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[Senate Hearing 107-1109]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 107-1109

                      U.S. TRADE POLICY WITH CUBA

=======================================================================

                                HEARING

                               before the

     SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE AND TOURISM

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 21, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
                                 ------                                

          SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE 
                              AND TOURISM

                BYRON L. DORGAN, North Dakota, Chairman
JOHN D. ROCKEFELLER IV, West         PETER G. FITZGERALD, Illinois
    Virginia                         CONRAD BURNS, Montana
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
BARBARA BOXER, California            GORDON SMITH, Oregon
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 21, 2002.....................................     1
Statement of Senator Allen.......................................    12
    Prepared statement...........................................    13
Statement of Senator Boxer.......................................     4
    Letter to President George W. Bush and Congress from 48 
      former U.S. senators, urging normalization of relations 
      with Cuba..................................................    41
Statement of Senator Carnahan....................................     3
Statement of Senator Dorgan......................................     1
Statement of Senator McCain......................................    11
    Prepared statement...........................................    11

                               Witnesses

Hays, Hon. Dennis K., Executive Vice President, Cuban American 
  National Foundation............................................    32
    Prepared statement...........................................    33
Reich, Hon. Otto J., Assistant Secretary of State for Western 
  Hemisphere Affairs, accompanied by Shaun E. Donnelly, Principal 
  Deputy Assistant Secretary of the Economic Bureau, Department 
  of State.......................................................     6
    Prepared statement...........................................     9
Weber, Stephen, President, Maryland Farm Bureau..................    36
    Prepared statement...........................................    38
Weinmann, Lissa, Executive Director, Americans for Humanitarian 
  Trade with Cuba................................................    42
    Prepared statement...........................................    45

                                Appendix

Levy, Delvis Fernandez, President, Cuban American Alliance 
  Education Fund, Inc., prepared statement.......................    55

