Cuba woos heart of U.S. with trade - Reich: "…irrational interest by the Farm Bureau"

Along with hundreds of other executives from America's food and agribusiness industry, Kuehne will head to Cuba next month for the biggest U.S. trade show in the Communist regime's 43-year history.

"It's absolutely a great, ideal market for some of our high-value items," Kuehne said of the island's budding resort sector.

"It represents a trap," Otto J. Reich, assistant secretary of state for Western Hemisphere affairs, said in an interview Thursday.

Castro wants to entice U.S. businesses, he warned, to build pressure in America for an easing of the four-decade economic embargo of his country, one of seven on the U.S. list of state sponsors of terrorism.

Reich said the growing commerce with Cuba is "only delaying the transition to democracy" by sustaining the Castro dictatorship. And he speaks dismissively of the business community's appetite for this small, poor but tantalizing market.

"What I don't understand is why this apparently irrational interest by the Farm Bureau, or other organizations, in a totalitarian country which is bankrupt and with a per-capita income of $20?" he said. "How many sacks of rice can you buy for $20?"

The administration is holding to a hard line on Cuba, but it's bucking some powerful forces.

Under a 2-year-old law signed by President Clinton, Cuba can buy U.S. food and agriculture products as long as it pays cash up front. Castro howled about that restriction at the time, but since late last year, he has spent more than $100 million on U.S. goods, from wheat to lard to baby food. Corn grown in Wisconsin was part of the first shipment.

At the same time, Congress is moving to ease restrictions. The U.S. House voted 247-182 last month to undercut the existing travel ban to Cuba, by slashing enforcement funds. The Senate could follow suit. The White House has threatened to veto such a move.

Even more telling, the House nearly approved a measure ending the economic embargo itself. Janesville's Paul Ryan was one of only 30 Republicans to back the amendment. Along with Madison Democrat Tammy Baldwin, he belongs to a newly formed 44-member bipartisan caucus - the "Cuba Working Group" - pushing for liberalized ties to the island nation.

"If we think engagement works well with China, well, it ought to work well with Cuba," Ryan said, in an argument commonly heard against U.S. policy. "Two, the embargo doesn't work. It is a failed policy. It was probably justified when the Soviet Union existed and posed a threat through Cuba. I think it's become more of crutch for Castro to use to repress his people. All the problems he has, he blames the American embargo."

Kuehne traveled to Cuba last spring on a trip sponsored by the University of Wisconsin-Milwaukee. His Green Bay-based company, American Foods Group, has 1,700 employees in three states and does $650 million a year in sales, mostly in the United States. Its biggest export markets are Japan, South Korea, Taiwan and Hong Kong.

But he sees a market for his high-end goods in Cuba's tourist hotels, and a market for his lower-priced processed meats among the downtrodden Cuban people themselves. He usually supports the Bush administration. Not in this.

"It's curious to me our government thinks our embargo - and we're the only country that's participating in it - is somehow going to destroy the Castro government," Kuehne said.

His firm is one of at least two in Wisconsin headed for the big four-day exposition in Havana Sept. 26, where more than 150 businesses will display their thousand-plus brands, including beer, tobacco, cheese, snacks, livestock and pet food. The other is Green Bay's Schreiber Foods, a big cheese processor and major supplier to fast-food chains. Agribusiness giants such as Cargill and Archer Daniels Midland also will be there.

A dozen states are sending agriculture officials, too. Minnesota Gov. Jesse Ventura is going; North Dakota's governor made his own trade mission last month to sell field peas, barley, chickpeas and lentils. Wisconsin's state government is not planning to send anyone.

"We think if Cuba opened up, we'd send a fair amount of dairy cattle there, a lot of equipment . . . a lot of just basic farm commodity-type things," said Joe Tregoning, who oversees exports for the state's agriculture department.

But he said the U.S. State Department was making it a "hassle" to do business with Cuba. When Wisconsin had a chance to complete a sale of dairy cows, the government denied a visa to the Cuban official who wanted to inspect them, he said.

Alan Tracy, the former Wisconsin agriculture secretary who now heads U.S. Wheat Associates, said he met with Castro at the time of former President Carter's visit in May.

"He has great personal interest in the dairy industry," Tracy said of the aging autocrat. "He brought out a small statue of a Cuban cow with a great production record."

Market prospects have forged a new constituency in the U.S. for easing the embargo, especially among Midwestern and farm-district lawmakers.

