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EXPERIENCES AND PROSPECTS ON PURCHASES FROM THE US

U.S. – Cuba Trade Association Florida Chapter. EXPERIENCES AND PROSPECTS ON PURCHASES FROM THE US. Pedro Alvarez Borrego Chairman & CEO Havana . April 2006. Aerial view of Havana.

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EXPERIENCES AND PROSPECTS ON PURCHASES FROM THE US

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  1. U.S. – Cuba Trade Association Florida Chapter EXPERIENCES AND PROSPECTS ON PURCHASES FROM THE US Pedro Alvarez Borrego Chairman & CEO Havana. April 2006

  2. Aerialview of Havana

  3. Alimport thanks the US-Cuba Trade Association and the sponsors of the Orlando Seminar for the invitation to attend this event in which potentially useful discussions will be held.

  4. 1) Nethercutt Amendment (2000) authorized US food and Medicine Sales. Cuba refused to purchase under terms of amendment, which reinforced existing restrictions. 2) Sept. 11/01, Cuba among 1st countries to condemn terrorist acts and offered assistance. 3) Hurricane Michelle (Nov./01) devastated half of the Island. Humanitarian aid offered by US Government. 4) Cuba proposed to purchase from US to replenish inventories and asked only that US licensing process be expedited. Initial Purchase for US$ 35 million (FOB terms)

  5. 5)American businesses show interest. Export and shipping licenses issued for up to one year. Cuba’s purchases reached US $140 million between Feb and September 2002. 6) US travel visas denied to various Alimport executives and specialists 7) 1st US Food & Agribusiness Exhibition (Sept./02), organized in less than three months, attracted 750 representatives from 288 businesses and associations from 33 States and Puerto Rico, as well as broad media coverage Additional US$ 112 million signed in contracts

  6. TRADING RESULTS TO-DATE • Contacted companies: over 4 300 Contacted states: 45 • Relations with ports: 23 • Deals with 159 firms in 35 states • Trade in 300 food & agricultural items • Over 128 farm associations and federations in 32 states have also been contacted.

  7. TRADING RESULTS TO-DATE • CUBA’S RANKING • AMONG THE US FOOD & AGRICULTURAL EXPORT MARKETS: • 25st • Wheat........... 12th ( US Wheat Association ) • Chicken......... 8th ( USAPEEC ) • Rice............... 3rd ( USA Rice Federation )

  8. TRADING RESULTS TO-DATE 1. Over US $1.8 billion in deals, including US $1.7 billion in actual cash payments for 5.9 million tons delivered (Total of 6.8 million MT in contracts). 1829 6.8 5.9 1711

  9. PAYMENTS MADE FOR FOOD IMPORTS ( USD ) TOTAL PAID YEAR 2001 4,433,654.28 TOTAL PAID YEAR 2002 175,858,590.81 TOTAL PAID YEAR 2003 343,947,276.14 TOTAL PAID YEAR 2004 474,113,308.38 TOTAL PAID YEAR 2005 540, 897,493.99 TOTAL PAID YEAR 2006 172, 700,050,40

  10. TRADING RESULTS TO-DATE 2. 73.0 % of the vessels involved in 713 Cuba journeys have been US flagged or chartered from 23 American ports. New ports to join the Cuba trade. Freight paid so far 180.0 MMUSD. 713 520

  11. EXISTING RESTRICTIONS • US Travel Ban: no American tourism • Cuban Exports prohibited • Cuba’s main cash sources for food purchases: Tourism and Exports • No US public or private credit allowed for the Cuba trade • Licensing requirement for product sales and related shipments

  12. IMPLICATIONS OF EXISTING RESTRICTIONS • American public does not benefit from Cuban exports (including unique and advanced life-saving drugs) • Fewer jobs generated in the US due to limited sales and restricted travel to new market

  13. IMPLICATIONS OF EXISTING RESTRICTIONS • Cumbersome US licensing policy deters participation by small and medium-sized American firms in Cuban food & ag. import market • Uncertainty about changing US trade & payment rules discourages Cuba from significantly expanding its US imports

  14. Alimport will welcome the elimination of the US travel ban on Cuba, a step consistent with the US Constitution, which will support Cuba’s incremental food imports, with expanded employment in the US, and facilitate currently restricted people to people contact

  15. Normalizing trade and travel relations Expert estimates show that normalized Cuba-US relations, inclusive of two-way travel, commerce and foreign investments, will see bilateral trade in goods and services of $21 billion in initial five years

  16. Cuba welcomes American tourists

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