Wednesday, March 28, 2007

Cuba says U.S. rules limiting food trade

Cuba says U.S. rules limiting food trade
By Esteban Israel
Wednesday, March 28, 2007; 2:35 PM

HAVANA (Reuters) - Cuba signed up to import more U.S. food products this
week but said payment procedures introduced by the Bush administration
in 2005 were hindering trade and forcing it to make deals with other

Cuba has been importing food like rice and chicken from the United
States since 2000, when cash-only food sales were permitted as a
exception to the U.S. trade embargo, turning Cuba's ideological foe into
its top foreign supplier.

Cuba's food import agency, Alimport, this week signed new contracts
worth $60 million with a delegation from the U.S. state of Nebraska, to
import mainly wheat, pork and soy beans.

Yet Alimport head Pedro Alvarez said procedural rules imposed in 2005
made the United States an unreliable supplier and had driven Cuba to
look to other countries.

"We've been obliged to divert several hundreds of millions of dollars,"
Alvarez told reporters after the new contracts were signed late on Tuesday.

He said rules, including a stipulation that Cuba must pay before cargo
ships leave U.S. ports rather than before unloading in Havana, were an
obstacle to increasing food imports.

"The North American companies, which are efficient, are in many cases
unreliable for us, because you don't know when a shipment is going to be
held up," he said.

In six years, Cuba has become the 34th largest market for U.S.
agricultural exports out of 227 countries, importing $340 million of
U.S. food products in 2006.

U.S. food producers want to further expand this market, situated just 90
miles from Florida, but are limited by the payment rules as well as the
wider trade embargo.

Alvarez said that if the U.S. embargo were lifted -- seen as extremely
unlikely under George W. Bush's presidency -- bilateral trade in goods
and service could total as much as $21 billion in just five years.

"Despite the challenges between our countries, we hope to increase the
number of Nebraskan products sold here," said Gov. Dave Heineman,
heading the delegation in Havana and on his third visit to the
communist-run island, despite being from Bush's Republican party.

In total, Cuba will import $1.6 billion to $1.7 billion worth of food
this year from various countries, Alvarez said.

Cuba -- which has to pay for its U.S. imports in a third currency,
making the deals more expensive, and cover the return journeys of empty
ships -- can import food more simply from countries like Brazil and
Argentina. In other goods, its main trading partners are Venezuela,
China and Vietnam.

In April, a food trade delegation is expected in Cuba from Idaho state
led by Gov. Butch Otter, also a Republican.

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