Gulf Shipper / November 1, 2004
By Larry Luxner
Earlier this year, 405 representatives of U.S. food companies, farm cooperatives, state agricultural commissions and non-profit groups jammed Havana's Palacio de Convenciones for four days of negotiations that generated over $106 million in contracts.
The April event, attended by Cuban President Fidel Castro, was largely a public-relations show organized by Alimport, Cuba's state-run food purchasing agency. The 173 companies attending the conference ranged from a tiny Vermont outfit hawking maple syrup to Archer Daniels Midland (ADM), a $20 billion conglomerate based in Decatur, Ill.
Many of the contracts had already been approved beforehand, with ADM and four other large commodity companies walking away with 80% of the sales.
This coming December, Alimport will host another conference for U.S. food exporters, as well as port authorities, state government agencies and others that have signed memos of understanding with Alimport urging Congress to end U.S. trade and travel restrictions against Cuba.
Yet that doesn't sit well with critics, who say the Cuban government has carefully spread its spending among scores of congressional districts in dozens of states to build political support for an end to the embargo.
Frank Calzón, founder of the Washington-based Center for a Free Cuba, says anyone who signs such an agreement ought to have to register as a foreign agent.
"By now, everybody agrees that if Fidel Castro has money to spend, U.S. companies ought to sell," Calzón told Gulf Shipper. "The problem is that American companies doing business with Cuba are often asked to sign a memorandum in which they commit themselves to work for the lifting of trade sanctions."
In September, Sysco, the country's largest food-service provider, notified Cuban authorities it would tear up an agreement signed a week earlier. The deal called for Alimport to buy Sysco products; in return, Sysco would pressure the Bush administration to relax the 43-year-old embargo against Cuba.
Sysco Food Services of Alabama had already sold $500,000 worth of canned tomatoes, ice cream and frozen produce to Cuba, said spokeswoman Toni Spigelmyer.
In late August, the CEO of that Sysco subsidiary, David Dickson, told reporters in Havana that he was working with Alimport "on a strategic plan to provide world-class food products to the tourism industry" and other potential markets in Cuba.
Yet Spigelmyer told USA Today that the parent company, based in Houston, ripped up the deal because the executive who signed it — presumably Dickson — "wasn't authorized to make a political statement."
Others that have signed advocacy agreements or MOUs with Cuba include the Indiana Farm Bureau; economic development officials from Iowa, elected officials from Idaho, Montana, California, South Carolina and Kansas, and the Ports of Corpus Christi, Mobile, Houston, Galveston, Pascagoula and Port Manatee.
"Why was it necessary for these people to sign an agreement?" demanded Calzón, a vehement opponent of the Castro regime. "They could have told the Cuban government, 'we believe in this.' But that wasn't good enough. The bottom line is, there's a law that says if one represents the interests of a foreign government, one has to register as a foreign agent."
John Kavulich, president of the U.S.-Cuba Trade and Economic Council, agrees that these deals "are a corruption of the commercial process" and hurt efforts to develop trade with Cuba.
According to Alimport CEO Pedro Alvarez, the value of U.S. food purchases since September 2001 will surpass $1 billion by the end of this year.
"Business continues, because despite everything that's happened with U.S.-Cuba relations, American law permits these exports," he said. "And ports want this business."
Under the 2000 Trade Sanctions and Reform Export Enhancement Act, U.S. companies are authorized to sell agricultural commodities to Cuba on a cash-only basis. As a result of this loophole in the embargo, Cuba — in only three years — has risen from being dead last among 225 countries on a list of U.S. trading partners to 23rd overall, and 14th in U.S. wheat purchases, eighth in frozen poultry and third in rice.
Yet not all business transactions with Alimport are the result of MOUs. In early September, Vermont's agriculture secretary, Steve Kerr, visited Havana for a week. He returned with a $7 million contract to seel nonfat powdered milk, dairy cows and apples to the Communist nation.
Kerr said Vermont was not asked to sign any MOU with Alimport regarding the embargo, and would not have signed one had such a request been made.
"It just didn't come up with me," he said.
If the embargo were lifted, Cuba would quickly become the Caribbean's largest consumer of American wheat and corn, say farm industry analysts.
Don Mason is director of grower services at the Iowa Corn Growers Association in Des Moines. He said his group looks at Cuba as an emerging market, and that it sometimes needs to make Alimport happy by participating in political events in order to win contracts.