 
                      U.S. TRADE POLICY WITH CUBA

                              ----------                              

                         TUESDAY, MAY 21, 2002

                               U.S. Senate,
Subcommittee on Consumer Affairs, Foreign Commerce 
                                       and Tourism,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:40 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Byron L. 
Dorgan, Chairman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. The hearing will come to order. We will be 
joined by a number of colleagues in a few moments. The Senate 
is just finishing a vote on the floor of the Senate.
    This is the Subcommittee on Consumer Affairs and Foreign 
Commerce with the Commerce Committee. We are holding a hearing 
today, and we will have as our guests testifying today Mr. Otto 
Reich, the Assistant Secretary of State for Western Hemisphere 
Affairs, Ambassador Shaun Donnelly, Principle Deputy Assistant 
Secretary, Bureau of Economics and Business Affairs. They'll be 
followed by a second panel: Ambassador Dennis Hays, executive 
vice president, Cuban American National Foundation, Mr. Stephen 
Weber, president, Maryland Farm Bureau, Ms. Lissa Weinmann, 
executive director, Americans for Humanitarian Trade with Cuba.
    We've called this hearing because the Congress, in recent 
years, has been debating the issue of trade and commerce with 
Cuba. And in the year of 2000, we enacted the Trade Sanctions 
Reform and Export Enhancement Act of 2000, which is a piece of 
legislation that will allow us to have Cuba purchase food from 
the United States. After a terrible hurricane caused $1.8 
billion in damage and devastated Cuba's crops last November, 
Cuba began to purchase food from U.S. farmers for the first 
time in nearly 40 years. As I indicated, that purchase was made 
available as a result of a change in law by the U.S. Congress 
in the year 2000.
    I and many of my colleagues fought very hard to change the 
law, believing that we ought not use food as a weapon, 
believing that it is immoral to use food as a weapon, and, with 
respect to Cuba and all other countries, that we ought to be 
able to sell food to those countries, and that prohibiting such 
a sale really doesn't do anything to hurt those that we are 
trying to hurt. It only hurts sick, hungry, and poor people 
around the world. And so the law was changed in 2000.
    As I understand it, the Cubans have now purchased something 
between $75 and $90 million worth of U.S. food. They are 
required, under current law, to purchase it with cash. They 
have to run it through a European bank. As I understand it, the 
Cubans are running it through a French bank in order to 
purchase U.S. food. I happen to believe we ought to change, as 
well, and we did it in the Senate, and it went to conference 
and was dumped out in conference. But we will change that very 
soon so that they can access banks in this country, as well.
    But having said all that, I called this hearing, because, 
in the context of purchasing U.S. food, Mr. Alvarez, who is the 
head of a group--an agency in Cuba, called Alimport, which 
purchases this food for Cuba, had applied for a visa to come to 
this country and visit some farm states at the invitation of 
farm organizations. The visa was granted and then subsequently 
revoked. And I, when I learned of that, tried to understand why 
it was revoked and was told by the State Department that, ``It 
is not the policy of our country to encourage food sales to 
Cuba.'' I find that inexplicable, because the Congress has 
already spoken to that issue. We believe that we ought to be 
able to sell food to Cuba. We've changed the law in order to 
allow that to happen.
    I wanted to find out why Mr. Alvarez and several other 
officials' visas were canceled. I asked Secretary Powell in 
several letters. I asked him at a hearing. He indicated at the 
hearing, when I inquired of him, that Mr. Alvarez, on a 
previous visit to the United States, had essentially made 
comments that undermined the circumstances of his visit. And I 
asked for the specifics of that and am led to believe that what 
Mr. Alvarez did when he came to the United States is suggest 
that they would like for the Cuba government and Cuban people 
to be able to buy more food from the United States. Now, I 
don't happen to think that undermines or threatens our 
circumstances in this country at all, but apparently some do.
    I want to try to understand whether the State Department 
and/or the Administration is thwarting the will of Congress 
with respect to food sales to Cuba. It is true we have sold a 
substantial amount of food to Cuba in recent months. It is also 
true, it appears to me, that some in the Administration want to 
make it increasingly more difficult to do so.
    I have a letter from the Cuban government describing what 
they have purchased from the United States recently. They have 
purchased milling wheat, corn, milled rice, chicken leg 
quarters, chicken livers, turkey drumsticks, soybean meal, pork 
lard, fresh eggs, apples, onions. The other requests that are 
now being considered are durum wheat, wheat flour, wheat 
pellets, rice, sorghum, oats, barley, alfalfa, canary seed, 
castor oil seed, and the list is quite endless, actually. It's 
roughly 240 items.
    We have a good many American farmers who need to find a 
foreign home for their product. We sell that product to China, 
a communist government. We sell it to Vietnam, a communist 
government. But we are told somehow that we ought not to 
encourage sales of food to Cuba. As I indicated, I don't think 
Fidel Castro has ever missed a meal because of our embargo. I 
don't believe he missed a meal in 40 years because we couldn't 
ship U.S. food to Cuba or they couldn't purchase food from the 
United States. But I think poor, sick, and hungry people in 
Cuba are the victims of these policies, and I personally 
believe that it is immoral to use food as a weapon.
    My hope is that, in this hearing, we can find some 
information about what is happening inside the State 
Department, whether they believe that what Congress has done in 
allowing the Cubans to purchase grain and food from this 
country is something that they should accommodate and should 
assist in when asked, and also perhaps inquire about whether 
there is a decisionmaking process that we don't quite 
understand, but need to. I believe it was the Secretary who 
indicated that the revocation of the visas of Pedro Alvarez to 
come to our country, including a trip to North Dakota to buy 
dried beans and wheat, among other things, was the subject of 
an interagency task force, so I'd like to understand a little 
more about that, as well as which agencies are part of the 
interagency task force.
    But we will hear from a number of witnesses today. We 
appreciate Secretary Reich and Ambassador Donnelly being with 
us. I have a couple of other comments, but let me call on my 
colleagues. And, Senator Carnahan, why don't you proceed with 
an opening statement?

