The Cuban Kong
In his February 19 "state of the port" speech, Port of Miami director Chuck Towsley ignored the ravenous billion-ton Gorilla 100 miles away, namely the Cuban economy. A few years ago, that omission would have been unremarkable in a county where the craving to starve out Fidel Castro has been as Cuban-American as pumpkin pie. But under the Trade Sanctions Reform and Export Enhancement Act of 2000, U.S. companies can now sell the socialist Godzilla hundreds of products, from basic grains, fruits, vegetables, and meats to pasta, chocolate, ice cream, beer, wine, and frog's legs. Best of all, the law requires the Cuban government to pay with cash. Over the past year the Gorilla consumed about $140 million in U.S. food and agricultural products. In coming years, Florida's share of such sales could reach $28 million per year, if the U.S. embargo on Cuba were fully lifted. Nationwide, the proceeds could exceed one billion dollars annually.
But in the town that the embargo built, so forbidden are thoughts of the Gorilla that key Miami-Dade trade officials, when contacted by New Times, said they weren't even aware that U.S. food and agricultural sales to Cuba are now legal. Others who are familiar with the law still cower at the mere mention of the Cuban Kong.
Meanwhile county and state officials from just about every major U.S. port within striking distance of Cuba, except Miami's, have traveled to Havana with members of the private sector seeking trade deals. For example, this past September nine ports that compete for business in the Caribbean Basin sent delegations to the U.S. Food and Agribusiness Exhibition, a trade show organized by Connecticut-based trade promoter Peter Nathan. Those ports included: Jacksonville and Pensacola, Florida; Corpus Christi and Freeport, Texas; Lake Charles and New Orleans, Louisiana; and the Georgia Port Authority. While at the event dozens of U.S. companies (including nine from Florida) signed about $92 million in sales contracts with the Cuban government.
Miami-Dade also stayed away from a similar event at the U.S.-Cuba Business Conference in Cancun and Havana this past February 17-19. Officials from these ports did attend: Beaumont, Corpus Christi, Galveston, and Houston, Texas; Lake Charles, Louisiana; the Georgia Port Authority; and Tampa's Port Manatee.
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By virtually all accounts Towsley has run the port like a tight ship during his five-year tenure. In 2002 cargo shipments in and out of the port rose 5.3 percent to 8.6 million tons, while Broward's Port Everglades suffered a 12 percent decline. Towsley is hoping to install six additional gantry cranes, used to lift cargo containers from truck to freighter, to accommodate increased business at the county's "second-most important economic generator," as he called the port in his address.
But the Gorilla still gives county officials the jitters. A port spokeswoman recently told a Reuters reporter that Towsley has no plans involving trade with Cuba and declined further comment. The February 3 story quoted an anonymous businessman as saying: "If the port director of Miami ever suggested that he was going to do business with Cuba he wouldn't be able to put the ... phone down before being fired." But in an interview with New Times the day before his speech, Towsley dispelled such paranoia. He suggested the Port of Miami is ready for commerce with the socialist island. "We're well positioned because of our location and facilities to go after a good fair share of that business.... We're doing what we need to do should our customers want to go after that business. They have the facilities and the opportunity to do that here in Miami."
Towsley and his boss, County Manager Steve Shiver, aren't about to stick their necks out, though, like their counterparts from Galveston to Jacksonville. He confirmed that they have zero plans to capture the new Cuban market. Towsley maintains he hasn't even discussed the topic with anyone in Miami-Dade government. He denied his passive approach was the result of any anti-Castro mandates emanating from Mayor Penelas or county commissioners. "I view a free market with Cuba the same as I would view the opening of any other market," Towsley declared. "We don't necessarily make improvements to increase our capacity or efficiencies based upon any one particular country or market." None of the $140 million in commercial cargo destined for Cuba went through the Port of Miami, he added. (However, two cows, two steers, two buffalo, two sheep, and two pigs traveled by DHL plane from Miami International Airport for the Food and Agribusiness Exhibition last September, and the Cuban government bought them.)
Miami-Dade is poised to miss future opportunities to exploit the Gorilla's appetite, which can only grow. In a new study based on U.S. Agriculture Department data, Texas A&M economists Parr Rosson and Flynn Adcock estimate that with no further loosening of the embargo U.S. food and agricultural exports to Cuba are likely to be at least $37 million per year. Based on current practices Florida's share of that would be only $272,000. But if sanctions were lifted, Rosson and Adcock project, that figure could climb to $28 million, depending on how fast Cuba's centrally planned economy expands. Those exports would stimulate another $15 million to $61 million for related businesses (such as export packers, warehouse operators, customs brokers, port operators, and shippers) and create 150 to 500 new jobs. "What somebody ought to do is get licensed [by the U.S. Treasury Department] to go," Rosson drawled, "and then just hop on one of those charters and visit with Alimport, which is [Cuba's] food import agency, start the wheels to turn, and do some business." The Port of Miami is especially well-positioned to capitalize on Florida's processed grocery goods and fertilizer trades, as well as ferryboat traffic, he noted.
