Cuba Business

Havana Trade Fair wrap up and US Cuba trade

Posted November 10, 2007 by publisher in Cuba Business.

By Ray Sánchez | Sun Sentinel

Cuba’s most significant trade event concludes today, although the number of U.S. companies in attendance this year dropped 30 percent to 100.

But executives representing 16 Florida firms were there again this year, about as many as attended when American food executives began participating in the fair in 2001. Cuban trade was an investment in the future, they said, even as the Bush administration tightens financial sanctions and sales dwindle.

“The biggest companies in America are here: Cargill, Archer Daniels Midland and Perdue,” said John Park Wright IV, a livestock baron from Naples whose family has traded cattle withCuba since the 1850s. “All that Cuba needs is here.”

In 2000, the U.S. Congress allowed agricultural sales to Cuba as an exception to the trade embargo imposed in 1962. The law allowed food to be sold directly to the island on a cash basis.

Cuba expects to sign nearly $450 million in contracts with firms from the United States and 52 other countries, exceeding the $432 million in deals completed at the 2006 fair. The island’s top trade partners are Venezuela, China, Spain, Canada, Italy and Brazil.

Sales of U.S. food have totaled $1.8 billion since 2001, but business peaked at $392 million in 2004. That year, the Bush administration enacted new rules making contracts harder to fulfill by requiring payment before shipment. Sales dropped to $351 million in 2005 and $337 million last year, according to the Washington, D.C.-based U.S. International Trade Commission.

Still, Florida executives peddling everything from lumber to fresh vegetables to shipping services said the state stood to gain the most if trade restrictions were eventually eased.

Arthur Savage, president of a Tampa-based shipping company that has been delivering food to Cuba for five years, said he and other Florida shipping companies doing business with Cuba already have plans to re-establish ferry service to Havana.

“We have vessels that can perform that service today,” he said. “That’s no secret. Everybody in the shipping business is looking at re-establishing those ferries. They just can’t because of the Helms Burton Act,” which strengthened the U.S. embargo and prevents the United States from normalizing economic relations as long as the Castro brothers are in power.

Wright, who is related to Savage and shared a booth with him at the trade fair, declined to comment further. “We don’t want to tip our hand,” he said.

But just watching Wright hobnob with some of the island’s most powerful men at Havana’s international trade fair was a snapshot of U.S.-Cuba trade.

He talked with Roman Catholic Cardinal Jaime Ortega about supplying dairy cows for a new seminary. He presented an award from Florida cattlemen to Fidel Castro’s older brother, Ramon, 83, an old friend and lifelong rancher.

He met with Commander Guillermo Garcia Frias, who saved Castro’s life in the Sierra Maestra, to discuss a deal to artificially inseminate about 3,000 Cuban heifers with Brahma bull semen from Texas.

Still, other Florida business people are struggling with obstacles to doing business in Cuba raised on both sides of the Florida Straits. Marcela Jimenez of Gulf South Forest Products, based in Fort Lauderdale, said more American firms stayed away this year.

“Many firms don’t have the patience and the staying power that is needed because of all the restrictions and licenses,” said Jimenez, whose business has exported about $3 million worth of electrical poles and lumber toCuba in three years. “A lot of time is wasted.”

Cuba, for instance, is not permitted to pay U.S. firms by wiring money directly to American banks. Payments must be sent to Europe in euros, converted into dollars and wired to the United States by a European bank. U.S. shipments don’t sail until payment arrives.

“People are losing hope,” Jimenez said. “We’ve been waiting for changes, but we get tighter and tighter restrictions.”

Cuba analyst Phil Peters of the Lexington Institute, a Washington-area think tank, said Cuba appears to have lost hope that U.S. agricultural firms would lead the political fight to end the embargo and travel restrictions.

“American agriculture opposes the embargo but does not work against it, for reasons that have to do with simple self-interest,” Peters wrote in his Web log this week. “This has been the case more than ever this year, with the farm bill under consideration in Congress, and with billions in crop subsidies, disaster payments and other government benefits in play.”

Wright predicted that business with Cuba would pick up after President Bush leaves office.

“Without question, a new administration and a new president will change the policy between the U.S. and Cuba for the better,” he said.

Ray Sánchez can be reached at .(JavaScript must be enabled to view this email address).

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