               STATEMENT OF HON. JEAN CARNAHAN, 
                   U.S. SENATOR FROM MISSOURI

    Senator Carnahan. Thank you, Mr. Chairman. Our nation's 
trade policy with Cuba is extremely important to my state, and 
I appreciate your leadership on this topic. The Senate has 
worked hard over the past year to craft a farm bill, and this 
new law will help the farmers in my state and across the 
country for years to come.
    Missouri ranks second in the Nation in the number of farms. 
These farmers are desperate for more markets. Some are forming 
new generation cooperatives to market ethanol, others are 
finding niche markets for their commodities, but much, much 
more needs to be done, and our government is standing in the 
way of a vast new market for Missouri farmers.
    Some simple changes to our trade policy with Cuba would 
greatly expand economic opportunities for Missouri farmers. 
Since we resumed exporting food to Cuba last year, U.S. farmers 
have sold more than 500,000 tons of commodities valued at over 
$100 million, but U.S. law still prohibits private American 
banks and companies from financing the sale of agricultural 
goods to Cuba. This severely limits the amount of goods that 
Cuba can purchase.
    Permitting private U.S. firms to finance food sales to Cuba 
will help Missouri farmers. It would help many other aspects of 
our rural economy, as well. Rural schools, banks, food 
processing facilities and other entities that rely on or add 
value to our agricultural products will benefit.
    Mr. Chairman, I am pleased to be a cosponsor of your 
amendment to the trade bill that would allow private U.S. 
financing of food sales to Cuba. I was sorry that a similar 
provision was dropped from the farm bill during conference.
    I was also disappointed recently when the State Department 
refused to issue a visa to the head of the Cuban Food Import 
Agency. This official had been planning to come to your state, 
Mr. Chairman, and also to Missouri. The American Farm Bureau 
said that this action adversely affected U.S. sales of corn, 
rice, wheat, poultry, and soybeans, all of which are produced 
in my state. I'm troubled that the Administration would take 
this action, which is so clearly at odds with the interests of 
U.S. farmers.
    I appreciate you conducting this hearing today, which is 
drawing attention to this important issue, and I look forward 
to continuing to work with you and our colleagues from the 
other body, especially Congresswoman Joanne Emerson, of 
Missouri, in opening up this valuable foreign market for U.S. 
agricultural goods.
    Thank you.
    Senator Dorgan. Senator Carnahan, thank you very much. 
Next, I'll call on Senator Boxer for an opening statement.

