WASHINGTON - U.S. agricultural trade with Cuba could become a victim of increasing tensions between the Bush administration and Cuba during a second Bush term, John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, said in a telephone call last week.

Kavulich said U.S.-Cuba trade is becoming "a sandwich" in which the trading companies and their goods could be squeezed by a Bush administration publicly discouraging the trade and the Cuban government "doing everything possible to antagonize the Bush administration." Kavulich said the election of Senator-elect Mel Martinez, R-Fla., who was born in Cuba and fled the revolution, the selection of Kellogg CEO Carlos Gutierrez, who also was born in Cuba, as commerce secretary, the elevation of National Security adviser Condoleeza Rice to secretary of state, the likely appointment of her deputy Stephen Hadley as national security adviser, who are considered anti-Castro hardliners, and the 208 Republican presidential nomination process may "all together" result in a tougher policy on Cuba trade.

Embargo change

At the same time, Kavulich said, the Cuban government has begun asking U.S. governors, senators and House members on trade missions and company executives who export goods to Cuba to sign agreements that will advocate a change in the U.S. embargo on Cuba that bans export of all products except food and medicine. Texas-based Sysco, a U.S. food services provided, declined to export to Cuba after the Cuban government made the demand. Kavulich said Cuba is able to make these demands because Venezuela has not been demanding payments for $1 billion oil it sold Cuba and because China has provided grants and credit and also is not being aggressive about seeking payments. "The largess of those two governments is what prevents meaningful economic and commercial change in Cuba," Kavulich said.

But Kavulich said he doesn't believe the Cuban government's actions including delayed payment for U.S. agricultural products justify requiring the Cubans making payment in advance for U.S. agricultural products. "The vast majority of the transactions" have met the legal requirements for payment before the goods have been received, he said, adding that company executives are particularly angry because the Bush administration began holding up their payments without notifying them. Kavulich noted almost all the exporters doing business with Cuba are located in states that voted for Bush.

Kavulich said company executives are "reticent" about pushing the Bush administration too much on the Cuba issue because they fear the administration won't help them on trade problems with bigger importers such as China. Among the leading companies doing business with Cuba are Archer Daniels Midland, Cargill, F.C. Stone and Riceland Foods.

Cuba's ag purchases

But Kavulich pointed out that, despite the problems, Cuba has continued to increase its agricultural purchases in the United States. He said U.S. agricultural sales to Cuba have risen from $4.3 million in 2001 to $138.6 million in 2002 to $256.9 million in 2003 to $314.7 million through Oct. 1 in 2004. U.S. sales to Cuba since they began in December 2001 total $714.5 million.

Noting that the Agriculture Department recently said that the value of U.S. agricultural imports may equal exports in fiscal year 2005 for the first time since the late 1950s, Kavulich said, "You would reasonably expect that the U.S. government seeing that potential would move heaven and earth to create an environment where U.S. exporters can excel irrespective of political concerns, placing the economy security of the nation above politics. But in the case of Cuba the Bush administration has said economic consequences be damned."

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