U.S. Business Likes Cuba, but Obstacles Remain

Former President Carter spoke of human rights in Cuba, but Fidel Castro would much rather have talked turkey--the poultry kind--along with chickens, eggs, beans and other agricultural produce.

Castro’s government, 43 years in power, is eager to talk of U.S. foodstuffs and medical equipment. And U.S. companies are just as eager to talk business because Cuba’s educated population and tradition of achievement in medicine could make it an important market, once Castro and his Communist government leave.

However, that promise may take some time to be realized. The Bush administration opposes a broad opening of economic relations with Cuba. And Castro, now 75, appears to be going strong. Only last month he regaled Sen. Barbara Boxer (D-Calif.) and a group of this state’s agricultural and business officials for five hours at a dinner in Havana.

Castro said the Cuban government wanted to purchase 10,000 tons of California chicken, worth about $3.6 million. He in- quired about the protein content of California poultry and the state’s abundant bean crop.

Cuba has been on a buying spree in U.S. farm circles. Since November, the island nation has purchased $70 million worth of chickens from half a dozen states, plus eggs from Massachusetts, rice from Texas and soybeans, corn and wheat from Illinois and eight other Midwestern states. In all, Cuba buys foodstuffs from 27 states, building up a strong base of support in Congress for ending the U.S. trade embargo on Cuba, which allows only sales of food and medicine on humanitarian grounds.

And Havana’s buying policies are having some effect. Today 40 members of Congress, evenly divided between Republicans and Democrats, are expected to offer their suggestions to improve relations with Cuba. The group’s recommendations will include lifting the travel ban that pre- vents most U.S. citizens from vacationing in Cuba and allowing U.S. banks and financial insti- tutions to provide credit for transactions with Cuba, which now must be done on a strict cash basis.

But the Bush administration is not likely to heed the congres- sional recommendations. After initially accusing Cuba of export- ing biotechnology that could be used by terrorists, a State Depart- ment official said Tuesday that the U.S. has no evidence that Cuba is exporting weapons material or making weapons of its own.

The administration removed a clause from the recently passed farm bill that would have opened the way for Cuba to get credit from U.S. banks. And the president is expected to give Cuba a cold shoulder when he speaks Monday on policy toward the island nation, says Philip Peters, a Cuba expert at the Lexington Institute, an Arlington, Va., think tank. “He’ll probably call for tightening the travel ban,” Peters says.

Nonetheless, U.S. business remains eager for commercial ties with Cuba. Archer-Daniels- Midland Corp. led agribusiness executives, including Gov. George Ryan of Illinois, on a mission to Cuba in February. Two years ago, a commercial fair in Havana on pharmaceuticals and medical equipment drew 350 represen- tatives of 97 U.S. companies.

The level of interest is unusual for an ostensibly poor country of 11million people and annual economic output of only $17billion--about 4% of the economic output of Mexico. But Cuba is different in the eyes of many U.S. businesspeople. They see its economy as tethered now by Communist rule but capable of doing much better once economic liberalization comes post-Castro.

Businesspeople point to Cuba’s high levels of education and its medical establishment, which supplied physicians to the Soviet bloc and to impoverished countries of Africa and is capable of collab- orating with Britain’s Glaxo- SmithKline Corp. and the Uni- versity of Mexico on developing vaccines against cancer.

The U.S. business community is impressed with the growing number of entrepreneurs who survive in the Cuban system, running restaurants in their apartments and similar small businesses. If the levels of actual business done so far are meager, well, there are obstacles, say U.S. businesspeople. For example, despite the large turnout at the Havana medical fair in 2000, not much business has resulted “because the lack of available credit makes U.S. drugs and medical equipment too expensive,” says John Kavulich II, head of the U.S.-Cuba Trade and Economic Council, a New York-based group that maintains research on Cuba.

So what is the outlook? Probably more of the same. There will be growing sentiment in Congress, pushed by agricultural and business interests, to expand trade and tourism with Cuba.

The U.S. business community believes that greater contact with Americans and with American dollars, in tips to waiters and taxi drivers, will have the liberating effect such dollars had in Eastern bloc societies in the 1970s and ‘80s.

In that placid view, reflected this week in comments by Carter in Cuba, the Bush administration’s objections to opening trade relations are based on appealing to the traditional anti-Castro politics of the Cuban exile communities in Miami and New Jersey.

On the other hand, there is the dark possibility that Castro and his armed forces are miscalculating--as they did with Soviet missiles in the 1960s--and dabbling in biological weaponry. If so, the con- sequences for Cuba and its people would be terrible.

So in the wake of Carter’s highly publicized visit, it would be a good sign if Castro continues to focus on talking turkey.

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Cuba at a Glance

Population: 11.2 million

GDP: $17 billion

Percent of secondary school-aged children enrolled: 70%

Literacy rate: 96.4%

Unemployment rate: 6.6%

Income per capita: $1,818

Leading trade partners: Spain, Russia, Canada, the Netherlands

Leading exports: Sugar, fish, metals, medicines

Source: Europa World Year Book

Percent of girls in school: 73%

Percent of boys: 68%

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James Flanigan can be reached at [email protected].