Stagnant US exports to Cuba: Brazil, China benefit due to US Trade Embargo [View all]

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http://m.apnews.com/ap/db_268779/contentdetail.htm?contentguid=8Wy6E9pn

PETER ORSI
Published: Today

HAVANA (AP) - Kellogg's. Gatorade. Hormel. Hunt.

Many of America's best-known brands were on display at a Havana exposition center this past week as representatives hawked some of the few U.S. products that can legally be exported to Cuba, thanks to an exception to the U.S. embargo allowing cash-up-front sales of food, agricultural goods and medicine.

But cold numbers belie the enthusiasm on the convention center floor. Cuban purchases of U.S. goods have plunged as the island increasingly turns to countries like China, Brazil, Vietnam and Venezuela, which offer cheaper deals, long-term credits and less hassle over payment and shipping.

"The pattern that we see is it's just continuing to either be lower each year, or if it does increase, it's just not a lot at all," said John Kavulich, senior policy adviser to the New York-based U.S.-Cuba Trade and Economic Council. "No executives should be going to a travel agent and buying a ticket to go down to Havana thinking that there's going to be a change."

U.S. sales of food and agricultural commodities to the communist-run island began more than a decade ago with the Trade Sanctions Reform Act enacted in 2000 under President Clinton. Modest sales of $138 million the following year rose steadily to a peak of $710 million in 2008, according to statistics calculated by Kavulich's group.

The value of U.S. exports to Cuba has since plummeted to just over half that last year at $358 million. It was $250 million through the first six months of 2012, with no sign of improvement.

It's been a tenuous trade from the beginning, partly due to U.S. rules requiring cash payment before goods can even be shipped. Payments must be made through third-party banking systems that take a hefty cut of each transaction, besides the fees levied on multiple currency swaps. Shipping is complicated by U.S. embargo regulations. Moreover, the PR value of buying Made In America faded for Cuba as it became commonplace to see Coca-Cola in tourist hotels and Miller beer on store shelves. more at link