Cuba woos heart of U.S. with trade

Prospects for agribusiness have some questioning embargo

By CRAIG GILBERT
of the Journal Sentinel staff

August 17, 2002

Washington - Green Bay meatpacker Carl Kuehne has his eye on a new customer.

His name is Fidel Castro.

Along with hundreds of other executives from America's food
and agribusiness industry, Kuehne will head to Cuba next
month for the biggest U.S. trade show in the Communist
regime's 43-year history.

"It's absolutely a great, ideal market for some of our high-value
items," Kuehne said of the island's budding resort sector.

But if American companies are warming to Cuba, the Bush
administration is not.

"It represents a trap," Otto J. Reich, assistant secretary of state
for Western Hemisphere affairs, said in an interview
Thursday.

Castro wants to entice U.S. businesses, he warned, to build
pressure in America for an easing of the four-decade economic
embargo of his country, one of seven on the U.S. list of state
sponsors of terrorism.

Reich said the growing commerce with Cuba is "only delaying
the transition to democracy" by sustaining the Castro
dictatorship. And he speaks dismissively of the business
community's appetite for this small, poor but tantalizing
market.

"What I don't understand is why this apparently irrational
interest by the Farm Bureau, or other organizations, in a
totalitarian country which is bankrupt and with a per-capita
income of $20?" he said. "How many sacks of rice can you
buy for $20?"

The administration is holding to a hard line on Cuba, but it's
bucking some powerful forces.

Under a 2-year-old law signed by President Clinton, Cuba can
buy U.S. food and agriculture products as long as it pays cash
up front. Castro howled about that restriction at the time, but
since late last year, he has spent more than $100 million on
U.S. goods, from wheat to lard to baby food. Corn grown in
Wisconsin was part of the first shipment.

At the same time, Congress is moving to ease restrictions. The
U.S. House voted 247-182 last month to undercut the existing
travel ban to Cuba, by slashing enforcement funds. The Senate
could follow suit. The White House has threatened to veto
such a move.

Even more telling, the House nearly approved a measure
ending the economic embargo itself. Janesville's Paul Ryan
was one of only 30 Republicans to back the amendment.
Along with Madison Democrat Tammy Baldwin, he belongs to
a newly formed 44-member bipartisan caucus - the "Cuba
Working Group" - pushing for liberalized ties to the island
nation.

"If we think engagement works well with China, well, it ought
to work well with Cuba," Ryan said, in an argument commonly
heard against U.S. policy. "Two, the embargo doesn't work. It
is a failed policy. It was probably justified when the Soviet
Union existed and posed a threat through Cuba. I think it's
become more of crutch for Castro to use to repress his people.
All the problems he has, he blames the American embargo."

Kuehne traveled to Cuba last spring on a trip sponsored by the
University of Wisconsin-Milwaukee. His Green Bay-based
company, American Foods Group, has 1,700 employees in
three states and does $650 million a year in sales, mostly in
the United States. Its biggest export markets are Japan, South
Korea, Taiwan and Hong Kong.

But he sees a market for his high-end goods in Cuba's tourist
hotels, and a market for his lower-priced processed meats
among the downtrodden Cuban people themselves. He usually
supports the Bush administration. Not in this.

Misguided policy?

"It's curious to me our government thinks our embargo - and
we're the only country that's participating in it - is somehow
going to destroy the Castro government," Kuehne said.

His firm is one of at least two in Wisconsin headed for the big four-day exposition in Havana
Sept. 26, where more than 150 businesses will display their thousand-plus brands, including beer,
tobacco, cheese, snacks, livestock and pet food. The other is Green Bay's Schreiber Foods, a big
cheese processor and major supplier to fast-food chains. Agribusiness giants such as Cargill and
Archer Daniels Midland also will be there.

A dozen states are sending agriculture officials, too. Minnesota Gov. Jesse Ventura is going;
North Dakota's governor made his own trade mission last month to sell field peas, barley,
chickpeas and lentils. Wisconsin's state government is not planning to send anyone.

"We think if Cuba opened up, we'd send a fair amount of dairy cattle there, a lot of equipment . . .
a lot of just basic farm commodity-type things," said Joe Tregoning, who oversees exports for the
state's agriculture department.

