CubaNews / March 2003
By Larry Luxner
Over 160 executives representing 70 U.S. companies spent two days at the Mexican resort of Cancún last month, expanding on business contacts that have led to over $225 million worth of U.S. agricultural exports to Cuba in just over a year.
The U.S.-Cuba Business Conference, which also included a day in Cuba, attracted several top Cuban officials including Pedro Alvarez, president of food purchasing agency Alim-port, and Raúl de la Nuez, the country’s foreign trade minister. Also on hand were senior officials from Cuban state entities including Cimex, IHT and Cubalse.
U.S. exports to Cuba in 2002 and so far this year now total $255 million, with $210 million of that in completed transactions.
“Cuba’s purchases over the past 15 months have shown that Cuba is willing and ready to normalize commercial relations with the United States,” said de la Nuez.
Kirby Jones, president of Alamar Associ-ates and the conference’s chief organizer, told CubaNews the Feb. 17-19 event was much more relaxed than the U.S.-Cuba Business Conference held a year ago in Cancún.
“Last year’s conference took place a month after U.S. food sales to Cuba started, and nobody really knew anything. There was an edginess about it,” he said. “This time, after a year and $250 million in sales, we had a number of companies in attendance which had already done business with Cuba. There wan’t the excitement of the year before, and it had the characteristics of a normal business conference. People were much more relaxed about the whole thing.”
He added: “There was also substantial inte-rest in discussing what we, as business executives, can do to help get over some of these difficulties, such as financing and travel.”
SURPRISE MEETING WITH CASTRO
Following two days of meetings in Cancún, the U.S. executives spent one “fully hosted” day in Cuba — an arrangement designed to circumvent stringent Treasury Department rules that prevent most Americans from spending money in Cuba.
The delegates left Cancún at 5:30 a.m., flying on a chartered Mexican aircraft directly to Varadero, where they visited various hotel properties and got a quick briefing on Cuba’s oil and gas industry. The Americans were then taken by bus to Havana, where they had lunch, met various government officials and took a late-afternoon tour of the old city.
Yet the real surprise of the one-day Cuba trip was an evening meeting with Fidel Castro, who wasn’t on the agenda. Castro lectured the U.S. delegates for nearly three hours as their dinner got cold in an adjoining room, then finally apologized with a smile for “holding the Americans hostage” so long.
Besides CEOs, the event attracted Kansas Lt. Gov. John Moore, the agriculture secretaries of Delaware and Iowa, and officials from Arkansas, Georgia, Illinois, Mississippi, Nebraska, North Dakota, Texas and Washington.
FARM BUREAU TO PRESSURE CONGRESS
Steve Appel, vice-president of the American Farm Bureau Federation, said that at the 2001 conference, Cuban officials insisted on seeing trade restrictions eased before they would discuss any real business. This year, they appeared much more open to expanding on business deals while concurrently urging action on the bigger policy issues.
“Obviously, the American Farm Bureau Federation continues to be committed to normalizing trade relations with Cuba, and to try to ease the travel restrictions,” Appel said. “And of course, we urged all participants in the conference to continue to apply pressure on their congressmen and senators to get that done.”
The AFBF chief told CubaNews his group has 5.3 million member families and was recently named by Fortune magazine as one of the nation’s 20 most effective lobbying organizations.
ADM LEADS THE WAY IN U.S. FOOD SALES
Since passage of the Trade Sanctions Reform and Export Enhancement Act of 2000, U.S. companies have grabbed an 18% share of U.S. food imports. So far, Alimport has purchased over 300 agricultural items from 85 companies, ranging from Sun-Maid California raisins to Kentucky burley tobacco.
Alvarez predicted the number could rise to 60% with a complete lifting of trade restrictions — including the ability to buy food on credit and borrow money from U.S. banks.
The Cuban official noted that Alimport now has contacts with 1,000 companies in 45 states and Puerto Rico, and he praised U.S. firms selling to Cuba as competent and fair.
“They are competitive in management, quality and prices. We consider them good partners to work together and we are very satisfied with deals up to now,” said Alvarez. Nevertheless, “they don’t compete in our market as other countries do, because their regulations don’t let them.”
By far, the biggest U.S. supplier to Cuba has been Archer Daniels Midland of Decatur, Ill., which has sold 400,000 tons of soybeans, corn, wheat and other commodities worth over $70 million to Alimport since late 2001.
“This year, we hope to do better than we did last year,” said Tony de Lio, ADM’s vice-president of marketing and external affairs. Patty Judge, Iowa’s secretary of agriculture, told CubaNews that she “came home with some additional possibilties for the sale of soybeans, distillers’ grain down the road” and various types of processed foods.
“Agriculture in Iowa is a multibillion-dollar business,” she said. “We appreciate the fact that a country of 11 million people won’t ever have the market share that China or Mexico has. However, due to Cuba’s proximity and the fact they have a real need, if we can create an avenue for trade that’s easy and smooth, Cuba can be an important market for us.”
Yet de Lio warns that extending financing to Cuba could be a double-edged sword, for both small businesses that can’t offer credit, and for the Cubans themselves.
“I imagine the Cuban government would want U.S. companies themselves to provide financing or terms. But this could be difficult for a small company if they miss a payment,” he said, adding that “it could be embarrassing for Cuba if no U.S. banks come forward.”
De Lio, who has been to Cuba several times in the last three years, said he was “unimpressed” with how little many of the participants knew about the island. “A lot of people who went down there frankly don’t have a clue. Mostly, they were small businessmen who see Cuba as just another export market.”
All agreed that it was easier to pin down Alvarez and other officials in Cancún, where they were virtually a captive audience, than in Havana, where they are easily distracted.
Jones said he’s so buoyed by the results of this Cuba conference that he’s planning three more: a travel and tourism meeting in Sep-tember, an energy conference toward the end of the year, and a technology seminar in 2004.
All would take place in Cancún, since none of those sectors are covered by TRSA and getting OFAC permission to fly U.S. participants to Cuba for such events would be impossible under current U.S. law.