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Thank you so much, Mr. Chairman. Thank you 
for your leadership on this important issue.
    I have some guests from California. The Chicano-Latino 
Caucus of the California Democratic Party is here, and they 
have in their group Cuban-Americans, so we are very happy 
they're here. They urge us to change this policy.
    They passed a resolution. It says, ``Whereas, the 
Constitution of the United States of America guarantees every 
American certain rights and freedoms; Whereas, the restrictions 
on American citizens to travel to Cuba is clearly a violation 
of said constitutional rights and freedoms, and; Whereas, the 
travel restrictions limit American citizens of Cuban descent 
the right to travel to Cuba only once per year, regardless of 
emergencies or unforeseen necessity; Therefore, be it resolved 
that the California Democratic Party request the U.S. Congress 
lift the Cuba travel restrictions currently imposed on all 
United States citizens.'' And they sent this to Members of 
Congress.
    I'm just very glad that they're here and excited to see 
them. They've traveled all the way here from California.
    Senator Dorgan, again, I want to thank you. You have been 
clear on this issue. You say we shouldn't use food as a weapon. 
I couldn't agree with you more. We shouldn't withhold food from 
people. You make that clear.
    And you also make clear that we have a golden opportunity 
here for our agricultural producers. And I just came back from 
Cuba just a week before President Carter went, and I met with 
the various ministers there and Ag people and presented--in 
this box is just a whole host of products, different types of 
beans and rice and--we showed them a little cotton, and we 
showed them our milk, our--this is a low-fat milkman instant 
low-fat dry milk. I'll tell you, it was, in a way, a little sad 
to see the reaction. They gathered around this box, Mr. 
Chairman, as if it was filled with gold. I swear. And they are 
so anxious to buy our food.
    Now, I understand when you say to people like Ambassador 
Reich, ``Well, why can't we lift the travel ban?'' One reason 
is, ``Castro will get the money. He will keep all the money.'' 
I mean, I'm not going to get in an argument about that. Castro 
can't eat all the food. OK? He talks too long at dinner.
    [Laughter.]
    Senator Boxer. Trust me. The dinner started at 8:30 and 
ended at 3:30, and, unlike I usually am, I didn't say much. So, 
yeah, he's not going to eat all the food. And they gathered 
around this as if it was gold. They want to buy our food. It's 
so hard for them--we're making it so hard for them to get food 
for their people. What is the point of that?
    And this trip had really very interesting people, 
musicians, we had the leader and the spokesmen from our poultry 
industry there, a Republican. We all came to the same 
conclusion at the end, and that was--it could be well expressed 
this way, ``What are we doing? How does this policy of a travel 
ban embargo make any sense whatsoever in this day and age?''
    Now, maybe it could be explained during the cold war. Sure 
it could have, when Castro was all over in helping communism 
spread throughout the world. It's a new day. Communism's dead. 
It's even dead in Cuba. I hate to say it. It's dead. Castro may 
think he has communism, but he's got a whole dollar economy 
going, and I went to the restaurants, and there's all kinds of 
capitalism over there. So he may think he's leading a communist 
country. Let me tell you, the people don't. The real people 
there don't. And they love Americans, and they want to talk to 
us.
    And the irony is members of my group went over to Cubans, 
and the police were all over them. The police there don't want 
the Americans talking to the Cubans. There's human-rights 
violations going on. And they finally figured out how to get 
away from the police, and they talked to the Cubans, and 
they're spreading the word about our country, about our system. 
What is this Administration fearful of, our own people going 
over there and talking about how wonderful freedom is and 
democracy is, that our Ag people send over our products and we 
win over the hearts and minds of the people?
    You know, here's the deal, and then I'll conclude. It's one 
thing to say, ``You know, we have a policy that might work,'' 
and try it for a period of time. We've done that. We've been 
there. It doesn't work. It hasn't done anything to hurt Castro. 
It hasn't done anything to better human rights.
    Finally, and this is the point I want to make to you, Mr. 
Reich, the dissidents want the travel ban over. The people you 
claim to be helping with your policy want the travel ban over. 
They want the embargo lifted. These are people who Castro put 
in jail. These are people who have suffered because they're 
courageous and they speak out. There are people who are 
collecting signatures for the petition and the referendums that 
they want to put on the ballot. So what are we doing having a 
policy that the dissidents disagree with? Who are we 
representing, anyway, if not the dissidents in Cuba who want an 
end to dictatorship?
    So I hope, with your leadership, Mr. Chairman, we can bring 
about some change. I know the Congress wants to. It's a 
question of whether the Administration wants to. So far it 
doesn't look too good for our position. But we just keep 
shining the light of day on this policy. This policy cannot 
stand the scrutiny. People have a relative--a sick relative--I 
have a Cuban-American in here, in the room, that can only go 
see him every few months. It's a nightmare. We have to change 
the policy.
    Thank you.
    Senator Dorgan. Senator Boxer, thank you.
    Let me, before I call on Secretary Reich, say that there is 
no disagreement on Capitol Hill with respect to Fidel Castro. 
All of us want to bring democracy and greater human rights to 
Cuba. It is my feeling that the argument that's been made so 
persuasively that engagement is what causes progress--
engagement with China, engagement with Vietnam--it seems to me 
that argument is persuasive also with respect to Cuba.
    Ninety miles south of Florida, there is a nearly $1 billion 
market for agricultural goods. We, in Congress, fought to allow 
circumstances by which the embargo would be lifted with respect 
to the sale of agricultural goods. That has happened, and 
that's good for American family farmers, it's good for people 
in Cuba who need that food.
    I would just say that at a Cuban hospital, at one point, I 
sat near the bedside of a young boy that was in a coma. He was 
hooked to no machines, because they had no machines. The people 
who ran that hospital told me they were out of 240 different 
kinds of medicine in that hospital. And the point is, with 
respect to the use of food and medicine, this country is not 
representing the best of itself by trying to withhold those 
kinds of things from people around the world who need them.
    The simple question for today's hearing is this. Congress 
has spoken on the question of whether we want to allow the sale 
of food to Cuba. The answer is yes. That's now a matter of law. 
Is the State Department and/or the Administration attempting to 
thwart that by making it difficult for future sales to take 
place?
    And with that as an operating questions, Ambassador Reich, 
why don't you proceed, and then we will hear from Ambassador 
Donnelly.

