- The Washington Times - Tuesday, July 11, 2000

Industry groups opposed to U.S. economic sanctions have soured on House legislation to ease the nation's trade embargo against Cuba, lobbyists said yesterday.

A bill sponsored by Rep. George Nethercutt, Washington Republican, would have significantly relaxed prohibitions on the sale of food and medicine, and allowed more travel to the island.

But additional prohibitions Mr. Nethercutt added as part of negotiations with the House Republican leadership at the end of June have diminished the commercial value of the changes, business groups said.

"When you have a Christmas tree, people seem to want to come and decorate it," Thomas Donahue, president of the U.S. Chamber of Commerce, said yesterday.

After the initial euphoria surrounding efforts by the House leadership, Mr. Nethercutt and Florida Republicans to craft a compromise, many business lobbyists concluded that the legislation is a step backward.

In addition to Cuba, the bill was written to expand commercial ties with Iran, Libya, Sudan and North Korea, and to require congressional approval of any future sanctions the president might impose.

House negotiators hammered out the deal on June 28, and Mr. Nethercutt got a commitment to put the measure into the agriculture appropriations bill in an upcoming House-Senate conference that would reconcile different versions of the bill. The House is likely to pass that bill this week, and the Senate could follow suit by Friday.

In the Senate, Sen. Christopher J. Dodd, Connecticut Democrat, has vowed to kill the Nethercutt bill, and is trying to win over other members. Mr. Dodd is pushing legislation included by Sen. Byron L. Dorgan, North Dakota Democrat, in the Senate agricultural appropriations bill that would ease the embargo with fewer conditions.

Sen. Max Baucus of Montana, an influential Democrat on trade issues, announced yesterday that he, too, would oppose the House compromise in its current form.

"This recent House deal is billed as a move to lift unilateral sanctions," Mr. Baucus said. "In fact, it does the opposite."

Also, President Clinton's initial skepticism toward the House bill has hardened into the conclusion among the White House staff that the bill would have very little practical effect on trade with Cuba, a White House official said.

U.S. food sales to Cuba reached $4.5 billion from 1980 to 1992, but quickly fell to nearly zero after passage in 1992 of the Cuba Democracy Act, according to the U.S.-Cuba Trade and Economic Council, a New York-based group that monitors the issue.

The Nethercutt compromise would allow food sales to the Cuban government corporation, Alimport, that handles shipments of food into the island nation.

But the bill would prohibit U.S. government financing, which would normally be available through the Agriculture Department. Moreover, U.S. banks and insurance companies would not be allowed to support sales to Cuba, cutting off the main avenue for U.S. exports to Cuba.

"In today's world, nobody trades without some sort of finance," Mr. Baucus said. "What is the alternative? Only to ride along with the cargo ship to exchange your wheat for cash in Havana harbor."

Other business groups agreed that the restrictions were not helpful, but said that the United States could still make sales to Cuba, principally by using financing arranged through other countries.

"The financing is definitely a problem, but it does not make sales impossible," said Barbara Spangler, executive director of the Wheat Export Trade Education Committee.

Mr. Nethercutt's original proposal included much more liberal provisions on financing, but he concluded during the House negotiations that a compromise was necessary to get the provision approved.

"We would like to go further, but that is all that the market would bear," an aide to Mr. Nethercutt said.

Provisions on travel to Cuba have also raised suspicions among business groups that the Nethercutt bill would make travel to the island more difficult. The provision appears to give the president less discretion to make changes to current restrictions on tourism in Cuba, though lawyers have offered differing interpretations of it.

"If there is not a consensus on what it means, most companies would rather not have it," said John Kavulich, president of the Cuba trade council.

Finally, business groups are opposed to a section of the Nethercutt bill authored by Rep. Benjamin A. Gilman, New York Republican, that prevents any changes to the U.S. embargo against Iran beyond what Secretary of State Madeleine K. Albright announced in March. Mr. Gilman backed the provision because of Iran's sponsorship of international terrorism.

Mrs. Albright, in a gesture aimed at Iranian moderates who had triumphed in parliamentary elections, allowed the importation of luxury items from Iran, principally dates, pistachio nuts and rugs.

Business groups said that this part of the bill would effectively codify into law the embargo directed at Iran, giving the president little leeway in promoting trade if relations improve.

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