Virginia, Maryland Prepare for Cuban Detente

[Jimmy2]

Virginia and Maryland trade officials, sensing winds of change in the tempestuous relationship between the United States and Cuba, are hustling to build markets for their goods in the event two countries normalize relations further.

Virginia agriculture has already benefited from the relaxation of the 47-year-old trade embargo with Cuba, increasing exports from less than $1 million to $40 million in five years. Maryland has been developing farm trade in Cuba, though so far on a more modest scale. Last year, Maryland spent $6,000 on a trade mission that sewed up a $12.8-million deal on soybeans.

"There's just a lot of excitement," said Todd P. Haymore, commissioner of the Virginia Department of Agriculture and Consumer Services. "We feel certain that things are going to happen based on what the Obama administration has already done -- just the fact that we're talking about changing policies in place for 40 years or more."

Even the Cuban American National Foundation, a Miami-based organization that applied its political clout to keeping the door shut to Cuba, has reconsidered the embargo.

"If you look at the last few years, I think the door has already been about wide open," said Francisco "Pepe" Hernandez, the group's president.

Virginia made its first deals with Cuba under former governor Mark R. Warner and now ranks sixth among U.S. states exporting to Cuba, Haymore said. In 2003, the commonwealth shipped $838,009 worth of soybeans and apples to Cuba. That marked the first such export from Virginia to the island since the U.S. embargo was imposed in 1962. Last year, Virginia tallied $40.7 million in exports to Cuba, including pork, apples and soybeans.

The commonwealth's deep-water port in Chesapeake is also a conduit for the region. Maryland, which no longer has the capability to ship soybeans from Baltimore, also sends shipments to Cuba through Virginia. Dulles International Airport is an important hub too, moving nearly $1 million worth of goods to Cuba in 2008.

Haymore, who traveled to Cuba twice in 2007 and 2008, said in an interview that he anticipates greater trade in poultry, wood products and livestock. Virginia's wineries also hope to crack the Cuban market, Haymore said. The new markets are vital to an industry that remains Virginia's largest, pumping $55 billion a year into the economy while also preserving open land.

"If we could open a new line of trade with Cuba, that would be good for everybody," said Cameron Gibson, a soybean farmer in Orange County, Va., who sells to the Perdue processing plant in Chesapeake.

President Obama signaled an interest in warmer relations with a modest step on easing travel restrictions for Cuban Americans and allowing U.S. telecommunications firms to invest in Cuba. Cuban President Raul Castro seemed to reciprocate the goodwill when he said that everything was on the table for discussions, including human rights.

Late last month, however, former president Fidel Castro, who still wields enormous influence, accused Obama of misinterpreting his brother's remarks and bristled at calls for a wide-ranging debate or the release of political prisoners, casting doubt on the leadership's intentions for detente.

Some Americans, too, are uneasy about dealing with Cuba's repressive leadership.

"That's always been one of the issues -- whether we should be trading with a regime like the one that currently exists in Cuba," said **** Atkinson, executive director of the Virginia Soybean Association. "It's something for strong debate."

President John F. Kennedy imposed the comprehensive trade embargo in February 1962 in retaliation for the seizure of U.S. property by Fidel Castro's new government. Thanks to lobbying from farm lobbyists, the Trade Sanctions Reform and Export Enhancement Act of 2000 allowed a narrow trade of food products and medical goods. The first shipment to Cuba contained corn sold by Archer Daniels Midland, the Decatur, Ill.-based agricultural conglomerate. By 2004, the United States had supplanted Europe as the top exporter to Cuba.

In 2005, the Bush administration again tightened restrictions. These required cash payments for U.S. exports to Cuba before the goods left port or financing through letters of credit guaranteed by financial institutions in a third nation, usually in Europe.

Attitudes are shifting. Hernandez said his group changed its position because Fidel Castro has shown signs of exiting his unrivaled position of power and because the standard of living has plummeted in Cuba in recent years. The Cuban American community's support for sanctions against Cuba also has waned.

But John S. Kavulich II, senior policy adviser for the U.S.-Cuba Trade and Economic Council, said state officials and private businesspeople should be wary about rosy predictions of Cuban trade. He argued that a significant reason U.S. exporters have been pleased about the trade is because of the existing financial restrictions that ensure they receive payment for their goods.

"This is still a bankrupt country," Kavulich said.