 STATEMENT OF HON. OTTO J. REICH, ASSISTANT SECRETARY OF STATE 
                FOR WESTERN HEMISPHERE AFFAIRS, 
          ACCOMPANIED BY SHAUN E. DONNELLY, PRINCIPAL 
          DEPUTY ASSISTANT SECRETARY OF THE ECONOMIC 
                  BUREAU, DEPARTMENT OF STATE

    Ambassador Reich. Thank you, Mr. Chairman, Senator Boxer, 
and Members of the Committee. It's an honor for me to testify 
today before this Committee of the U.S. Senate regarding the 
Bush Administration's trade policy toward Cuba. I want to thank 
the Chairman for giving me this opportunity to testify.
    President Bush, yesterday, announced his initiative for a 
new Cuba. The initiative calls on the Cuban government to 
undertake political and economic reforms and to conduct free 
and fair elections next year for the National Assembly. The 
initiative challenges the Cuban government to open its economy, 
allow independent trade unions, and end discriminatory 
practices against Cuban workers. If the Cuban government takes 
these concrete steps to open up its political and economic 
system, President Bush will work with the Congress to ease the 
ban on trade and travel between the United States and Cuba.
    With reform, trade can benefit the Cuban people and allow 
them to share in the progress of our time. Without major 
reform, unrestricted trade with Cuba only helps the Castro 
regime, not the Cuban people. The initiative for a new Cuba 
also reaches out to the Cuban people immediately by 
facilitating meaningful humanitarian assistance by American 
religious and other non-governmental groups by providing direct 
assistance to the Cuban people through non-governmental 
organizations, by seeking the resumption of direct-mail service 
to and from Cuba, and by establishing scholarship funds in the 
United States for Cuban students and professionals trying to 
build independent civil institutions and for family members of 
political prisoners.
    The initiative for a new Cuba also states that the United 
States is not a threat to Cuban sovereignty. The initiative is 
not the end of the President's policy review, but the beginning 
of an ongoing, flexible, and responsive campaign designed to 
generate rapid and peaceful change within Cuba. The initiative 
is important, because Cuba continues to be ruled by a dictator. 
The regime has failed to meet the basic needs of the Cuban 
people and continues to deny them the freedoms of speech and 
assembly as well as the ability to choose their leaders.
    The Committee to Protect Journalists continues to list Cuba 
as one of the ten worst enemies of the press worldwide, 
characterizing its actions as a scorched-earth assault in 
independent journalists. Cuba is the exception to our 
hemispheric family of democratic nations. It is essential that 
democratic development, especially through the formation of 
independent civil society organizations, political parties, and 
free elections, begin rapidly in order to maximize the 
prospects for a smooth transition to democracy.
    The regime has shown little interest in reforming itself or 
moving toward a more open or representative government. For 
this reason, the Administration opposes steps which would have 
the effect of strengthening the Cuban regime, but the 
initiative encourages the Cuban government to begin addressing 
the concerns we share with other nations of the hemisphere.
    Central to our policy is the reality of the government of 
Cuba, which has continued to be hostile to the United States. 
Cuba remains on the list of state sponsors of terrorism, in 
part because Cuba harbors fugitives from U.S. justice. 
Furthermore, the Cuban regime continues to violate human rights 
and fundamental freedoms. This was amply illustrated by the 
jailing of Vladimiro Roca in the most repressive of conditions 
for over 1,700 days simply because he had the courage to call 
for a national dialog. In fact, the U.N. Commission on Human 
Rights recently approved a resolution calling on Cuba to make 
progress in respecting human, civil, and political rights.
    As Secretary Powell has noted, a number of events since 
August 2001 also have contributed to a reevaluation of our 
policy toward Cuba. First, in the wake of the tragic events of 
September 11, Cuba's reaction was hostile to U.S. efforts to 
respond to terrorism. This was clear from Cuban government 
statements that the war in Afghanistan is, quote, ``fascistic 
and militaristic,'' unquote, and the Cuban government 
minister's remarks--foreign minister's remarks at the U.N. 
General Assembly, when he accused the United States of 
intentionally targeting Afghan children for death and Red Cross 
hospitals in Afghanistan for destruction. Also in September, 
five agents of the Cuban government were sentenced for 
conspiring to spy against the United States, including efforts 
to penetrate U.S. military bases. One of these five also was 
convicted and sentenced for conspiracy to commit murder.
    Further, on September 21, 2001, Ana Belen Montes, a senior 
analyst in the Defense Intelligence Agency, was arrested for 
spying for Cuba against the United States. She subsequently 