"I would agree wholeheartedly that there's a major PR element to the way they go about this," said Mason. "They're making use of the deals they're signing for public-relations purposes. I think that's fairly obvious, and they're not trying to hide it. But that doesn't mean companies shouldn't participate."
In fact, Alimport did score a minor public-relations coup earlier this year when Pennsylvania — the 10th state to send a trade mission to Cuba, and the first one in the Northeast — pledged to lobby for an end to the embargo. In return, Alimport promised to buy $10 million worth of fresh fruit and vegetables, frozen processed food, milk, livestock feed and other food products.
At the same time, the Port of Philadelphia, once the No. 2 importer of Cuban sugar, signed a memo of understanding to reopen its docks to trade with Cuba.
"We intend to talk to our congressional delegation [in Washington] and encourage them to consider lifting the trade and travel restrictions," said Pennsylvania Agriculture Secretary Dennis Wolff, whose 18-member delegation sat through an eight-hour lunch with Castro.
In Florida, dining with Fidel would amount to heresy. In fact, anything involving trade with Cuba seems to generate angry invective in the Sunshine State.
Last year, for example, Florida's Manatee County Port Authority approved an MOU with Alimport — but only after port officials agreed to remove a 44-word sentence that would have encouraged the port to actively oppose the embargo.
Steve Tyndal, Port Manatee's director of trade development, said the MOU paves the way for more Cuba-bound shipments going through the port. So far, Port Manatee — which at only 301 nautical miles from Havana is the closest Gulf port to Cuba — has handled two shipments of an animal feed supplement totaling 6,000 tons.
"This is not a contract. It's a document which provides for mutual cooperation to attain improved trade relations," Tyndal said. "In this case, the Port Authority chose to delete a sentence."
Members of Florida's Hispanic Republican Caucus, calling the sentence "troubling," briefly discussed seeking legislation that would require Port Manatee and others who sign similar agreements to register as lobbyists for a terrorist state.
"This indicates that Port Manatee has become a lobbyist for the Castro regime," said state Rep. David Rivera after the agreement was signed. "It means they've become an agent for the Castro dictatorship."
Rubén Bonilla, chairman of the Port of Corpus Christi, said that such politically charged comments — whether at the local, state or national level — amount to pandering to the Cuban-American exile community, which generally supports the embargo.
"I really think the Bush administration is going about this whole issue with economic near-sightedness," he said. "Their latest pronouncements may be partisan in nature, and geared toward getting the [Cuban-American] vote, but those policies will not endure past November regardless who is elected president, because the surge for free trade with Cuba is inexorable."
Corpus Christi was the first port from which U.S. wheat was shipped to Cuba in 2001 following the devastation of Hurricane Michelle — but it's hardly the only Texas port pursuing trade opportunities with Cuba.
"We think the [Corpus Christi-Alimport] agreement is an indication of strong support for a continued opening of trade with Cuba," said John Peterlin, senior director of marketing at the Port of Galveston, which last year shipped over 150,000 tons of bulk food commodities to Cuba through ADM. The Texas ports of Beaumont and Freeport have also sent representatives to Cuba to discuss trade possibilities.
Earlier this year, Alimport signed an MOU with the Port of Houston, the second-largest port in the United States and the sixth-largest by size and tonnage in the world. The MOU says that both parties "renew their mutual interest and desire to work together towards expanding trading relations" between the U.S. and Cuba.
That's just fine with Marvin Lehrer, director of Latin America programs for the Texas-based USA Rice Federation. His organization, which signed an agreement with Alimport one year ago, says Cuba has already become the No. 2 importer of long-grain rice from the United States after Mexico.
This year, Alimport will buy 93,000 tons of U.S. rice — over 15% of the total volume of 550,000 tons of rice purchased abroad every year.
Lehrer concedes that in some cases, these agreements could lead to awkward situations, but insists there's nothing wrong with them in principle.
"It's not a tit for tat. It's not like they won't buy from you unless you sign this thing," he said. "No country or importer can promise any amount of trade with the Port of Mobile, Jacksonville, Houston or whatever. It's more like they'll try to give them the most business they possibly can."
Lehrer added: "I don't think these contracts make any difference. Products, price and availability remain the same. They're all vague, because there are limitations on what U.S. citizens can do, and everybody is aware of that. But I see nothing wrong with signing a friendship agreement or an MOU promising to work together to further two-way trade between two countries."