Monday, May 04, 2009

Virginia, Maryland Prepare for Cuban Detente

Virginia, Maryland Prepare for Cuban Detente
By Fredrick Kunkle
Washington Post Staff Writer
Monday, May 4, 2009

Virginia and Maryland trade officials, sensing winds of change in the
tempestuous relationship between the United States and Cuba, are
hustling to build markets for their goods in the event two countries
normalize relations further.

Virginia agriculture has already benefited from the relaxation of the
47-year-old trade embargo with Cuba, increasing exports from less than
$1 million to $40 million in five years. Maryland has been developing
farm trade in Cuba, though so far on a more modest scale. Last year,
Maryland spent $6,000 on a trade mission that sewed up a $12.8-million
deal on soybeans.

"There's just a lot of excitement," said Todd P. Haymore, commissioner
of the Virginia Department of Agriculture and Consumer Services. "We
feel certain that things are going to happen based on what the Obama
administration has already done -- just the fact that we're talking
about changing policies in place for 40 years or more."

Even the Cuban American National Foundation, a Miami-based organization
that applied its political clout to keeping the door shut to Cuba, has
reconsidered the embargo.

"If you look at the last few years, I think the door has already been
about wide open," said Francisco "Pepe" Hernandez, the group's president.

Virginia made its first deals with Cuba under former governor Mark R.
Warner and now ranks sixth among U.S. states exporting to Cuba, Haymore
said. In 2003, the commonwealth shipped $838,009 worth of soybeans and
apples to Cuba. That marked the first such export from Virginia to the
island since the U.S. embargo was imposed in 1962. Last year, Virginia
tallied $40.7 million in exports to Cuba, including pork, apples and
soybeans.

The commonwealth's deep-water port in Chesapeake is also a conduit for
the region. Maryland, which no longer has the capability to ship
soybeans from Baltimore, also sends shipments to Cuba through Virginia.
Dulles International Airport is an important hub too, moving nearly $1
million worth of goods to Cuba in 2008.

Haymore, who traveled to Cuba twice in 2007 and 2008, said in an
interview that he anticipates greater trade in poultry, wood products
and livestock. Virginia's wineries also hope to crack the Cuban market,
Haymore said. The new markets are vital to an industry that remains
Virginia's largest, pumping $55 billion a year into the economy while
also preserving open land.

"If we could open a new line of trade with Cuba, that would be good for
everybody," said Cameron Gibson, a soybean farmer in Orange County, Va.,
who sells to the Perdue processing plant in Chesapeake.

President Obama signaled an interest in warmer relations with a modest
step on easing travel restrictions for Cuban Americans and allowing U.S.
telecommunications firms to invest in Cuba. Cuban President Raul Castro
seemed to reciprocate the goodwill when he said that everything was on
the table for discussions, including human rights.

Late last month, however, former president Fidel Castro, who still
wields enormous influence, accused Obama of misinterpreting his
brother's remarks and bristled at calls for a wide-ranging debate or the
release of political prisoners, casting doubt on the leadership's
intentions for detente.

Some Americans, too, are uneasy about dealing with Cuba's repressive
leadership.

"That's always been one of the issues -- whether we should be trading
with a regime like the one that currently exists in Cuba," said Dick
Atkinson, executive director of the Virginia Soybean Association. "It's
something for strong debate."

President John F. Kennedy imposed the comprehensive trade embargo in
February 1962 in retaliation for the seizure of U.S. property by Fidel
Castro's new government. Thanks to lobbying from farm lobbyists, the
Trade Sanctions Reform and Export Enhancement Act of 2000 allowed a
narrow trade of food products and medical goods. The first shipment to
Cuba contained corn sold by Archer Daniels Midland, the Decatur,
Ill.-based agricultural conglomerate. By 2004, the United States had
supplanted Europe as the top exporter to Cuba.

In 2005, the Bush administration again tightened restrictions. These
required cash payments for U.S. exports to Cuba before the goods left
port or financing through letters of credit guaranteed by financial
institutions in a third nation, usually in Europe.

Attitudes are shifting. Hernandez said his group changed its position
because Fidel Castro has shown signs of exiting his unrivaled position
of power and because the standard of living has plummeted in Cuba in
recent years. The Cuban American community's support for sanctions
against Cuba also has waned.

But John S. Kavulich II, senior policy adviser for the U.S.-Cuba Trade
and Economic Council, said state officials and private businesspeople
should be wary about rosy predictions of Cuban trade. He argued that a
significant reason U.S. exporters have been pleased about the trade is
because of the existing financial restrictions that ensure they receive
payment for their goods.

"This is still a bankrupt country," Kavulich said.

The Associated Press contributed to this report.

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/03/AR2009050302101.html

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