TRADE WITH CASTRO: A FISCAL TRAP FOR AMERICANS

by Frank Calzon

The campaign to lift the U.S. embargo against Fidel Castro has resumed. Central Europeans believe that radio broadcasts and solidarity with the dissidents were important but that Western loans and tourism propped up their communist regimes, which otherwise would have collapsed much earlier.

U.S. agro-business believes that there are huge profits to be made by trading with Castro and that Cuban trade will open the way to profitable trade with the likes of Libya and Iraq as well.

Last year, Congress lifted sanctions on sales of agricultural products and medicine to Cuba. No sales have materialized. One reason why they haven't is Castro. He suspended payments on his foreign debt in 1986 but wants U.S. taxpayers to subsidize trade with Cuba with credits and export insurance.

A CREDIT RISK

Though Castro expropriated U.S. and Cuban businesses in the 1960s, the Cuban dictator keeps the trade pressure, telling U.S. businessmen that they're losing deals.

The U.S. International Trade Commission estimates that absent sanctions, ``U.S. exports to Cuba . . . based on average 1996-98 trade data, would have been less than 0.5 percent of total U.S. exports.'' Also, that ``U.S. imports from Cuba, excluding sugar [U.S. sugar imports are government-regulated] would have been approximately $69 million to $146 million annually, or less than 0.5 percent of total U.S. imports.''

The report, requested by U.S. Rep. Charles Rangel, D-N.Y., an opponent of sanctions, says: ``U.S. wheat exports to Cuba could total between $32 million and $52 million annually, representing about 1 percent of recent U.S wheat exports.''

More instructive are the experiences of other countries:

France recently withheld a shipment of grain and canceled $160 million in credits because Castro hasn't paid for earlier shipments.

Chile is attempting to establish ``a payment plan'' for $20 million worth of fish shipped to Cuba last year.

South Africa, according to The Johannesburg Sunday Times, is ``frustrated'' by Havana's failure to settle a $13 million debt and will not approve new credit guarantees until the debt is settled. Castro's Western creditors (Canadians, French, Spanish, etc.) currently are attempting to recover loans amounting to more than $10 billion. Havana refuses to repay loans even to Moscow, insisting that Cuba's debt is owed to the Soviet Union, ``a country that no longer exists.''

BEST-KEPT SECRET

One of the best-kept secrets about the U.S. embargo is that it has saved millions for U.S. taxpayers. Due to the embargo, there are no American banks in the ``Paris Club,'' a consortium of Cuba creditors. Otherwise, U.S. banks and their congressional allies now would be hitting U.S. taxpayers to cover their losses in Cuba.

According to the trade-commission report, rice exports to Cuba would be worth $40 million to $59 million, increasing the value of U.S. rice exports from 4 to 6 percent. ``U.S. exporters would be highly competitive with current suppliers,'' it says, but then it cautions that Castro's trade decisions are based on politics, not on economic efficiency.

In plain words, Castro is unlikely to give U.S. farmers the market share of his ideological allies -- China and Vietnam.

U.S. agro- businesses should not assume that `selling' to Havana is synonymous with `getting paid.'

Castro's trade partners become apologists for the regime, fearful of anything that could endanger their investments. They have learned the hard way.

Louisiana rice and Illinois wheat producers should not assume that ``selling'' to Havana is synonymous with ``getting paid.'' U.S. taxpayers should be wary. Castro desperately needs credits and subsidies, and Washington is being pressured to provide them.

If the Bush administration begins to subsidize trade with Cuba -- estimated at $100 million a year -- five years from now, U.S. taxpayers could be holding, or paying off, a $500 million tab. That's real money.

END

Frank Calzon

Mr. Calzón is executive director of the Center for a Free Cuba, a nonpartisan organization dedicated to the promotion of human rights in Cuba.

The Miami Herald
Friday, April 13, 2001

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