US clarifies Cuba food rules, sales impact unclear
Fri Jul 29, 2005
WASHINGTON, July 29 (Reuters) - Exporters may face fewer complications in selling U.S. farm goods to Cuba under a Treasury Department clarification issued on Friday, one trade group said, but another doubted it would make any difference.
The clarification said vessels could leave U.S. ports as soon as a foreign bank confirmed receipt of payment. That could be slightly faster than rules in effect since February, experts said, and would spare sellers the expense of using letters of credit.
"It should speed the process up and, therefore, facilitate additional trade," said Kirby Jones of the U.S.-Cuba Trade Association. "The unknown is how the buyer (Cuba) reacts."
Sales of U.S. food exports to Cuba have fallen 25 percent since new rules took effect, requiring Cuba to pay for U.S. foods before they were shipped. Farm groups and their allies in Congress are campaigning for a return to rules under which ships could sail while exporters awaited payment.
The Treasury issued its clarification in order to free five nominees to senior Treasury jobs blocked by Sen. Max Baucus. The Montana Democrat said he hoped the clarification would provide "another option to restart ag sales to Cuba."
John Kavulich of the U.S.-Cuba Trade and Economic Council, which monitors trade between the nations, said the option highlighted by Treasury was "nothing new."
Cuba was unlikely to increase its cash purchases, Kavulich said, because it can get food from other nations for free or on credit. And, he said, Cuba's goal openly "remains to influence U.S. policy" by weakening the embargo.
Cash sales of food have been permitted to the Communist-ruled island since 2000 in a rare exception to the U.S. trade embargo dating from 1963. But shipments have fallen 25 percent since rules were tightened in February.
"This is a good interim move that should provide some relief to U.S. producers, but the underlying issue of cash payments from Cuba remains," said Bob Stallman, president of the largest U.S. farm group. Stallman said the American Farm Bureau Federation "will continue to work with Congress to legislatively overturn the Feb. 22 rule."
A Senate Appropriations subcommittee voted on July 19 to overturn the February rule.
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