Lift restrictions on trade with Cuba

January 02, 2002|By Brian Alexander

WASHINGTON - When ships loaded with American agricultural products pulled into Havana harbor recently, it marked the first sale of U.S. farm goods to Cuba in four decades.

The sales, which will total an estimated $30 million, are perhaps the most important commercial event since the United States imposed the trade embargo on Cuba.

Under a law passed in 2000, the U.S. embargo permits sales of agricultural products to Cuba but forbids U.S. financing of such sales. Frustrated by this unusual prohibition, Fidel Castro declared that Cuba would not buy "a single grain of rice" from the United States.

Then Hurricane Michelle hit the island in November, causing unprecedented devastation when the Cuban economy was suffering its worst conditions in a nearly a decade. In response to a U.S. offer of humanitarian assistance, Mr. Castro pulled a surprise by proposing a one-time cash purchase of U.S. agricultural goods. His reversal is significant and suggests the possibility that Cuba is ready to do business with the United States.

This business would be considerable.

Several studies over the past year indicate the volume of trade between the United States and Cuba could be in the billions of dollars. The U.S. International Trade Commission, for example, found that in the absence of the embargo, U.S.-Cuba trade in the late 1990s would have been $700 million to $1 billion annually.

Independent analyses suggest that American farmers are missing out on potentially hundreds of millions of dollars of trade. The Cuba Policy Foundation reported that lifting the embargo could result in $2 billion to $3 billion annually for the U.S. energy industry.

Although both Washington and Havana suggest that this month's sale is a one-time event, it should not be. Instead, the obvious mutual gains of increased trade, combined with lessons learned from this sale, should be used to make future trade easier and more likely.

In particular, complications encountered can be avoided so they do not impede future trade. For example, the sale was nearly curtailed because U.S. and Cuban food safety standards differ and no mechanisms exist to ensure mutual compliance. They could be brought more into line with each other.

Other improvements should include streamlining cumbersome U.S. licensing procedures. No fewer than six U.S. agencies - from the Commerce Department to the National Security Council - have jurisdiction over sales to Cuba. A recent letter to President Bush by 15 senators promises bipartisan support for eliminating red tape.

The lifting of financial restrictions also is needed. Even more significant would be ending the embargo completely.

Improved trade relations could also reduce U.S.-Cuban political tensions. Mr. Castro's enmity for the United States is no secret, but the embargo has done little to change this. Nor has the embargo achieved U.S. goals to foster democracy and human rights in Cuba.

By building on the successes of the current trade deal, the United States and Cuba would create mutual interests and engender a climate of negotiation and cooperation. Further, the United States would increase its political leverage in Cuba because trade could be used as an incentive for reform - particularly as independent Cubans outside the Castro government would press for opportunities to conduct business with the United States.

Cuba's economic woes make it more likely to respond to U.S. trade opportunities. And the American economic recession could be an impetus for paving a new avenue of trade.

This is an opportunity neither country should let pass.

Brian Alexander is director of a Washington-based consulting group that focuses on fostering U.S.- Cuba relations.

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