http://havanajournal.com/politics/entry/cuba_reacts_to_new_restrictions_on_us_agriculture_purchasing_payment_system/

HavanaJournal.com: Cuba Politics

Cuba reacts to new restrictions on US agriculture purchasing payment system

Posted February 24, 2005 by publisher in Cuba Politics.
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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.

Member Comments

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On February 24, 2005, publisher wrote:

The “straw” will come that will break the “camels back”.

Question is…what is the camel? The US Embargo or Fidel Castro’ regime?

US Embargo: President Bush may be more loyal to Cubans in Miami than any farm state republicans but how long will he be able to hold out?

Fidel Castro: He is more interested to make points against any US Administration using any tightening of trade restrictions (with good reason many will agree) to “rage against the machine”. More fuel added to the fire and Castro likes the heat.

Does the Bush Administration or senior Cuban exiles think that Castro will offer the first olive branch?

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On February 24, 2005, Dana Garrett wrote:

Bush and some Cuban exiles erroneously believe that if Cuba is severed from the USA, it will be severed from the rest of the world.  Cuba will simply buy its food elsewhere.  Perhaps it should. 

If the Cuban government can cobble together a set of trading relationships w/ other nations that do not require any connection w/ the USA and also survive the death of Castro, then this will be a strategic catastrophe for the USA.  It will demonstrate that the USAís 45 plus year attempt to effect “regime change” through sanctions and increasing isolation has utterly failed.  It will also become an example to other governments and peoples that dependence on or deference to the USA isnít necessary to maintain national sovereignty.  The USA will have shot itself in the foot. 

The only danger resulting from severing the last economic tie to Cuba is what options will the extremists in the Cuban exile community demand after this sanction fails to topple the Cuban government?  Increased propaganda, domestic spying, and terrorism in Cuba?  Invasion?  The less options available to them, the more dangerous they can become.

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On February 26, 2005, PABLOPUEBLO wrote:

Hey! Severing trade with Usa make more difficult the cuban
economy hardships,that is blatant.Yet,Cuba could find new
suppliers.However in the pure american business is not good
for the american farmers to lose the cuban market,now ranks
among the first 25.Then seeing the situation as a whole is a
bad decision for the americans and for the cubans the enacted
bill over the payment for goods by the American tressury.It is
like others decisions,just bad policy.

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On February 27, 2005, I-taoist wrote:

A phone call to the White House

“Tell us what in the world to make of this new tactic toward food sales to Cuba Mr. Bush:  OK.  Let’ see now…Mr. Castro and the communists are totally bad, the U.S. and your administration are totally good, right?  Correct.  So we now impose another burden on Cuba,s ability to buy food from America’ bread basket, possibly having the effect of stopping all U.S. food shipments to Cuba, so their food will cost more. Correct? Yes. I see, so, in effect, we help further famish the Cuban people, contribute to their present level of suffering and malnourishment, so they will hate Castro and love us, right?  And, oh yes, we also diminsih our own export sales, deprive our farmers of a close market, and increase our present huge trade dificit… to further hurt Castro, right?” 

Yea, right.