South Carolina missing out on sales to Cuba is other states' gain

HAVANA — The Hotel Nacional's breakfast buffet covers half its cavernous basement, offering fruits, vegetables, omelets and pastries for just about every international taste.

Still, you could call the massive spread a simple continental breakfast — if that continent is North America.

The eggs are from Massachusetts, the tomatoes from California, the rice from Texas, the corn from Nebraska. The only thing in the room from South Carolina, however, is a couple of newspaper staffers sipping Cuban coffee.

Despite the embargo that cut most ties between the U.S. and this island nation more than 40 years ago, all but 13 states — including South Carolina — take advantage of an obscure federal law that allows them to regularly sell agricultural products to Cuba. Since 2001, U.S. farmers have sold more than $1.5 billion in food and timber here.

In 2004, South Carolina took the first step toward establishing business relations with the island. A trade delegation visited Havana and signed a deal to export $10 million worth of agricultural goods, mostly chickens, to Cuba. Four years later, the deal is dormant.

For now, South Carolina farmers are missing the boat.

"The purpose of the whole trip was to sell South Carolina goods," said state Rep. Chip Limehouse, R-Charleston, who was a member of that delegation. "It is a fairly complex transaction, and the Bush administration basically tightened things up. It's complicated and it's political."

South Carolina's loss is every other state's gain. Pedro Alvarez, chairman and chief executive officer of Alimport, the government-owned import agency, said that since U.S. law was changed to allow sales to Cuba, there have been more than 1,000 shipments of roughly 9.5 million tons of goods from the United States.

Even the Communist state paper, Granma, is printed on paper from Alabama.

"Your competitors are here, definitely," Alvarez told S.C. Press Association delegates visiting Cuba recently.

Cuba produces little of the food it serves its own people or tourists; the United States provides more than one-third. At restaurants in Old Habana, chicken from Georgia and Alabama is served alongside the staple dishes of black beans and rice. Much of the rice comes from the American Southwest, the beans from the Midwest.

Even some of the United States' more recognizable brands slip into the Cuban market place. It's easy to find a Coke, brought in from Mexico, or Louisiana Tabasco Sauce in most tourist restaurants.

Cuba has become an attractive customer for the United States because it is so close and because the island represents a new market. For officials here, food from the United States is preferred because of its quality and proximity. Everything arrives fresh, and the shipping costs are much lower than from Europe or anywhere else.

Charleston-based Maybank Industries has shipped goods to Cuba under a special license for years — among them flour from Texas and newsprint from Alabama. Jack Maybank Jr., president and CEO of the company, said the island nation is a great emerging market, one that U.S. companies should court.

"We have been going down there for the past seven years," Maybank said. "There is a huge business opportunity there. The key to it is figuring out the right niche."

Maybank continues to look for new markets for Cuban buyers, and he hopes to sell South Carolina goods to the country one day. From Charleston, shipments can reach Cuba in just a few days.

Most officials say the agreement between the state and Cuba fell by the wayside when former state Agricultural Commissioner Charles Sharpe, who brokered the deal, was indicted on federal charges of protecting a cockfighting ring. The indictment mired the Cuban agreement in politics.

"When you've got a stinking, rotten potato everybody gets away from it because it stinks," Sharpe told The Post and Courier recently.

Officials with the state Department of Agriculture say for now they are waiting to see what develops now that Raul Castro has taken over the country.

"We are monitoring the situation closely," said Stephen Hudson, public information coordinator for the Department of Agriculture. "We're going to have to see what develops in U.S. foreign policy."

Other states, however, aren't waiting. Alvarez said many of the states now dealing with Cuba have a lucrative place in line for further exports when the embargo ends. He said that within the first five years of normalized trade, U.S. farmers stand to make $21 billion.

"We know we are a small country, but a rather attractive market," he said. "There is no doubt once the blockade is lifted, the United States will have a very privileged position. U.S. products are of very good quality."

Trade with the island is not easy. The United States' policy toward Cuba, influenced to a large extent by Cuban exiles, dictates that no state can extend credit to the island, and transactions cannot go through U.S. banks.

Cuban officials concede that part of the island's woes are a result of the embargo, which they call a "blockade." Cuba's inability to export its goods — sugar, rum and some would say the best cigars in the world — to its potentially largest customer has hurt its finances. Some officials suggest that the U.S. would become 60 percent of Cuba's export market if trade were reopened.

Still, Alvarez contends the United States and South Carolina are leaving money on the table.

"We're not looking for charity," he said. "We are a paying customer."

Limehouse hopes that trade will reopen soon.

"Cuba should be one of our top trading partners," he said. "I have hope that this will change. Stopping food from going there only hurts the oppressed people of Cuba, not the government. Aren't we supposed to be a superpower that helps others, our people and theirs?"

Alvarez and other officials ask the states they trade with to lobby for an end to the embargo, not only because it makes business sense, but because — they claim — it violates the U.S. Constitution's promise of freedom.

Besides, he said, the U.S. regularly breaks its own embargo. "Are you not exporting our baseball players?"

Post and Courier reporter Ron Menchaca contributed to this report. Reach Brian Hicks at bhicks@postandcourier.com or 937-5561.