Cuba's Foreign Trade Balance up by 44% As Alimport Cuts Purchases Of
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Vol. 15, No. 12 December 2007 www.cubanews.com In the News Cuba’s foreign trade balance up by 44% Chile weighs in as Alimport cuts purchases of U.S. food Led by Max Marambio, Chilean exports BY LARRY LUXNER ana — have helped Vietnam, China and other of food to Cuba are rising .............Page 2 uba’s foreign trade balance will show suppliers at the expense of the United States. improvement in 2007 for the first time in “The U.S. agricultural community has done Noel’s nasty legacy Cyears, with exports up 44% through Sep- nothing, absolutely nothing, about trying to per- suade members of Congress to change these Tropical storm causes $500m in damages tember and imports 3% higher. “We have a commercial balance of goods laws,” Jones complained in an interview with across eastern Cuba while worsening is- which is better than previous years,” Foreign CubaNews. land’s housing crisis ......................Page 3 Trade Minister Raúl de la Nuez told Reuters in “The reason is that they’ve been diverted by a Nov. 6 interview. Year-end figures are expect- the farm bill. From their point of view, it’s per- New envoy in D.C. ed to be similar to those through September, haps understandable,” he told us. “The farm bill deals with billions of dollars, with a B, while Havana sends diplomat Jorge Bolaños to meaning exports would increase by more than $1 billion and imports by less than $300 million. Cuba trade is only in millions, with an M. head Cuban Interests Section ......Page 4 This is great news for Cuba, but not for U.S. Jones said: “If they want to resurrect or ex- food exporters, which have seen their sales to pand their business in Cuba, they’ll have to step SPECIAL REPORT state-run purchasing agency Alimport plummet up to the plate and make their voices heard.” Detailed map shows how Cuba’s coastal every year since 2004, due to restrictions im- At the annual Havana International Fair held Nov. 5-10, only 100 U.S. companies showed up, ecosystems have been contaminated by posed by the Bush administration. Kirby Jones, president of the Washington- down from 150 in 2006. A total of 1,425 entities toxic runoff and agriculture ..........Page 8 based U.S.-Cuba Trade Association, said there’s — including 997 foreign firms — exhibited at no question these restrictions — which deny cre- the show, representing 53 countries. Newsmakers dit to Cuba and require up-front payment in cash All told, Cuba signed $301 million in contracts Florida sugar magnate José “Pepe” Fanjul before U.S. goods can even be shipped to Hav- See Trade, page 2 dreams of all the business possibilities in a post-Castro Cuba .........................Page 10 5 ex-chiefs of USINT-Havana offer advice Herzfeld’s hedge Closed-end fund guru plans to launch $300 on how to avoid past mistakes in Cuba million Cuba hedge fund ............Page 11 BY LARRY LUXNER she said. “We all think this relationship we have Business briefs ne hot, humid afternoon, shortly after ar- with Cuba, if it were the right one, might be able riving in Havana to run the U.S. Interests to positively influence that outcome.” Petrobras to look for oil off Cuban shores; OSection, Vicki Huddleston decided to take Tropical breezes, friendly people and beauti- Russia to restructure debt ..........Page 12 a drive along Quinta Avenida in her official air- ful beaches aside, running USINT-Havana isn’t conditioned black Ford Crown Victoria. an assignment for the faint-hearted. A long-run- Fighting the fever “I saw a group of kids waiting for a ride, so I ning propaganda war takes place every day just stopped and six or seven teenagers jumped in,” in front of the old Swiss Embassy annex front- Singapore, Cuba launch joint program to she recalled. “They leaned back, obviously en- ing the Malecón — while U.S. access to top Cu- eradicate dengue fever ................Page 13 joying the air-conditioning. One of the kids ban officials has become virtually impossible. asked me, ‘Where did you get this car?’ I said it And as relations between the United States Marshall gives up was the property of the U.S. government. and the Castro regime continue to deteriorate, the job will only get more and more difficult. British online entrepreneur tired of fight- “Then, another kid asked what I did. I told her I was the chief of USINT-Havana. The girl On Nov. 14, Huddleston and four of the men ing OFAC, Cuban restrictions ....Page 14 leaned forward and said: ‘Please be our mother. who preceded her as chief of USINT spoke Take us to Miami.’” about their experiences at a Washington confer- CubaNews (ISSN 1073-7715) is published monthly Huddleston, who has since retired from the ence organized by the Brookings Institution. by Luxner News Inc. © 2007. All rights reserved. Foreign Service, said that little exchange made If there was one theme that ran through the Subscriptions: $429 for one year, $800 for two years. a lasting impression on her. presentations of these former U.S. diplomats, it For editorial inquires, please call (301) 452-1105 was the constant frustration they felt with their or send an e-mail to: [email protected]. “We would like to see a future for Cuba’s young people — not in Miami, but in Havana,” See Diplomats, page 6 2 CubaNews ❖ December 2007 “Other countries, particularly those that chance of business picking up while Trade — FROM PAGE 1 have lost market share to the U.S. such as President Bush remains in the White House. during the 5-day event, not even close to the Canada, want to get that back and are able to “There is great hesitation right now as peo- $432 million in deals signed during FIHAV offer credits,” he told CubaNews. ple wait to see a change in the U.S. adminis- 2006. Contracts with U.S. companies account- “I know there were discussions [between tration,” Jay Brickman, vice-president of ed for $106 million of that $301 million total. the Cuban and Canadian governments] about Florida-based Crowley Maritime Corp., told Among other things, Cuba closed deals for Canada re-energizing its credit program. Reuters. “The Bush administration is very 150,000 tons of Canadian wheat worth $70 They have to offer something the U.S. can’t clear about its policy. People feel they won’t million for delivery next year. offer. I don’t know whether this wheat was get any trade and they have to go to other Alimport also agreed to buy 100,000 tons of markets. They have no choice.” peas and 3,500 tons of powdered milk from Sales of U.S. farm commodities to Cuba Canadian companies, deals worth a combined have totaled $1.8 billion since passage of the $75 million, not to mention 200,000 tons of Trade Sanctions Reform and Export Enhance- rice from Vietnam — the latter contract worth ment Act (TSRA) in 2000. Those sales peaked $90 million, according to Alimport Chairman at $392 million in 2004 and declined to $340.4 Pedro Alvarez. million last year (see chart at left). In addition, Cuba bought animal feed from NEBRASKA WINS WHEAT CONTRACT Mexico and the Dominican Republic, as well as supermarket products from Spain. Despite plummeting U.S. sales overall, at least one state scored big during FIHAV. CANADIANS SCORE BIG THIS YEAR Nebraska signed a deal to sell $10 million In 2007, Cuban food purchases from worth of wheat to Alimport through com- Canada will have increased 40% over 2006 fig- modities trader Louis Dreyfus. With this lat- ures due to difficulties in buying from the est contract — which was signed by visiting United States and despite the higher value of Gov. Dave Heineman — Nebraska has sold Canada’s “loonie” against the U.S. dollar (see more than $70 million in agricultural products CubaNews, November 2007, page 1). to Cuba since the Cornhusker State’s export In the 2006-07 marketing year ending Jul. relationship was established in 2005. 31, Canada shipped 89,000 tons of wheat to Heineman, leading his fourth visit to Cuba Cuba, down from 177,000 tons of wheat the as governor, was accompanied by representa- previous year. The 10-year average, according tives of Nebraska’s wheat, corn, soybean, to Reuters, is 77,500 tons. bought on credit, but Alvarez was quoted as beef and pork industries. “We compete with the Americans all saying he’s going to sign contracts first with “Nebraska has been rewarded for our dili- around the world, so we are very happy about the Canadians, then the Americans. gence in maintaining a strong export relation- this signing,” said Greg Arason, president “That’s a message to American companies ship with Cuba,” he said. “Our success here is and CEO of the Canadian Wheat Board. that the current restrictions are causing prob- due in large part to the hard work and prepa- Said Alvarez: “American producers are be- lems,” Jones concluded. “U.S. firms are at a ration of our Nebraska companies and the ing hurt by the embargo. Trade with the Uni- clear disadvantage because they can’t offer Nebraska Department of Agriculture.” ted States is uncertain because Cuban pay- credit. That’s why rice sales are down.” Added Greg Ibach, the state’s agriculture ments get blocked. Canadian businesspeople According to Marvin Lehrer, Latin America director: “This latest visit has helped further are very efficient, very strong and very com- director for the USA Rice Federation, U.S. the strong relationship weve built in recent petitive, and they don’t blockade us.” rice exports to Cuba dropped to 80,000 tons years, and puts Nebraska in a good position to That sentiment was echoed by Jones, last year from 175,000 tons in 2005.