Call for cash in advance draws anger
 
By Vanessa Bauza
and Rafael Lorente STAFF WRITERS

HAVANA · While stopping short of announcing a freeze in multi-million dollar U.S. agricultural purchases, Cuba's food importing agency said the Treasury Department's new rule requiring cash in advance of U.S. shipments is an obstacle jeopardizing trade.

The practice could put exports at risk of being seized as compensation for lawsuits brought by Cuban exiles against President Fidel Castro's government and signals a new step in the Bush administration's efforts to block Cuba exports and tighten sanctions, Alimport president Pedro Alvarez said.

"To purchase from the U.S. under the new measure would be highly unreliable, for the direct food sales to the Cuban population, including its children ... would be at risk," Alvarez said Friday in his first comments since the U.S. rule was announced on Tuesday. "The U.S. Treasury pronouncement places the American producers, carriers and port operators in disadvantage and gives ground to competitors in other foreign markets."

The Treasury Department's clarification of existing trade regulations requires Cuba to pay for American agricultural exports in cash before they leave U.S. ports, rather than while they are in transit, the general practice since 2001.

Cuba has purchased $792 million in corn, rice, soy, wheat, chicken and other food products from U.S. agribusiness companies between 2001 and 2004, making it the United States' 25th largest export market, according to the New York-based U.S.-Cuba Trade and Economic Council.

On Capitol Hill, the Treasury Department's new rule has angered bipartisan farm-state legislators who argue the Bush administration is redefining international trade norms in an attempt to disrupt food exports. The rule has also sparked increased interest from Republican senators in a proposed bill that would ease restrictions on doing business with Cuba.

The bill, introduced earlier this month by senators from both parties, including Republican senators Larry Craig of Idaho, Pat Roberts of Kansas and Richard Lugar of Indiana, as well as Democratic Sen. Max Baucus of Montana, would allow Cuba to pay for U.S. agricultural products while shipments are in transit and grant permission for direct transactions between Cuban and U.S. banks, something that has been illegal for decades.

Craig said the new Treasury Department ruling could hurt American farmers and put them at a disadvantage.

"Alimport's statement further underscores our point that additional restrictions imposed by [the Office of Foreign Assets Control] may completely jeopardize U.S. agriculture products to a much-needed and growing export market," Craig said. "Simply put, backward-thinking bureaucrats buried in Cold War mentality are harming American farmers."

Council President John Kavulich, who monitors trade to Cuba, said Castro's government missed an opportunity to send Congress a stronger message that it would not continue to tolerate tighter trade restrictions by announcing it would halt purchases altogether.

"Today Cuba is vacillating when it shouldn't. There should be a firm response and the response should be until the Bush administration reverses its payment rule ... Cuba will purchase no more food products," Kavulich said. "Until the Cubans say enough, the Bush administration keeps doing what it wants because there are no consequences."

Embargo supporters backed the Treasury Department's ruling, saying it clarified a gray area in the Trade Sanctions Reform and Export Enhancement Act, which legalized Cuba food sales in 2000.

"The congressional intent of the legislation was always cash in advance," said Rep. Ileana Ros-Lehtinan, R-Miami. "I don't know how it got twisted around ... In advance means before any movement of the goods takes place.

"Behind all of this is just a drive by multi-billion dollar agribusiness ... to break the back of the embargo," Ros-Lehtinen said.

The new rule will take effect in one month. Alvarez said he feared food shipments could be seized before they leave American ports to pay for pending U.S. settlements against Cuba.

The seizure of Cuban property does have a legal precedent. In 2002, a judge ordered the seizure of a Russian-made Antonov AN-2 that was used by eight Cuban defectors to fly to Key West. Proceeds from the sale of the airplane were to go to Ana Margarita Martinez as partial payment for a $27.1 million settlement she won against the Cuban government under an anti-terrorism law. Martinez sued saying she had been used as a pawn by the Cuban government and her ex-husband, Cuban spy Pablo Roque.

Vanessa Bauza reported this story from Havana and can be reached at vmbauza1@yahoo.com

Rafael Lorente reported this story from Washington and can be reached at rlorente@sun-sentinel.com or 202-824-8225.

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