Adding Pointless Bureaucracy That No One Wanted
Bush Administration Continues Fight Against Free Market
The Bush administration is harming Alabama by cutting its ability to do business with Cubans. Why would it pursue such a stupid policy?
Here is an editorial that appeared recently in the Montgomery Advertiser (Alabama, U.S.).
Cuba cash rule bad for stateAnyone looking for an example of how a bureaucratic decision in Washington can have a powerful impact on a state will find one in this week's lamentable decision by the Treasury Department to change the rules on U.S. sales to Cuba. This decision will hurt Alabama, which is beginning to develop a significant trade relationship with Cuba.
For 40 years, Washington imposed a trade embargo on Cuba in what proved to be one of the least successful foreign policy maneuvers in history. The intent was to weaken the communist regime of Fidel Castro, still the president of the island nation nearly half a century after the revolution he led there toppled the previous government.
It failed miserably. Clearly, Castro himself never suffered and the only harm done was to the Cuban people. Finally, in 2000, the policy was altered to allow sales of agricultural and medical products.
That opened a long-closed door for Alabama, where the state's economy is a good fit for trade with Cuba. Two of the things Cuba most needs to import are also major elements of Alabama's economy -- forest products and poultry.
The port of Mobile is another natural for trade with Cuba. It allows easy shipment of Alabama products there, as well as products from other states.
This is not some minor market. A trade mission to Cuba in December resulted in $18 million in arranged sales of Alabama wood and poultry products. Delegates from other states were there as well and agreements were reached for sales of $125 million in U.S. farm products. About $50 million of that will ship through the port of Mobile, according to state Agriculture Commissioner Ron Sparks.
But this beneficial trade relationship is threatened by the Treasury Department's unwise decision on payment practices.
Since the 2000 policy change, exporters have been permitted to ship their products to Havana Bay, then physically hand them over to Cuba once a third-party bank had transferred payment to a U.S. bank. Now, however, the Treasury Department's Office of Foreign Asset Control has decreed, cash payment must be made before the shipment. That is widely seen as damaging to U.S. trade prospects and as a needless bureaucratic impediment.
Back in December, when the arrangement was under review by OFAC, Sparks warned that a change in payment policies would not be good for Alabama. "It's either Alabama fills these chicken orders or Brazil fills these chicken orders," he said at the time. "If someone else fills these chicken orders, we're not going to get them back."
"Seldom has the use of food as a foreign policy weapon been successful," said Sen. Pat Roberts of Kansas, who represents a major agricultural state. "The position taken by OFAC represents a policy decision that will harm both American producers and the Cuban people."
He's right. Payment upon transfer of title to the goods had been the accepted practice since the loosening of the embargo in 2000. There is no valid reason to change it. OFAC's claim that it is being "steadfast in effectively administering the Cuba sanctions program to hasten freedom to the Cuban people" is absurd.
Hasten freedom? After 40 years of unrelieved failure in that effort, that argument just won't fly.
Also see --
Fred Foldvary on Trade With Cuba
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