CubaNews / February 2005
By Larry Luxner
Washington lawmakers have introduced a bill to expand the sale of U.S. farm products to Cuba, and observers say it enjoys a reasonably good chance of passing.
The Agricultural Products Export Facilitation Act of 2005 — announced Feb. 9, just as this issue of CubaNews was going to press — clarifies Congressional intent on an earlier piece of legislation, the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).
The new bill, introduced by Sen. Larry Craig (R-ID), Max Baucus (D-MT), Pat Roberts (R-KS), Richard Lugar (R-IN) and about 20 other co-sponsors, mostly from farm states, contains the five following provisions:
*clarifies Congress’ intent to legally sell farm goods, as authorized by TSRA, by defining “cash payment in advance” as receipt of payment before transfer of title and release of physical control of goods to the Cuban government.
* authorizes the issuance of a general license for U.S. agricultural producers to travel to Cuba to sell, market and finalize any sales or trade agreements — in much the same way journalists are now free to travel to Cuba without a specific license from the Treasury Department’s Office of Foreign Assets Control (OFAC).
* authorizes Cuba to make direct payments to U.S. banks. Currently, Cuban food purchasing agency Alimport is forced to use European banks for transactions, which often add up to 5% of the overall price.
* repeals Section 211 in order to protect U.S. trademarks registered in Cuba, and bring the United States back into compliance with the In-ter-American Convention and WTO obligations.
* urges the need for the “expeditious issuance” of temporary visas to Cuban nationals who, pursuant to TSRA-authorized purchasing activities, must inspect certain products such as beef, poultry, seed potatoes, etc., prior to shipment of goods.
“Cold War-era sanctions and restrictions have a track record of hamstringing Ameri-can farmers, ranchers, and producers,” said Craig, whose state is eager to sell Idaho potatoes to hungry Cubans. “Introducing Cuba to the American free-market and capitalism is the only way to bring about reform. Consequently, four years ago we joined forces to open up Cuba to establish a new, one-way market for our agriculture sector. Today, I will not allow bureaucrats to re-interpret Congress’ original intent and obstruct already established legal trade.”
Added Bob Stallman, president of the American Farm Bureau Federation: “Enactment of this legislation would result in increased trade with Cuba through the simplification of the license process, reducing transaction costs for those sales, and [by] allowing Cuban agricultural inspectors into the United States to inspect U.S. facilities selling to Cuba. Lastly, the legislation would help maintain the United States as a reliable supplier to Cuba.”
Before the original legislation was enacted, Cuba ranked 226th in purchases of U.S. farm goods. Today, it’s No. 21, thanks to more than $1 billion in imports since TSRA’s passage. In fact, Cuba now ranks as the world’s second-largest importer of U.S. rice and the third-largest importer of U.S. poultry.
For this reason, 10 GOP lawmakers have jumped to co-sponsor the bill, including Jim Talent (Missouri), Chuck Hagel (Nebraska), John Thune (North Dakota), Kay Bailey Hut-chison (Kansas) and Mike Enzi (Wyoming).
“To my knowledge, there’s never been a Cuba-related bill introduced with this many Republican co-sponsors,” said Robert Muse, a Washington lawyer specializing in Cuba matters. “It’s particularly interesting that it has so much support from mainstream Republicans, from both prairie and mountain states.”
The bill also has strong support from farm-state Democrats, including Blanche Lincoln and Mark Pryor (Arkansas), Tim Johnson (South Dakota), Mary Landrew (Louisiana), Ben Nelson (Nebraska), Tom Harkin (Iowa) and Patty Murray (Washington).
Muse said the measure has a “good chance of passing” because it’s not a policy bill. “The policy was determined in 2000 with passage of TSRA. That’s when Congress said it not only authorized but wished to encourage agricultural exports to Cuba. This bill is meant to facilitate those exports in two different ways: it removes any ambiguities that may have developed around the TSRA’s language, and secondly, it seeks to clarify congressional intent in promoting these exports.”
In recent months, disagreement over whether Cuba must pay before food shipments leave U.S. ports rather than upon their arrival in Havana has led some banks to delay crediting Cuban payments to the accounts of U.S. exporters.
That, according to Washington consultant Kirby Jones, has affected business.
“Alimport is still buying, but they are concerned about the reliability of supply coming from the United States — not because of any problem with any company, but simply because of the uncertainty and the lack of final resolution of this issue,” he said.
The proposed bill would end that uncertainty by letting Cuba pay after the shipments leave U.S. ports. It would also direct OFAC to allow direct banking transactions between Cuban and U.S. financial institutions for the first time since the early 1960s.
Currently, U.S. food exporters must wait about 72 hours to be paid through a third-country bank such as BNP Paribas of France. The new legislation would allow them to be paid through a U.S. bank in a matter of hours.
Alimport’s chairman, Pedro Alvarez, said his entity has spent $1.043 billion on U.S. food imports since TSRA’s passage, including $474 million in 2004 alone.
About 90% of Cuban purchases have been for grains, cereal and poultry from a dozen U.S. companies led by Archer Daniels Midland Co., Cargill and FC Stone, with smaller purchases from another 120 U.S. firms.
Alvarez told reporters Feb. 3 that Cuba will continue buying U.S. food, though he warned that “if restrictions are tightened, trade would be dramatically reduced.”