entered a guilty plea in March of this year. Spying, Cuba's 
harboring fugitives from U.S. justice, and its continued 
violation of human rights and fundamental freedoms combine to 
demonstrate that Cuba continues to carry out its aggressive 
policies against the United States and its people.
    Moreover, we know that Cuba has a sophisticated 
biotechnology infrastructure capable of supporting a biological 
weapons program and has transferred dual-use technology to a 
number of countries around the world, including those with 
known or suspected biological weapons programs. These facts 
underpin our assessment that Cuba has at least a limited 
developmental biological-weapons research-and-development 
effort. These incidents clearly reaffirm Cuba's hostility to 
the United States and the threat it represents to our national 
security. As a result, Administration policy considers visits 
by senior Cuban officials at this time to be inappropriate and 
detrimental to the national interest.
    That said, the Administration is open to transforming the 
relationship. The President's initiative offers a serious 
alternative, one which we urge the government of Cuba to weigh 
carefully. Presently, sales of medicine and agricultural 
commodities to Cuba are, while subject to certain restrictions, 
legal. Sales of medicine have been legal since the passage of 
the Cuban Democracy Act of 1992. The government of Cuba, 
however, has been reluctant to purchase medicine and medical 
equipment from the United States, at least in part because it 
finds prices to be too high.
    In 1999, President Clinton authorized licensing by 
Commerce's Bureau of Export Administration, recently renamed 
the Bureau of Industry and Security, of sales and food and 
agricultural inputs to independent entities in Cuba, including 
religious groups, private farmers, and private-sector 
undertakings such as family restaurants. This measure did not 
result in significant sales, because the Cuban government 
opposed it.
    The Trade Sanctions Reform and Export Enhancement Act of 
2000, TSRA, permitted the Cuban government to purchase, on a 
cash basis or with financing by third-country financial 
institutions, agricultural commodities from the United States. 
Through late 2001, Castro refused to buy, and I quote, ``even a 
grain of rice,'' unquote, from the United States, and perhaps 
with good reason.
    Cuba is one of the most heavily indebted countries in the 
world, with an external debt burden of about $3,000 per capita, 
including ruble debt. As a result of its economic performance, 
Moody's rates Cuba in its lowest category. Cuba is so bad off 
that its merchant marine leaves behind a, quote, ``trail of 
unpaid creditors at every port they visit,'' unquote, according 
to an Amsterdam newspaper that also recently observed, quote, 
``Cuba is practically bankrupt,'' unquote. No wonder Castro 
executed a 180-degree policy turn after Hurricane Michelle last 
November.
    Despite the Castro regime's implacable hostility, the 
Administration has carried out and will continue to carry out 
its responsibilities under TSRA. Since Cuba decided to make 
food purchases from the United States, Cuba has made more than 
$40 million in sales with another $50 million reported to be in 
progress. Overall, the Administration has licensed more than 
$1.2 billion worth of agricultural commodities for Cuba since 
implementation of TSRA in July 2001.
    These purchases demonstrate the Cuban regime's strong 
motivation to complete these sales, particularly taking into 
account that the Cuban government has chosen to use its very 
limited foreign-exchange reserves in these transactions. This 
is one reason for the Administration's policy judgment that 
marketing visits by Cuban tradeofficials are not necessary to 
conclude purchases of U.S. agricultural commodities. 
Applications for visas by Cuban officials are considered on a 
case-by-case basis at the time of application in accordance 
with existing law and in light of current policy 
considerations. The Department of State recognizes that visits 
to agricultural production facilities to address certain 
sanitary and phytosanitary issues may be needed so that sales 
can be completed. Visas have been issued to such personnel in 
the past, and such visa applications as are received by the 
U.S. Interests Section will be carefully considered. In 
addition, representatives of American firms who wish to arrange 
legally permitted trade can request specific licenses from the 
Department of Treasury that allow travel-related transactions 
for a visit to Cuba.
    In conclusion, Mr. Chairman, as the President said 
yesterday quoting Jose Marti, quote, ``Barriers of ideas are 
stronger than barricades of stone,'' unquote. For the benefit 
of Cuba's people, it is time for Mr. Castro to cast aside old 
and failed ideas and to start to think differently about the 
future. Today could mark a new dawn in the long friendship 
between our peoples, but only if the Castro regime sees the 
light.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Reich follows:]