Of the 30 House Republicans who voted to end the embargo, four are from Iowa, five are from Illinois, and others hail from Nebraska, Missouri, Kansas, Minnesota, Montana, South Dakota and Idaho. Liberals and Democrats in Congress overwhelmingly support an easing.

"The products that have been exported to Cuba during the last nine months source from 30 different states. Those 30 different states represent 72% of the House of Representatives and 60% of the U.S. Senate," said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a business-funded group that fosters commerce between the nations but says it takes no official stand on the political relationship.

"The administration is rattled by this," Kavulich said of the wave of new trade.

Against that shifting political backdrop, Assistant Secretary Reich invited a handful of reporters from Midwestern newspapers to the State Department on Thursday to hear the administration's case against loosening the embargo.

Over the course of almost an hour, he offered a broad range of arguments. He said easing the travel ban would give Castro the income to shore up his power and begin funding terrorists again.

"We want to make sure that we inadvertently . . . do not give them the money with which to harm us," said Reich, citing Lenin's famous dictum that capitalists "will sell us the rope with which to hang them."

Reich noted U.S. claims that Castro has "at least a limited offensive biological warfare and research and development effort."

He also denied that the president's tough stance on Cuba is driven by the political clout of greater Miami's Cuban-American community, which helped President Bush carry Florida's disputed 25 electoral votes by a tiny margin in the 2000 election.

"We want to see a democracy in Cuba. What is driving our policy is not politics; it's policy," he said.

The veteran diplomat argued that Cuba is different from China, a human rights abuser with which the U.S. is expanding trade, since "there is a genuine economic revolution taking place in China, not in Cuba."

Reich also suggested that U.S. businesses are being used by Cuba's political sympathizers and being suckered by Castro.

That would mean allowing Cuba to buy goods on credit. He points to Cuba's billions in unpaid debts to other trading partners, saying the U.S. would be left "holding the bag" like other countries.

"If (Castro) can pay in cash, the administration is not going to stand in the way, but I think people should be very careful who goes down there," Reich said of U.S. business executives. "They're going to go to the Tropicana, they're going to listen to Cuban music, which is very nice, and eat Cuban food, which by the way the Cubans don't have access to, and they're going to stay in hotels the Cubans are not allowed to stay in."

Asked if he thinks U.S. food and agriculture exporters, while operating within the law, are not acting in the national interest in pursuing Cuba's business, Reich answered: "Yes, I would make that (argument). Because - and they have the right to do it - it is delaying the transition to democracy in Cuba."

Such sentiments do not go over well among U.S. business interests. Tracy, whose job is promoting wheat exports, said it's "insulting" to suggest that American companies are being "duped" by Castro.

"I'm appalled by his transparent effort to say he is neutral (about cash food sales) and then to say anyone who is selling products to Cuba under the law is unpatriotic. That's what he's saying," Kavulich said.

Kuehne, the Green Bay businessman who will have a booth at next month's Havana trade show, said of Castro: "Everybody else in the world trades with him. Whether we trade or not is not going to make a difference as to whether the regime stays in place."

The hotels bring in U.S. dollars Castro craves. Too bad everyday Cubans can't set foot in the door of these hotels. However, they can hang out and prostitute themselves to visitors to get enough money to buy the "lower-priced processed meats" from the Green Bay meatpacker.

The price of milk (and sex) in Cuba*** What is it about these poor countries? What savor do they offer us? Is it just the perfume of misery that makes us appreciate our own lives?***

"What we believe he wants to do here is to entice the U.S. agricultural community by buying relatively small amounts . . . to entice them with cash purchases so that we open up markets and have, quote, normal trade relationships," Reich said. That would mean allowing Cuba to buy goods on credit. He points to Cuba's billions in unpaid debts to other trading partners, saying the U.S. would be left "holding the bag" like other countries.

Castro's Cuba Bad for Business*** The experience of foreign investors in Cuba is replete with horror stories. In 1995, when the "liberalizing" law was passed, the Cuban government unilaterally canceled Spanish utility company Endesa's investments in hotels. Mexico's Grupo Domos found itself arbitrarily slapped with enormous back-tax penalties, and Canada's First Key Project Technologies' proposal to build a $350 million power plant was stolen by the Cuban government and shopped around elsewhere.