But he said the U.S. State Department was making it a "hassle" to do business with Cuba. When
Wisconsin had a chance to complete a sale of dairy cows, the government denied a visa to the
Cuban official who wanted to inspect them, he said.

Castro shows interest

Alan Tracy, the former Wisconsin agriculture secretary who now heads U.S. Wheat Associates,
said he met with Castro at the time of former President Carter's visit in May.

"He has great personal interest in the dairy industry," Tracy said of the aging autocrat. "He
brought out a small statue of a Cuban cow with a great production record."

Market prospects have forged a new constituency in the U.S. for easing the embargo, especially
among Midwestern and farm-district lawmakers.

Of the 30 House Republicans who voted to end the embargo, four are from Iowa, five are from
Illinois, and others hail from Nebraska, Missouri, Kansas, Minnesota, Montana, South Dakota
and Idaho. Liberals and Democrats in Congress overwhelmingly support an easing.

"The products that have been exported to Cuba during the last nine months source from 30
different states. Those 30 different states represent 72% of the House of Representatives and
60% of the U.S. Senate," said John Kavulich, president of the U.S.-Cuba Trade and Economic
Council, a business-funded group that fosters commerce between the nations but says it takes no
official stand on the political relationship.

"The administration is rattled by this," Kavulich said of the wave of new trade.

Administration's response

Against that shifting political backdrop, Assistant Secretary Reich invited a handful of reporters
from Midwestern newspapers to the State Department on Thursday to hear the administration's
case against loosening the embargo.

Over the course of almost an hour, he offered a broad range of arguments. He said easing the
travel ban would give Castro the income to shore up his power and begin funding terrorists again.

"We want to make sure that we inadvertently . . . do not give them the money with which to harm
us," said Reich, citing Lenin's famous dictum that capitalists "will sell us the rope with which to
hang them."

Reich noted U.S. claims that Castro has "at least a limited offensive biological warfare and
research and development effort."

He also denied that the president's tough stance on Cuba is driven by the political clout of greater
Miami's Cuban-American community, which helped President Bush carry Florida's disputed 25
electoral votes by a tiny margin in the 2000 election.

"We want to see a democracy in Cuba. What is driving our policy is not politics; it's policy," he
said.

Different from China

The veteran diplomat argued that Cuba is different from China, a human rights abuser with which
the U.S. is expanding trade, since "there is a genuine economic revolution taking place in China,
not in Cuba."

Reich also suggested that U.S. businesses are being used by Cuba's political sympathizers and
being suckered by Castro.

"What we believe he wants to do here is to entice the U.S. agricultural community by buying
relatively small amounts . . . to entice them with cash purchases so that we open up markets and
have, quote, normal trade relationships," Reich said.

That would mean allowing Cuba to buy goods on credit. He points to Cuba's billions in unpaid
debts to other trading partners, saying the U.S. would be left "holding the bag" like other
countries.

"If (Castro) can pay in cash, the administration is not going to stand in the way, but I think people
should be very careful who goes down there," Reich said of U.S. business executives. "They're
going to go to the Tropicana, they're going to listen to Cuban music, which is very nice, and eat
Cuban food, which by the way the Cubans don't have access to, and they're going to stay in hotels
the Cubans are not allowed to stay in."

Delaying democracy

Asked if he thinks U.S. food and agriculture exporters, while operating within the law, are not
acting in the national interest in pursuing Cuba's business, Reich answered: "Yes, I would make
that (argument). Because - and they have the right to do it - it is delaying the transition to
democracy in Cuba."

Such sentiments do not go over well among U.S. business interests. Tracy, whose job is
promoting wheat exports, said it's "insulting" to suggest that American companies are being
"duped" by Castro.

Kavulich accused Reich of trying to "discourage lawful sales."

"I'm appalled by his transparent effort to say he is neutral (about cash food sales) and then to say
anyone who is selling products to Cuba under the law is unpatriotic. That's what he's saying,"
Kavulich said.

Kuehne, the Green Bay businessman who will have a booth at next month's Havana trade show,
said of Castro: "Everybody else in the world trades with him. Whether we trade or not is not
going to make a difference as to whether the regime stays in place."

Appeared in the Milwaukee Journal Sentinel on Aug. 18, 2002.