AMCHAM CUBA NEWSLETTER                                                           APRIL 2001

TABLE OF CONTENTS       

1.       Views on US-Cuba policies are many, but Congressional initiatives

unlikely to alter US-Cuba policies soon

2. Cuba’s economic problems & initiatives

3. Castro’s polemics continue

4. Meetings in and about Cuba

5. New information sources

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1. Panorama of US policy initiatives on US policies, Congressional prospects

Bush’s nominee for top State Department Latin America post controversial.  Otto J. Reich, Cuban-born former US ambassador to Venezuela, lobbyist for Bacardi-Martini and contributor to the 1996 Helms-Burton Act, is being challenged for his role in the Reagan Administration.  The Office of Public Diplomacy for Latin America and the Caribbean then headed by Reich, was criticized for alleged illegal and covert propaganda related to Central America’s internal struggles and US Iran-contra initiatives.  Democrats charge that Reich therefore could not conduct responsible foreign policy in Latin America, but Senate Foreign Relations Committee Chairman Jesse Helms (R-NC) dismisses the criticism as based on Reich’s strong anti-Castro views.  Reich is supported by the Cuban American National Foundation (CANF), and is on the board of Freedom House which has $1.3 million in US aid to support dissidents and promote democracy in Cuba – an effort which critics argue is a pointless endeavor because Castro's regime does not allow citizens to organize.

Reich’s views are consistent with Administration statements to Congress that it will not relax trade restrictions with Cuba, and with Secretary of State Colin Powell’s reaffirmation before the UN Human Rights Commission of Cuba’s poor record and the need to expand censure of Cuba.  Powell said, “[Castro] has demonstrated previously that, if you start to release… sanctions or if you try to cooperate with him, he will find a way to use those resources to…strengthen the regime", so that sanctions must be enforced until he is no longer in power.

Consistent with this Administration view, we note that Treasury denied a 2001 licensing application for this year’s St. Petersburg, Florida, to Cuba yacht race, suspended in 1959 and first resumed in 1996. 

Congressional initiatives may not quickly alter US-Cuba policies.   On March 13, Dr. Julia Sweig of the Council on Foreign Relations told a full AmCham Cuba audience that 15 pieces of legislation before Congress seeking to loosen the embargo face Administration intransigence.  Drawing on her 18 visits to Cuba since 1984 and years as analyst of US-Cuba policies, she said current bipartisan support for change reflects a growing consensus that sanctions are not effective if they remain unilateral.  She reported growing public willingness to defy the views of Cuban-Americans whose reputation suffered from both the Elian Gonzales incident and the closeness of the Florida presidential vote (including 180,000 Cuban-Americans).  Of particular interest, she urged watching the "Internal Cuban Opposition Act" supported by CANF which would authorize funds for Cuban NGOs who publicly oppose the…Government and "criminalize" Americans who cooperate with Cuba or do not conform to other specified standards.  She asserted that help to protesting local NGOs cannot succeed, as it did in Poland, because “Cuba has no civil society.”

For now, Sweig proposes, "little engagements" with Cuba's government might achieve "little reforms" - and would not require Congressional oversight.  She hopes the Administration will neither roll back recent relaxations of US law on Cuba nor cancel the embargo.  She predicts that Bush may maintain immigration restrictions despite pressures for changes, and is likely to renew Title III of the Helms-Burton law for international trade reasons.  To forestall a Cuban backlash, Jason Feer of CubaNews urged that US changes in policy be gradual.  John Bolden of Caterpillar thinks European businesses in Cuba will continue to grow, effecting on-the-ground changes in business practices but no real reforms.

Another bill, introduced March 28, is sponsored by a "bipartisan group of 86” who seek more active aid for dissidents in Cuba.  Reuters says a broad coalition, led by Americans for Humanitarian Trade with Cuba, will lobby President Bush to allow food and medicine sales to Cuba.  This coalition includes the American Farm Bureau Assn., the Medical Device Manufacturers Assn., rice growers from Louisiana and Texas, religious groups, and US port authorities, as well as David Rockefeller, former Federal Reserve Chairman Paul Volcker, former CIA director James Schlesinger, and ex-US Trade Representative Carla Hills.  A visit to Cuba led by Rep. George Nethercutt (R-WA), who took the lead on last August’s legislation to allow food and medicine sales, was unsuccessful in convincing Cuban officials to purchase US agricultural products, despite restrictions which still block federal and commercial bank financing.  A separate obstacle to implementation of the Nethercutt legislation lies in Bush’s failure to resolve whether the Commerce or Treasury Department should oversee Cuba trade.

Other bipartisan efforts would expand humanitarian trade.  Legislation introduced March 20 by Reps. Joe Serrano (D-NY) and Leach (R-IL) and Sen. Christopher Dodd (D-CT) would eliminate shipping restrictions, permit banks to finance shipment, allow US importation of Cuban medical products not available in the US, lift the travel ban on US citizens, and allow scholarships for Cuban students in American graduate schools.   