 Prepared Statement of Otto J. Reich, Assistant Secretary of State for 
Western Hemisphere Affairs accompanied by Shaun E. Donnelly, Principal 
 Deputy Assistant Secretary of the Economic Bureau, Department of State
    Mr. Chairman, Members of the Committee, it is an honor for me to 
testify today before this Committee of the United States Senate 
regarding the Bush Administration's trade policy toward Cuba. I want to 
thank the Chairman for giving me this opportunity to testify before 
this Committee.
    President Bush yesterday announced his Initiative for a New Cuba. 
The Initiative calls on the Cuban government to undertake political and 
economic reforms, and to conduct free and fair elections next year for 
the National Assembly. The Initiative challenges the Cuban government 
to open its economy, allow independent trade unions, and end 
discriminatory practices against Cuban workers. If the Cuban Government 
takes these concrete steps to open up its political and economic 
system, President Bush will work with the Congress to ease the ban on 
trade and travel between the United States and Cuba.
    With reform, trade can benefit the Cuban people and allow them to 
share in the progress of our time. Without major reform, unrestricted 
trade with Cuba only helps the Castro regime, not the Cuban people.
    The Initiative for a New Cuba also reaches out to the Cuban people 
immediately by facilitating meaningful humanitarian assistance to the 
Cuban people by American religious and other nongovernmental groups; by 
providing direct assistance to the Cuban people through non-
governmental organizations; by seeking the resumption of direct mail 
service to and from Cuba; and by establishing scholarships in the 
United States for Cuban students and professionals trying to build 
independent civil institutions and for family members of political 
prisoners.
    The Initiative for a New Cuba also states that the United States is 
not a threat to Cuban sovereignty.
    The Initiative for a New Cuba is not the end of the President's 
policy review, but the beginning of an ongoing, flexible and responsive 
campaign designed to generate rapid and peaceful change within Cuba.
    The Initiative is important because Cuba continues to be ruled by a 
dictator. The regime has failed to meet the basic needs of the Cuban 
people and it continues to deny them the freedoms of speech and 
assembly as well as the ability to choose their leaders. The Committee 
to Protect Journalists continues to list Cuba as one of the 10 worst 
enemies of the press worldwide characterizing its actions as a 
``scorched earth assault'' on independent journalists.
    Cuba is the exception to our hemispheric family of democratic 
nations. It is essential that democratic development, especially 
through the formation of independent civil society organizations, 
political parties, and free elections, begin rapidly in order to 
maximize the prospects for a smooth transition to democracy. The regime 
has shown little interest in reforming itself, or moving toward a more 
open or representative government. For this reason, the Administration 
opposes steps which would have the effect of strengthening the Cuban 
regime. But the Initiative encourages the Cuban government to begin 
addressing the concerns we share with other nations of the hemisphere.
    Central to our policy, is the reality of the Government of Cuba, 
which has continued to be hostile to the United States. Cuba remains on 
the list of state-sponsors of terrorism, in part because Cuba harbors 
fugitives from U.S. justice. Furthermore, the Cuban regime continues to 
violate human rights and fundamental freedoms. This was amply 
illustrated by the jailing of Vladimiro Roca, in the most oppressive of 
conditions, for over 1,700 days simply because he had the courage to 
call for a national dialogue. In fact, the U.N. Commission on Human 
Rights recently approved a resolution calling on Cuba to make progress 
in respecting human, civil and political rights.
    As the Secretary has noted, a number of events since August 2001 
also have contributed to a reevaluation of our policy toward Cuba. 
First, in the wake of the tragic events of September 11, Cuba's 
reaction was hostile to U.S. efforts to respond to terrorism. This was 
clear from Cuban government statements that the war in Afghanistan is 
``fascistic and militaristic'' and the Cuban Foreign Minister's remarks 
at the UN General Assembly, when he accused the United States of 
intentionally targeting Afghan children for death and Red Cross 
hospitals in Afghanistan for destruction. Also in September, five 
agents of the Cuban government were sentenced for conspiring to spy 
against the United States, including efforts to penetrate U.S. military 
bases. One of these five also was convicted and sentenced for 
conspiracy to commit murder. Further, on September 21, 2001, Ana Belen 
