THE CUBAN GOVERNMENT HAS NOT YET PAID FOR IMPORTS FROM USA

By Richard Daley

With present purchases of food from the US at $70,000,000 and counting (footnote 1). It is wise to realize that with the Cuban government's massive unpaid debt (estimated at $40,000,000,000) suggests that payment will be a problem.

Footnote 1 Nancy San Martin reports that at least some of the US exporters have not been paid. Other companies may be hiding this lack of payment by the Cuban government from their shareholders.

footnote 1 (from Miami Herald)

Posted on Wed, Apr. 03, 2002

U.S. food sales to Cuba far exceed planned amount
BY NANCY SAN MARTIN
nsanmartin@herald.com

Five months after Hurricane Michelle ravaged crops across Cuba, companies in half the states in America have joined the business bandwagon with the communist nation, with total sales reaching an estimated $73 million, or more than twice the original amount of the deal.

Agricultural products stretching across 25 states -- from Alabama to Wisconsin, but not including Florida -- are being boxed and shipped to Cuba, according to the U.S.-Cuba Trade and Economic Council Inc. report released this week. The products are being provided by at least 15 U.S. companies that have agreed to do business with the Cuban government.

Cuba is still recovering from the destruction caused by the Nov. 2 storm that reached 125-mph winds, but the sales have gone far beyond replacement of losses, the original objective, to assume a new dimension, Cuban officials and business leaders say.

''The first purchases were strictly for reserves, but other purchases have a different character,'' said Luis Fernndez, a spokesman for the Cuban Interests Section in Washington. ``Whether this will continue, I don't know.''

The sales consist of various food products, including corn, rice, chicken, apples and peas. They come at a time when the Bush administration has threatened to tighten the embargo, even as Congress is divided over the issue.

Since the first deals were reached in mid-November, the Bush administration has tried to dampen speculation that they could lead to more permanent trade relations. Yet, the amount of sales have risen from the original estimate of about $30 million to $73 million. And more contracts are in the works.

But even as the sales have increased, the administration has impeded efforts to strengthen ties between entrepreneurs and Cuban officials. Visas recently were revoked for various Cuban officials, including Pedro Alvarez Borrego, president of Alimport, the government entity responsible for import purchases.

He was among a group of Cubans that were to visit various farming states and inspect poultry facilities in Michigan, Indiana, Georgia, Arkansas and Texas. Efforts to reach Alvarez Borrego for comment were unsuccessful.

10 MILLION EGGS

Among the most recent contracts is the sale of 10 million eggs to be delivered to Havana this month through June, in what is being billed as the first import of eggs by Cuba in four decades. The eggs are coming from various states including Maine, Massachusetts, Vermont, New Hampshire and Connecticut.

The agreement with Radlo Foods LLC based in Watertown, Mass., took place in February with the support of United Egg Producers of Atlanta, the egg industry's trade association, said David Radlo, president and owner of the company.

He traveled to the island with a delegation of 25 other food producers and exporters.

''We see this sale as not just international cooperation and possibly expanding market, but we're really helping people put food on their table,'' Radlo said. ``They needed the product. They sustained a terrific blow with Hurricane Michelle and they're trying to get back on their feet.''

FERRIED BY SEA

Like the first shipment of products in December, this one, too, is to be ferried by sea. The shipments so far have gone through ports in Louisiana, Mississippi and Texas.

Port directors say the new deals with Cuba are worth watching because of the potential of establishing a growing market worth billions of dollars.

''Our expectation is that once relations are normalized, we think there is an opportunity for this port,'' said Paul Dauphin, a spokesman for the Port of New Orleans. ``As a policy, we have not tried to go down there because of the embargo, but we've got an eye on what's going on.''

Cuba was a leading trading partner with New Orleans in the 1950s. But the relationship was severed after the United States implemented the trade embargo following President Fidel Castro's rise to power in 1959 and his nationalizing of U.S. property on the island.

The new purchases are allowed under the Trade Sanctions Reform and Export Enhancement Act of 2000, which permits the commercial export of food and agricultural products to Cuba with a caveat: The government must pay for the purchases in cash.

Jorge Salazar-Carrillo, director of the Center for Economic Research at Florida International University, said Cuba does not have enough cash in its reserves to pay for the products, suggesting that underhanded deals are taking place.

''These are off-the-cuff type of deals,'' Salazar-Carrillo said. ``This is a concerted effort to break the embargo.''

In Washington, enforcement authority seems to be unclear. Officials in the Treasury Department said the responsibility belongs to Commerce. Officials in Commerce did not have an answer and said they would check into the matter.

Radlo said Cuba makes payments through third countries. Though he has not yet received his fee because the payment is made after the goods arrive, Radlo said he is confident it will not be an issue.

''All the reference checks with other companies show they've gotten paid, like clockwork,'' Radlo said. ``Obviously, it's a reasonable risk. It took us 43 years to get the first order. Hopefully, it won't take another 43 for the next one.''

END

Richard Daley
daleyl@peak.org

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