Cuba last year devalued its currency by 18 percent and fell behind in debt payments of $500 million to private banks and firms in France, Spain, Japan, Canada, Chile and Venezuela. (This does not include the repayment of government trade credits to France for the last four years and the principal on foreign debt of $35 billion.) With export prices down in nickel, sugar and tobacco, along with a fall in tourism and remittances from abroad, Cuba will remain an economic basket case. Doing business in countries that violate labor rights is not considered good business practice.

In Cuba, workers in foreign joint ventures are paid $400 to $500 a month, except that the Cuban government contracts the workers and pays them 400 to 500 pesos, or $20 a month, instead. Exploitation of child labor is officially tolerated, and it is commonplace to find children as young as 8 who are working. Finally, liberalizing exports to Cuba will produce a revenue windfall for customs brokerages, wholesale, distribution and retail stores -- all government-operated. This will provide increased money for Mr. Castro's intelligence and security services and neighborhood vigilante organizations, further postponing democracy and economic freedom in Cuba. There are a score of countries in the Caribbean Basin that embrace free markets, political democracy and institutional reforms, thereby offering far greater opportunities than Cuba.***

Sugar and tourism force a bitter pill on Cubans *** Foreign investors keep complaining that the Cuban state partners they must work with are taking their money but do not always want to listen to their advice. The European Union has sent a report on behalf of investors to the Cuban government with a list of complaints and suggested solutions. It says there are too many rules and regulations applied to foreign companies that are often not applied fairly. The investors keep coming because they see a potentially attractive market just a short hop from the US, a market with which Washington prevents its own citizens from doing business. The question is when will they see some return on their investment? Mr Castro has made it clear that they will not see any fundamental changes soon. The 75-year-old has even been trying to ensure that his achievements of the past 43 years remain long after he is gone.***

Don't subsidize a tyrant*** While the embargo restricts most U.S.-Cuba trade, it does not impose a humanitarian burden. Cuba frequently has bought wheat from Canada, rice from Vietnam, and medicine from Europe, Asia and Latin America. Donations of food and clothing and the licensed sale of U.S. medical products are permitted. The real cause of Cuba's hardship is not the embargo but the state's Soviet-style economy. Traditional exports such as sugar cost the regime more to produce than they sell for on the global market. Tourism brings in hard currency but not nearly enough to provide for Cuba's needs. Debt payments are so uncertain that major trade partners often must extend new loans.***

Friends of Fidel*** Louisiana rice and Illinois wheat producers should not assume that selling to Havana is synonymous with getting paid. U.S taxpayers should be wary. Mr. Castro desperately needs credits and subsidies, and Washington is being pressured to provide them. If the United States 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.

Before extending Mr. Castro credit, grain growers should visit any street corner in Manhattan and observe a game played there. Called three-card monte, it consists of convincing the player that he knows exactly where the card carrying his money is. Until it disappears. In this game, the gambler takes his own chances. Where trade with Mr. Castro is concerned, the U.S. taxpayer will be left holding the losing card.***

Al Neuharth: Why is China OK, but Cuba 'enemy'?

Fidel Castro - Cuba

There are vast differences between the people of the former Soviet Union and as you described the hellhole isla. The compays of the hellhole find very little in common and had little use with the former Soviet occupants of their country, with the exception of the cash they brought with them.

I wasn't speaking of bribes--I wrote of justification of theft. When a government prevents you of living your dreams and taxes you over 95% of your income, and then taxes you additionally when you have accomplished more than others when you puchase a license to operate on your own--there is justification for Cubans to take chunks from the lopsided score against them.

Cuban Customs in the major international airports have video cameras and signs stipulating a policy against bribery. Very different from the Batista era, if you are interested in a track record of bribes. This is not a defense of Castro, just a real life experience a yuma wouldn't know about calling the island a hellhole across the ocean.

I have only been hit up by a cop in Cuba once, many years ago when he wanted $10 for his kid's birthday after an unjustified traffic stop. Very different from what occurs in Mexico--especially in Mexico City on a daily basis from the policia. Mexico has just experienced over 70 years of a one party socialist state(not communist), but corruption and bribery in Mexico City can rival any land of payoffs.

I haven't been hit up for a propina in Cuba as I have been asked at military checkpoints driving through countries in Central America.

Cuba has a number of major imperfections, however everything is not the total ruin you describe, and most of all the people of Cuba have heart qualities our civilized world has forgotten.

May you get the opportunity to be contaminated by them rather than refer to them as the residents of the island hellhole.

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