BY TIM JOHNSON

 WASHINGTON -- Reeling from its worst hurricane in nearly half a century, Cuba has politely turned down a U.S. offer of disaster relief, challenging the United States instead to ease what it says is red tape on the export of U.S. food and medicine to the island.

 Cash-strapped Cuba said it would pay hard currency for the U.S. goods. It proposed that Cuban vessels be allowed to enter U.S. seaports to pick up the goods.

 The State Department said Washington would not accept the Cuban request.

 The unusual diplomatic exchange marked the latest jockeying between the two capitals in a week that also saw U.S. legislators give new indications that they want to
 relax a 4-decade-old U.S. embargo of Cuba.

 Hurricane Michelle, a Category Four storm with winds of 135 mph that barreled across central Cuba on Sunday, flattened sugar cane and citrus fields, destroyed
 thousands of homes, and knocked out water, power and telephone service to large swaths of the island. Rapid evacuation of 700,000 people kept the death toll to five.

 While other hurricanes have been more deadly, ``none has provoked economic damage of [this] magnitude,'' Vice President Carlos Lage said Thursday night.

 Lage said that nearly six million of Cuba's 11 million people were affected by the hurricane, which damaged 1,500 schools and knocked down 125 electric pylons.

 The initial U.S. offer of aid and the Cuban response were couched in polite language that appeared designed for political effect as well as genuine concern.

 In a diplomatic note given to Cuban officials in Havana and Washington on Wednesday, the State Department offered to send a three-person team from the Office of Foreign Disaster Assistance to assess the damage. Officials also offered humanitarian aid, as long as the assistance was not channeled through the Fidel Castro
 government.

 `LEGITIMATE CONCERNS'

 ``We have legitimate concerns for the Cuban people here. We are not trying to game this thing,'' said a State Department official, speaking on condition of anonymity. ``Our focus as we proceed is to ensure that any U.S. efforts to help the Cuban people are not misused by the regime to benefit the Cuban government.''

 On Thursday night, the Cuban Foreign Ministry issued a carefully worded statement politely declining the ``respectful and friendly'' U.S. offer.

 Instead, it cited ``innumerable laws and specific regulations'' on U.S. sales of food and medicines to Cuba and asked that the bureaucracy be eased to permit the Castro government ``to acquire on an expedited basis a certain quantity of food, medicines and raw materials for producing them.''

 A veteran observer of bilateral relations, John Kavulich, president of the U.S.-Cuba Trade and Economic Council, said the Cuban counteroffer contained ``a shrewd political strategy'' that carries risks. If Cuban officials provide a specific list of goods they want, and set reasonable prices for the goods, U.S. agricultural interests will clamor for Washington to accept, he said.

 ``It will put the Bush administration in an immensely uncomfortable position in respect to saying `No,' '' Kavulich said, noting the ``substantial national constituency
 wanting to do business with Cuba.''

 However, if Havana doesn't specify the desired goods and prices, frustration may mount among U.S. companies that Cuba isn't serious about buying U.S. goods.

 EMBARGO EASED IN 2000

 Congress loosened the U.S. embargo last year to allow U.S. food and agricultural sales to Cuba, as long as purchases satisfy certain licensing requirements and are not financed by the U.S. government or U.S. financial institutions. In July, the Commerce Department set the licensing regulations. Since then, no sales of any size have occurred. Cuban officials portray the bureaucratic requirements as onerous.

 Last Wednesday, the Senate Agriculture Committee agreed to allow private U.S. financing of food sales to Cuba -- a new sign that some lawmakers see Cuba as a
 potential market.

 Cuban-American legislators from South Florida assail such softening toward Castro. Rep. Lincoln Diaz-Balart, a Miami Republican, blasted the Cuban counter-offer to buy U.S. food and medicine.

 ``Castro does not care about aid for the people,'' he said. ``He only wishes to increase pressure for ending the embargo in order to obtain financing and tourism dollars.''

 Cuba's offer to pay cash for imports is unusual given the one-two whammy caused by a recent global economic slowdown and by devastation from the hurricane. Tourism receipts are down, and dozens of hotels have been shuttered. Remittances back to the island from emigrants have also fallen.

 Some 20 percent of the citrus crop reportedly was destroyed by the storm, which also flattened one million acres of sugar cane. Prices for nickel, a key Cuban
 commodity, are less than half of what they were in May 2000.

 Last month, Russian President Vladimir Putin announced that he would close a major electronic listening post at Lourdes in Cuba in January, ending a revenue flow of some $200 million for the island.
 

                                    © 2001