Washington — A showdown is looming between the White House and Midwestern lawmakers who say new Bush administration rules are hurting the burgeoning farm trade with Cuba.
The dispute is over a rule issued by the Treasury Department in February that requires Cuba to pay in advance for food shipments from American exporters before they are shipped from U.S. ports.
Missouri Rep. Jo Ann Emerson inserted language last month in a massive transportation and housing bill to stop Treasury from enforcing the rule, calling it a "wrongheaded" policy that has already caused a 25 percent drop in agriculture sales to Cuba this year.
But the White House has threatened to veto the entire bill over Emerson's language, saying the stiffer rules are part of the sanctions to punish Fidel Castro's regime in Cuba. Still, the House kept the provision when it passed the bill last month and a measure with similar language is now working its way through the Senate.
"It's the most convoluted, ridiculous scheme that totally backfires on the people who support the administration most - farmers in rural America," said Emerson, a Republican.
By requiring payment to occur before shipment, Cuba has to own the rice before it leaves U.S. ports. David Coia, a spokesman for the USA Rice Federation, said the procedure is fraught with risks because Cuban exiles with claims against the Castro government could try to seize those shipments before they reach the island nation. Instead of facing those risks, Coia said Cuba is now turning to China and Vietnam to buy its rice.
"It's a huge problem, it's unfair and it goes against the spirit of what Congress intended," Coia said.
Farmers won a partial victory late Friday, when the Treasury Department said it would allow farmers to get around the rule by using a third-country bank as their agent. The agency clarified the rule under pressure from Sen. Max Baucus, D-Mont., who for months had blocked the confirmation of several Treasury Department nominees over the dispute.
"This kind of transaction is far from ideal," Baucus said in a written statement. "Sales will still be lost. But given the burdensome restrictions imposed by Treasury and the resulting plummet in agricultural sales to Cuba, something had to be done."
Baucus said farmers would never realize the full potential of the Cuban market as long as the rule remains in place and vowed to continue efforts to overturn it through legislation.
The U.S. trade embargo against Cuba has been in place since 1960, but the restrictions were eased somewhat four years ago when Congress opened the market to shipments of food, medicine and agricultural products.
To the delight of American farmers, Cuba has purchased more than $1.3 billion in agricultural commodities from the United States since the Trade Sanctions Reform and Export Enhancement Act was passed in 2001.
Treasury Department spokeswoman Molly Millerwise said the rule was clarified in February at the request of financial institutions dealing with sales to Cuba. While the policy is not meant to deter farmers from shipping their products to Cuba, she said the government strictly observes its sanctions policy.
That doesn't appease farmers. More than 40 groups, including the American Farm Bureau Federation, the National Association of State Departments of Agriculture and the U.S. Dairy Export Council, signed a letter to Congress earlier this year urging lawmakers to neutralize the payment in advance rule.
Congress has run into roadblocks before when it tried to relax sanctions on Cuba - such as lifting the ban on travel - only to see the measures dropped during negotiations with the Senate. But the exception for food and medicine has widespread support among rural, GOP-friendly districts.
Republican Rep. Jerry Moran of Kansas, for example, withheld his support for the Central American Free Trade Agreement until he could raise his concerns over Cuba trade issue with President Bush.
"What I wanted to make certain was that there was an awareness on the part of the president that Cuba sales matter to Kansas farmers and to American agriculture," Moran said.
Comments
LJWorld.com doesn’t necessarily condone the comments here, nor does it review every post. Read our full policy. Also, read about banned accounts and harassing comments.