A new lobby, the Cuban Policy Foundation, intends to counter CANF's influence in Washington, according to Reuters, and represent "a silent majority, including Cuban-Americans" who do not support unilateral trade sanctions on Cuba.  Sally Grooms Cowal, whose past titles include Ambassador to Trinidad and Tobago, Deputy Assistant Secretary of State for Inter-American Affairs, and Minister-Counselor for Public Affairs at the US Embassy in Mexico City, presides over the group.  Its goals include creating grass-roots support within the US, educating people on immigration and drug trafficking --which she believes should be the main US interests in Cuba, and creating a more workable dialogue with Havana.  William S. Rogers, member of AmCham Cuba's Advisory Council, is Chairman of the Foundation's board. 

2. Mixed reports on Cuba’s economic prospects.

Cuba’s shipping potential judged good.  Recent visitor Michael Fabey of Hampton Roads, VA, reports in Latintrade.com that he found Havana's port "one of the most efficient…in the Americas."  It moves 45 boxes of cargo/hr and over 100,000 containers of cargo/ yr, according to Cuban government figures.  He said its generally modern and efficient condition was due to foreign investment, primarily from Spain, Italy, and Germany.  Cuba's major shipping firm, Coral Lines, calls at international ports, except for the US.  Fabey speculated that if the US were to lift the embargo, Cuba would once again become a "hub for the Americas."

Cuban raw sugar output is again low, well short of its 3.7 million-ton forecast for 2001, of which 3 million was to be for export.  Drought last year lowered kept harvests below a 4.5 million ton estimate.  This year, only three of 13 provinces pass the 200,000-ton mark and rainfall has delayed harvesting and milling, especially on the North Coast.  Milling is at 71% capacity compared to 80% expected by the industry, and Cuba plans to extend mill operations to May to try to reach the goal, though cane yields usually start to decline in March.  Humid soil, making mechanized harvesting impossible, has caused some mills to close.

Cuban scientists try to find vaccines for cholera and AIDS, following their successful Meningitis B vaccine production.  Science and Technology Minister Rosa Elena Simeon told Reuters that "vaccines against cholera and AIDS are at the stages of clinical tests" and a cholera vaccine "should be ready in the next 2-3 years."  Reuters reported that Cuba has exported medical products to 24 nations, primarily in the Third World, since the late 1980s. 

US trade sanctions are blamed for making long-distance phone calls to Cuba more difficult for phone companies like AT&T and Sprint.  Bloomberg News says telephone circuits between the US and Cuba have been significantly reduced.  The controversy stems from the 1996 Brothers to the Rescue shoot-down, after which ETECSA cut direct phone links with the US and a surcharge was placed on calls to Cuba.  Though third party phone links were set up to compensate for the cut in the direct phone link, US sanctions bar US phone companies from reimbursing third party phone companies, many of whom drop out because they cannot collect the surcharge.  Reports are that Cuban authorities have fur-ther dampened the situation by setting up Internet fire-walls to block communication access through the Web.  

10% rise in Cuban rum sales is predicted by Havana Club Intl., joint Cuban venture with the French firm Pernod Ricard.  It claims that 75% of bottles are sold internationally, and that it will sell to the US if the embargo is lifted.

An overview of Cuba’s economy was offered by Benjamin Tyree after his recent trip to Cuba.  The deputy editor of the Commentary pages of The Washington Times reported on the popularity of “paladares,” private restaurants that often serve more meals than permitted; on widespread presence of US goods like musical equipment and Coca-Cola, on the highly profitable growth of the tourism industry created mainly by joint ventures between Cuba and a foreign government; and finally on troubles created by the “dollar economy.” 

3. Castro’s posturing doesn’t change.  At the annual Inter-Parliamentary Union meeting in Havana April 1-7, Castro regretted that members of the US Congress who are “sincere, intelligent and realistic legislators” are only “a clear minority” and attacked Bush’s rejection of the 1997 Kyoto pact to reduce global warming.  Reuters said Cuban dissidents hoped to use the meeting to emphasize the regime’s political limitations, to address the issue of political prisoners, and contact foreign leaders. 

Castro has told his team that he will challenge US patents by producing AIDS drugs, and later will produce other US brand products.  He defended such actions by alleging US patent violations against Cuba such as by  producing rum under the Havana Club name whose trademark Cuba bought from the original Cuban owner.  He commended South Africa and Brazil for producing cheaper, generic AIDS drugs.

Cuba accused the US of fostering drug trafficking by not signing a cooperation accord with Havana, whereas it has 28 drug trafficking accords with other nations.  Justice Minister Roberto Diaz Sotolongo said cooperation with US anti-narcotics agencies is limited to case-by-case efforts, proving that the US government is “the principal ally of narco-traffickers in the region.”

