Agribusiness should come clean about ‘trade’ with Cuba
Agribusiness should come clean about ‘trade’ with Cuba
By Mauricio Claver-Carone
Whether the embattled Export-Import Bank of the United States (“Ex-Im
Bank”), which finances and insures U.S. exports, is a needed facilitator
or a government agency doling out “corporate welfare” is a debate still
raging in Washington. So it’s somewhat ironic that the agribusiness
conglomerates who have benefited most from the Ex-Im Bank’s export
credits and loan guarantees are lining up to drive the final nail in the
Building on the perceived momentum of President Obama’s December
announcement that his administration and Cuba are seeking to “normalize”
relations, the newly formed U.S. Agriculture Coalition on Cuba (“the
Coalition”) is pushing Congress to instruct the Ex-Im Bank to finance
expanded agricultural sales to the Castro dictatorship in Cuba. Yet Cuba
ranks among the world’s worst credit-risks and debtor nations.
While Obama says he will use his executive authority to ease the U.S.
embargo and travel restrictions, the extent of that authority is
uncertain. Congress codified the embargo and tourism ban into law in
1996 and 2000 and only Congress can actually change the law.
Chaired by Minnesota-based Cargill Inc., the Coalition is eyeing a more
immediate “prize”: lifting the prohibition on Ex-Im Bank financing
exports of agricultural products to Cuba. It’s one thing to lobby to do
business with one of the world’s last remaining totalitarian
dictatorships for the sake of profit; it’s quite another to peddle the
deceit to the American public that trade with Cuba serves some public
interest here or in Cuba. The Coalition ought to be more forthright
about its goals.
Minnesota Sen. Amy Klobuchar (D) delivered the Coalition’s rallying call
during its launch at the National Press Club in Washington: “We see Cuba
as a market of 11 million people; 11 million new customers that can buy
American products.” Unfortunately, Klobuchar is not “seeing” the facts
very clearly. For five decades, every single “foreign trade” transaction
with Cuba has been made with a Cuban-government entity. The Cuban
government’s exclusive right to trade and control investment is
enshrined in Article 18 of Fidel Castro’s 1976 Constitution.
Congress authorized “cash-in-advance” sales of U.S. agricultural product
to Cuba in the 2000 Trade Sanctions Reform and Export Enhancement Act.
More than 250 privately-owned American companies have since sold $4
billion in agricultural products to Cuba. All of those sales were to a
single buyer: the Cuban government. That’s hardly surprising, Cuba is a
totalitarian state. The only trade and investment partner on the island
is the government, run by Fidel and Raul Castro.
Obama’s Secretary of Agriculture Tom Vilsack also waxed enthusiastically
about the “opportunities” for agricultural sales to Cuba. Yet, his
Department’s report on Cuba notes, “The key difference in exporting to
Cuba, compared to other countries in the region, is that all U.S.
agricultural exports must be channeled through one Cuban government
agency, ALIMPORT.” Exporting to Cuba is not about trading with small or
mid-size farmers, businesses and manufacturers around the island, as the
Coalition would like Americans to believe.
It should be no surprise that U.S. products end up on the shelves of
government-owned stores that accept only “hard currencies,” such as the
U.S. dollar or Euro, with huge price mark-ups. Shoppers at these “dollar
stores” are mainly tourists. Little imported food or medicine ever makes
it into stores where Cubans shop; neither is it available on ration cards.
But the coalition doesn’t care that ALIMPORT is the only “Cuban market.”
It only cares that Cuba’s one customer can buy enough to ensure a profit
for exporters. So the question becomes: Is that customer credit-worthy?
The Paris Club is a group of 19 nations that extend credit to trade
partners. Cuba ranks No. 2 on the Club’s list of most indebted nations.
(Greece, with more than five times Cuba’s economic output, is the
world’s most indebted nation.) Creditors’ claims against Cuba now total
$35.193 billion (a $5 billion increase from the previous year). Moody’s
Investors Service gives Cuba’s sovereign debt a Caa2 rating, which
translates into “very high credit risk.” How have European and Canadian
investors in Cuba fared? In 2000, there were 400 foreign companies
operating in Cuba as minority partners in joint ventures with the Castro
regime. Today, there are less than 200. The British news service Reuters
reports that Cuba “failed to make some debt payments on schedule
beginning in 2008, and then froze up to $1 billion in the accounts of
foreign suppliers by the start of 2009.” During the same time, CEOs of
various foreign companies doing business in Cuba were arrested. Some are
still sitting in jail, even though no charges have been filed against them.
Lastly, let’s not forget the nearly 6,000 unpaid, certified claims,
worth nearly $7 billion arising from the Castro government’s
confiscation of American-owned business and properties.
This is the Cuban government the new Coalition wants Congress to
authorize the Ex-Im Bank to finance and American taxpayers to subsidize.
That may serve the selfish interests of Cuba’s dictatorship, Cargill and
a few other agribusiness conglomerates, but it’s a heavy price for the
American and Cuban people to pay for “normalization.”
Claver-Carone is a director of the U.S.-Cuba Democracy PAC and host of
the foreign-policy show “From Washington al Mundo” on Sirius-XM’s
Channel 153. He is an attorney who formerly served with the U.S.
Department of the Treasury and has served on the full-time faculty of
The Catholic University of America’s School of Law and adjunct faculty
of The George Washington University’s National Law Center.
Source: Agribusiness should come clean about ‘trade’ with Cuba | TheHill