By Anthony Boadle | Reuters
Cuba is considering halting purchases of American farm products worth $400 million a year because of new Bush administration rules demanding payment before shipment to the island, Cuban officials said on Wednesday.
One official said the payment rules announced by the U.S. Treasury’s Office of Foreign Assets Control on Tuesday made Cuban shipments vulnerable to confiscation by Cuban exiles with legal claims against President Fidel Castro’s government.
The new rules, opposed by farm-state legislators, take effect in one month. They will oblige Havana to pay for goods before shipment from U.S. ports instead of on delivery in Cuba.
“If they manage to obstruct trade, Cuba will find alternative suppliers,” the president of Cuba’s National Assembly or legislature, Ricardo Alarcon, told Reuters.
He said the measure would hurt U.S. agricultural producers, who have sold $790 million in food—chiefly rice, corn, chicken, wheat, soybeans and dry milk—to communist-ruled Cuba since December 2001 under an exception to trade sanctions dating from 1963.
“They are shooting themselves in the foot,” Alarcon said.
Pedro Alvarez, head of the Cuban food import agency Alimport, said Cuba would honor its commitments with American suppliers, though trade will inevitably decline if conditions become more difficult.
Cuba can buy food from the United States, but on a cash-only basis, and payments must be made through a third country due to the absence of financial ties with the United States. U.S. exporters currently ship their cargo and await payment before handing it over to Alimport in Cuba.
Cuban officials saw the new payment procedures as part of President Bush ‘s policy of tightening sanctions to undermine Castro’s government.
“Of course, we are not going to continue buying. The shipments could be seized once Cuba has paid for them,” said one Cuban official who asked not to be named.
The official said anti-Castro exiles in Miami who have won legal claims in U.S. courts against the Cuban government, could attempt to have cargoes impounded.
The measure could backfire by strengthening support for sanction-free trade with Cuba in the United States, he said. “We are delighted, because this will galvanize opposition to the embargo.”
U.S. farm-state legislators, including Republicans, have questioned the change in policy, warning that it will choke off lucrative sales.
Sen. Max Baucus, a Montana Democrat, threatened to block approval of Treasury nominees in retaliation for the new rules, while Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, said it would likely lead to a drop in agricultural exports.
The Bush administration toughened restrictions on trade and travel to Cuba last year to press for democratic change. Some observers say the goal is to inconvenience Havana and force Cuba to spend more of its scarce foreign exchange.
If Cuba stops U.S. food purchases, it could spur the U.S. Congress to approve a bipartisan Senate bill making it easier for agribusiness travel to Cuba and allowing direct transactions between U.S. and Cuban banks on food sales.