In a five-hour interview, Castro told Tribune Co. executives and writers that communism will not be defeated after his death, since the revolution’s ideas “are stronger than the people that would change them.”  The interview, after the opening of Tribune offices in Cuba – the third US media group with offices in Havana - covered topics ranging from the Internet to expensive seafood.  

4. Meetings on Cuba:  

On March 29 at the US Chamber of Commerce, John Murphy said his mission to Cuba March 14-16 learned that Cuba it wants training from US manufacturers on the large amounts of US information technology (IT) software and hardware (e.g. Cisco, IBM, Microsoft) it has bought from third countries.  He says Cuba wants to educate its citizens on computers and the Internet and reported pro-gress in setting up “Intranets” [through which information can be controlled].  The US Chamber and Cisco will explore legal aspects of creating a Networking Academy in Cuba.  Murphy expects Cuba to request UN assistance for IT training.  Others present at the debriefing voiced desire for a cohesive, informed special interest group, broader than the US business community, to include agriculture and labor, to pursue Cuba questions.  Gregori Lebedev, COO, said the Chamber will be writing the Administration to urge movement on US-Cuba policy.

Also at the US Chamber’s March 29 lunch, Philip Peters, VP of the Lexington Institute, expressed his dissatisfaction with unilateral sanctions and urged better US-Cuban relations through more communications between the business communities and lifting US travel restrictions.

May 19-26 in Havana, a research seminar, offered by the Univ. of New Mexico's Cuba Research & Analysis Group and Cuba’s Instituto Superior de Relaciones Internacionales,.hopes to "enhance relations between the peoples of the US and Cuba through research, educational, cultural, and humanitarian activities”.  Cuban foreign policy issues will be discussed with representatives of the Cuban Foreign Ministry and the Cuban diplomatic corps, and perhaps representatives of the US Interest Section in Havana.  Contact CRAG Prof. Nelson Valdes at (505) 344-5049 or (505) 255-1131 or e-mail elhead@unm.edu or nvaldes@unm.edu.

July 9-11 at Miami’s InterContinental Hotel, a Conference on Developing e-Business in Latin America, Latintech 2001, will be hosted by the Strategic Research Institute.  Both Latin American and US executives will hear presentations by AOL Latin America, CITIGROUP, CLAXSON INTERACTIVE GROUP, COMPAQ COMPUTER CORPORATION, and more.  Contact www. srinstitute.com/cx357or fax 646-336-5891.

On May 24-31, an educational trip to explore Cuba’s African cultural heritage will be sponsored by the African American Cultural Society and the Caribbean American Children Foundation.  Contact Dr. Alberto Jones: tel: 904- 445-4812 or e-mail cacf2  aol.com.

On June 1, the National Policy Association will hold its second annual International Conference on Best Busi-ness Practices and Worker Rights in Cuba at Montreal’s Renaissance Hotel.  AmCham Cuba and representatives of labor, business and academia will be meeting with Canadian and Mexican groups for the discussions. 

July 6-9, another US-Cuba Business Summit will be held in Havana for US business executives in private sessions with Cuban counterparts and other company executives interested in working in Cuba.  For more information, Kirby Jones, Alamar Associates Summit Chairman, is at tel: 202- 530-5234 and e-mail alacuba  aol.com.

5. Sources and resources.  Cuba’s diversification of its trade relations is highlighted in Benjamin Tyree's recent series on Cuba in The Washington Times.  Maria de la Luz B'Hamel of Cuba’s Foreign Commerce Ministry told Tyree that, while ten years ago 80% of Cuba's foreign trade was with the Eastern Bloc, today 40% of trade is with Europe, and Latin America and Canada together account for a like amount.  She said "more than 3,000 US trademarks have been registered in Cuba by more than 700 companies." 

A new book in English and Spanish, Playa Girón/Bay of Pigs: Washington's First Military Defeat in the Americas, by Fidel Castro and José Ramón Fernández, was issued by Pathfinder Press in honor of the 40^th anniversary meetings of the Bay of Pigs invasion March 17-19, 1961.  The meetings, which got significant US media attention, were sponsored by the Univ. of Havana, Cuba’s government, and the National Security Archive, and attended by veterans from both sides of the invasion, including former CIA officials, Kennedy advisors, and Fidel himself.  Both governments issued new information on the US invasion.  At its closing, participants conveyed a sense of reconciliation and hope that dialogue will continue.  The 278-page book includes some Castro speeches, and can be bought from Pathfinder, 410 West St., NY, NY 10014, tel. 212- 741-0690, e-mail pathfinderpress  compuserve.com.

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We look forward to seeing you May 9 at the National Press Club in Washington where Amb. Dennis Hays and Dr. Wayne Smith will articulate the pros and cons of US-Cuba policy.

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Sincerely,

Phoebe Lansdale                                   April 18, 2001

Executive Director

Editorial review:  Robert Weekley, President