This is all news to Mayor Alex Penelas's trade office, also known as the new Jay Malina International Trade Consortium. The 39-member organization, headquartered down the hall from the mayor's desk, is a taxpayer-funded agency composed of Miami-Dade officials, trade associations, and private business people. The mayor's international trade coordinator Leslie Herren told New Times she was unaware that food and agricultural sales to Cuba are now allowed under U.S. law. "I am not involved in any Cuban issues of any nature," she stressed. "I know nothing about this. And I usually hear everything related to international trade. You might want to check with the port."
Relieved to change the subject, Herren noted the consortium is busy with two exciting new projects, one involving an Irish trade mission to Miami-Dade, the other a Miami-Dade trade mission to South Africa. But capturing Cuban trade for the county has never come up. "We try to respond to what we hear from the, you know, taxpayers, the Miami-Dade County residents. And this just is not something that has been addressed."
The consortium chairman, county Commissioner Pepe Diaz, also did not know that U.S. food and agricultural sales to Cuba became legal in 2000, but earnestly vowed to investigate the situation. "It's pretty taboo, but if it's happening and it relates to trade I have to be aware of it, since I'm the chair," he affirmed. He predicted he would have serious questions about any food sales but said he was open to discussing the issue. "Is it going to the people there or is it going to the government?" he wondered. "I run a strong line with a government that doesn't respect the people that it represents. At the same time I know we gotta open up and deal with the people. If the food is going to the people who need it, there's not a problem with that. But if the food is just going to generate cash for Castro's hotels and stuff then I might have a problem."
With pluralists like Diaz in the consortium it could be only a matter of time before one of them suggests a Cuban Trade Task Force, similar to the African Trade Task Force that Mayor Penelas formed in 1998. In fact the idea is already circulating among local free-trade promoters. "We just need to start a dialogue among the players in our community to deal with this issue," said Ben Neji, vice president of the Americas Food and Beverage Trade Show & Conference, an annual exhibition in Miami-Dade County. "There's no dialogue. There's no communication."
Such a task force, Neji allowed, would be "a group of clairvoyant people who believe in this community, who believe and care about the future of this community. A group that involves the private sector, local government, the county. Just to approach the subject. Once we have the core group together and agreed, let's make Cuba our priority for the next five, ten years, then we're talking." Neji emphasized this was his own opinion and not that of his employer, World Trade Center Miami, a nonprofit organization with offices in about 300 cities around the world. He also hastened to add: "Believe me, I'm not pro-Castro whatsoever. It's the other way around. My thinking is that we really have to change things in Cuba and ... open up to democracy. The best way to do it is really within the norms of the law. I know there's an embargo on Cuba, but legally we can [now] sell food."
With a majority of el exilio favoring dialogue over confrontation with Cuban officials, according to recent opinion polls, perhaps a bolder county trade policy toward Havana is in order. When Neji staged a seminar on selling food to Cuba at the food and beverage show this past December, he received angry e-mails and phone calls from only one anti-Castro activist. The featured speaker was John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a New York-based group formed in 1994 to provide accurate information about the island to businesses. Kavulich explained how to apply for licenses from the U.S. Treasury and Commerce departments, which federal law requires of U.S. businesses that export to Cuba. He told participants that Cuba is one of the safest export markets for the U.S. because the transactions are cash only.
But there are dangers, such as U.S. Rep. Lincoln Diaz-Balart (R-Fla.), who is powerful enough to destroy trade deals with Cuba even when the players are far from his Miami-Dade district. "Some people in Tampa wanted to take people [to Cuba] by ferry," he announced to listeners on Radio Mambí (WAQI-AM 710) one evening last month. "I intervened through the Department of State. And they have assured me that the ferry isn't going." He praised President Bush for his "extraordinary manifestation of solidarity" in agreeing to reject the ferry operator's license application.
Leadership like that may explain why county officials have yet to overcome the Gorilla phobia. At Towsley's state of the port address Miami-Dade Commissioner Dennis Moss acknowledged he'd heard about all the food and agricultural sales to Cuba. Moss chairs the county commission's transportation committee, a logical venue for discussions on how the port and county could cash in on the emerging market across the Florida Straits. But the subject has never come up in his committee, he reported with a smile. He added cheerfully that he's not going to bring it up either, so as not to offend anyone. "We have to be sensitive to the community," he submitted.
County Manager Steve Shiver preferred to avoid the issue of whether Miami-Dade should aggressively seek a piece of the Cuban trade action. "Uh, I'll have to think about that one more," he said and asked this reporter to call him back later. At press time, Shiver was still thinking.
Shiver and other Miami-Dade officials will soon have another chance to conquer their fears. The second U.S. Food and Agribusiness Exhibition is scheduled for Havana in January 2004.
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