargo against Cuba and Fidel Castro’s communist regime since 1962.
Stuart Arnett, director of the New Hampshire Department of Resources and Economic Development in Concord, said the state has focused its efforts on trading with other countries that represent stronger markets for high-tech products, medical devices and communications equipment. New Hampshire doesn’t have a strong agricultural sector like Maine and Vermont. Vermont has sold Cuba 94 registered Hereford dairy cows to rebuild Cuba’s dairy cow population, Arnett added.
Within the past year, New Hampshire Gov. John Lynch, business leaders and state officials have made trade missions to Ukraine, Germany, the Czech Republic and Chile, Arnett said. The state is also expanding its exports to China.
Exports to China have increased by 53 percent from 1999 to 2002, growing from 79 companies to 121, according to Susan Berry, director of the U.S. Department of Commerce export assistance center in Portsmouth. In 2004, New Hampshire exports to China grew 39 percent to nearly $102 million, according to the center.
China is the state’s seventh largest export market.
He said New Hampshire hosted the Cuban Commercial Council last year to talk about future opportunities, but nothing has happened yet. Arnett said if the U.S. embargo were lifted and Cuba could import more technology-related products, New Hampshire would be more willing to trade with them.
During the council’s visit to New Hampshire, Steve Taylor, director of the state’s Department of Agriculture Markets and Food, said the Cubans inquired about apples and dairy cows.
New Hampshire has 2,900 farms and 450 commercial farmers, Taylor said. But their primary market is within the state and New England, he added.
Unlike Maine which has a surplus of potatoes, lumber and other agricultural products and needs new markets, Taylor said New Hampshire’s agricultural industry is much smaller.
“We’re better off trying to help our farmers sell to markets that are right under our noses,” Taylor said.
Rob Johnson, executive director of the New Hampshire Farm Bureau Federation in Concord, said one of the reason he thinks the state has not pursued Cuba is because of the risk associated with cash-only transactions. But if a group of New Hampshire producers got together, went to state officials and wanted to sell a surplus of maple syrup to another market, Johnson added that he believes the state would try to help them ó though not necessarily by directing them to Cuba.
Doyle Marchant, president of Cedar Spring Agricultural Co. LLC in Yarmouth, Maine, and Maine’s mission coordinator, said doing business with Cuba is complicated. It took him two years to sort through the red tape, gain a license with the U.S. Treasury Department and win the trust of the Cuban government and business community before the first Maine officials traveled there last spring.
He said he believes New Hampshire easily could export some of its agricultural products to Cuba.
But he said they need an entrepreneur willing to do the legwork and organize a group of businesses. Individual businesses who think they can just go to Cuba and start selling their products without the clout of a state mission behind them would not get far, Marchant added.
“Unless you put that together in an organized way, you’re just going down there to get a little sunburn,” he said.
Marchant said since the embargo change took effect in 2001, $1 billion worth of exports from the U.S. have been signed and paid for. In November, Marchant said $200 million in contracts were signed with U.S. firms.
He said he’s hoping to secure at least $15 million in contracts for Maine companies during this weekend’s trip to Cuba.
Maine’s Legislature passed a resolution in 2002 to lift a trade embargo and normalize relations with Cuba. A year ago, a preliminary $10 million export agreement was signed by Robert Spear, then Maine’s agriculture commissioner, and Pedro Alvarez Borrego, head of the Cuban import agency Alimport.
Some contracts under that agreement already have been executed, including one that exported Maine cows to Cuba. Other producers of seed potatoes and apples are looking to complete deals during the latest mission, Marchant said.
Other potential contracts could benefit sellers of frozen fish, sardines, and alpaca wool, Marchant said.
According to the Havana Journal, an online news magazine focused on Cuba and based in South Yarmouth, Mass., the nation has gone from being ranked at the bottom of 200 countries for U.S. agricultural products to 25th place in 2004 after buying nearly $400 million of products. These include peas from North Dakota, rice from Louisiana and Texas, dairy cows from Vermont, apples from Washington State, and now potatoes, lumber and frozen seafood from Maine.
Marchant said he hopes increased exports to Cuba from U.S. companies will create the political will needed in Washington, D.C., to end the embargo. He added that he sees no reason to continue it given the fact the U.S. actively trades with communists nations like China and Vietnam.
“There are people in Cuba who need food and there are people in Cuba who need medicine,” Marchant said. “Ninety-nine out of 100 Cubans are very fine people who don’t know what Ibuprofen is, and this is ludicrous.”
Because U.S. firms only can export food and medicine to Cuba on a cash-only basis, Marchant said that makes it harder for some companies to deal with Cuba. Meanwhile, Canadian firms are free to export products to Cuba by using credit and financing agreements, which is why Canada is the number one seed potato exporter to Cuba, Marchant added.
U.S. embargo policy may not change anytime soon given the Bush administration’s position of not lifting the embargo until Cuba makes the transition from Castro’s regime to a democratic government.
Federal lawmakers still are divided over the embargo.
U.S. Sen. Susan Collins, R-Maine, who voted for the Trade Sanctions Reform and Export Enhancement Act in 2000, said she favors rethinking the embargo.
“There are still significant regulatory impediments still in place that limit agricultural trade with Cuba,” Collins said in a written statement. “I believe it is time to rethink our approach toward dealing with Cuba, and I remain committed to increasing Maine’s ability to sell Cuba more agricultural products in the future.”
U.S. Sen. Judd Gregg, R-NH, doesn’t think the U.S. should change its embargo policy until the Cuban government grants its citizens more freedoms.
“Fidel Castro has now been in power for over 40 years, and he has never held an election, tolerated other options than his own, nor allowed basic freedoms, including freedom of the press and of assembly for the citizens of Cuba,” Gregg said in a prepared statement. “He has imprisoned thousands of Cubans, and he is setting up to have his brother succeed him as a despot and a dictator, so it is hard to understand why we would reward him with lifting the embargo presently in place.”
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