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House OKs lifting Cuba trade ban

THE BALTIMORE SUN

WASHINGTON - House leaders agreed yesterday to allow sales of U.S. food and medicine to Cuba, paving the way for the most extensive relaxation of trade restrictions against Fidel Castro's communist government in four decades.

The measure was pushed hard by farm-state legislators eager to secure Cuba as a customer for U.S. agricultural businesses, and trade authorities expect it to generate tens of millions worth of U.S. exports.

Its immediate significance is more symbolic than economic, Cuba specialists said. That is because the measure explicitly bars the U.S. government or any U.S. financial institutions from providing financing for Cubans to buy U.S. food.

Nevertheless, the accord is an important step toward the possible resumption of open trade with Cuba.

"At the very least, this change has tremendous symbolic impact," said Meghan O'Sullivan, a specialist in economic sanctions at the Brookings Institution in Washington. "It really is a victory for advocates of economic engagement over isolation."

The deal, part of a broader bill that also eases food and medicine sales to Libya, Iran, North Korea and Sudan, is the latest in a string of moves by Washington to loosen economic restrictions against repressive governments, including a vote by Congress last month to grant full trading privileges to China.

At the same time, yesterday's agreement marks a significant retreat by anti-Castro critics in the House, which refused to join the Senate last year in relaxing the ban on food and medicine shipped to Cuba. Election-year pressures on lawmakers from farmers and businesses also played a role in easing oppostion to the measure.

"It's a reflection of the changing politics and changing debate on Cuba," said Bernard Aronson, who was assistant secretary of state for inter-American affairs in the Bush administration. "The House leadership that did not want Cuba to be included could not prevent this from happening."

The White House welcomed yesterday the idea of selling food and medicine to Havana but opposed language in the same bill that would ban the president from reimposing food and medicine sanctions on Cuba or any other nation by executive order.

"The president needs flexibility as the steward of foreign policy, so we would oppose anything that restricts that," said Joe Lockhart, Clinton's spokesman.

Anti-Castro hawks on Capitol Hill agreed to the milestone in a five-hour negotiating session Monday and yesterday morning, but only after insisting that the U.S. government and private U.S. financial institutions be barred from financing the newly permissible food and medicine sales.

As a practical matter, trade analysts said, such a restriction would limit the the amount of U.S. food and health-care products sold to Cuba, which in land area and population is about the size of Pennsylvania.

Government credit guarantees are a crucial component of international trade with lesser-developed nations. For example, Cuba obtains most of its grain imports from France, with all loans necessary for that trade backed by the French government.

Legislators who promoted yesterday's deal expressed hope that the proximity of the United States to Cuba would help U.S. growers of rice, soybeans and other products take business from the French, Chinese and other Cuban suppliers.

The global nature of finance should allow Cuba to secure credit somewhere for U.S. agriculture and medicine deals, even if it is barred from borrowing in the United States, said Rep. George Nethercutt, a Washington state Republican.

"I believe creativity will abound, and there will be ways to facilitate sales into Cuba," Nethercutt said. "The door is open. I think we'll see sales. I don't know what the long-term result will be, but I think that when you export food, you export democracy."

Anti-Castro legislators predicted that the financing ban would keep Havana from taking significant advantage of the easing.

"Castro needs cash," said Rep. Ileana Ros-Lehtinen, a Florida Republican. "He has no money, and he's going to have no access to public financing. We believe that, if properly implemented, this will not be any economic windfall for Fidel Castro."

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, agreed that the measure's credit restrictions would hamper food and medicine exports to Cuba.

Even so, he estimated that exports of American food products would reach between $25 million and $45 million in the first year after the new rules go into effect. Cuba imports about $750 million in food products annually.

"The relationship between the United States and Cuba is a series of moments," Kavulich said. "This is one of those moments. This is a substantial moment."

It was unclear how yesterday's deal will be sent through Congress. The language on easing food and medicine sanctions is part of an agriculture spending bill headed for the House floor this week, but some on Capitol Hill expected it to be attached to a military construction measure. Approval in the Senate, which has shown support for easing bars on food and medicine sales to Havana, was expected to come easily.

The U.S. trade embargo has a long history, starting in 1960 after Castro nationalized U.S.-owned oil refineries in Cuba and stiffening after the Cuban missile crisis in 1962.

In recent years the White House has eased some economic restrictions on Havana, allowing news organizations to open Cuban offices and permitting "people to people" contacts such as academic exchanges and a visit by the Baltimore Orioles last year.

But until now Congress has refused to follow suit and has bolstered Cuban sanctions instead. The 1992 Cuban Democracy Act prohibited trade with Cuba by foreign-based subsidiaries of U.S. corporations. And the 1996 Helms-Burton law penalized purely foreign companies that do business with Havana.

Technically, the 1992 law permitted the sale of health-care products to Cuba. But the licensing requirements and other red tape required by the measure made it difficult for U.S. medical companies to generate substantial sales to Cuba, trade specialists said.

Yesterday's deal follows years of debate about the usefulness of U.S.-only sanctions as a tool to change other nations' behaviors or regimes.

Many argue that unilateral sanctions do not work, pointing to Castro as Exhibit A and noting that he has survived 40 years of U.S. embargoes. Opponents of sanctions also contend that trade and economic engagement are the best ways to promote international relations, foster freedom and slowly pry open the grasp of restrictive regimes.

Sanctions advocates argue just the opposite, that greater U.S. trade with Cuba and other totalitarian states would enrich the governments and ensure their survival.

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