Montes, a senior analyst in the Defense Intelligence Agency, was 
arrested for spying for Cuba against the United States. She 
subsequently entered a guilty plea in March 2002.
    Spying, Cuba's harboring of fugitives from U.S. justice, and its 
continued violation of human rights and fundamental freedoms, combine 
to demonstrate that Cuba continues to carry out its aggressive policies 
against the United States and its own people. Moreover, we know that 
Cuba has a sophisticated biotechnology infrastructure capable of 
supporting a biological weapons program and has transferred dual-use 
technology to a number of countries around the world, including those 
with known or suspected biological weapons programs. These facts 
underpin our assessment that Cuba has at least a limited, developmental 
biological weapons research and development effort.
    These incidents clearly reaffirm Cuba's hostility to the United 
States and the threat it represents to our national security. As a 
result, Administration policy considers visits by senior Cuban 
officials, at this time, to be inappropriate and detrimental to the 
national interest.
    That said, the Administration is open to transforming the 
relationship. The President's initiative offers a serious alternative, 
one which we urge the Government of Cuba to weigh carefully.
    Presently, sales of medicine and agricultural commodities to Cuba 
are, while subject to certain restrictions, legal. Sales of medicine 
have been legal since passage of the Cuban Democracy Act of 1992 (CDA); 
the Government of Cuba, however, has been reluctant to purchase 
medicine and medical equipment from the United States at least in part 
because it finds prices to be too high. In 1999, President Clinton 
authorized the licensing by Commerce's Bureau of Export Administration 
of sales of food and agricultural inputs to independent entities in 
Cuba, including religious groups, private farmers and private sector 
undertakings such as family restaurants. This measure did not result in 
significant sales because the Cuban government opposed it.
    The Trade Sanctions Reform and Export Enhancement Act of 2000 
(TSRA) permitted the Cuban government to purchase, on a cash basis or 
with financing by third-country financial institutions, agricultural 
commodities from the United States. Through late 2001, Castro refused 
to buy ``even a grain of rice'' from the United States. He executed a 
180 degree policy turn, however, after Hurricane Michelle last 
November.
    Despite the Castro regime's implacable hostility, the 
Administration has carried out and will continue to carry out its 
responsibilities under TSRA. Since Cuba decided to make food purchases 
from the United States, Cuba has made more than $40 million in sales, 
with another $50 million reported to be in progress. Overall the 
Administration has licensed more than $1.2 billion worth of 
agricultural commodities for Cuba since implementation of TSRA in July 
2001. These purchases demonstrate the Cuban regime's strong motivation 
to complete these sales, particularly taking into account that the 
Cuban government has chosen to use its very limited foreign exchange 
reserves in these transactions. This is one reason for the 
Administration's policy judgment that marketing visits by Cuban trade 
officials are not necessary to conclude purchases of U.S. agricultural 
commodities.
    Applications for visas by Cuban officials are considered on a case-
by-case basis at the time of application in accordance with existing 
law and in light of current policy considerations. The Department of 
State recognizes that visits to agricultural production facilities to 
address certain sanitary and phytosanitary issues may be needed so that 
sales can be completed. Visas have been issued to such personnel in the 
past and such visa applications as are received by the U.S. Interests 
Section will be carefully considered. In addition, representatives of 
American firms who wish to arrange legally permitted trade can request 
specific licenses from the Department of Treasury that allow travel-
related transactions for visits to Cuba.
    In conclusion, as the President said yesterday, quoting Jose Marti, 
``Barriers of ideas are stronger than barricades of stone.'' For the 
benefit of Cuba's people, it is time for Mr. Castro to cast aside old 
and failed ideas and to start to think differently about the future. 
Today could mark a new dawn in a long friendship between our people, 
but only if the Castro regime sees the light.''
    Thank you Mr. Chairman.

    Senator Dorgan. Secretary Reich, thank you very much.
    Ambassador Donnelly?
    Ambassador Donnelly. Thank you, Mr. Chairman. I do not have 
an opening statement. I'm here simply to assist Assistant 
Secretary Reich in responding to your questions.
    Thank you.
    Senator Dorgan. Ambassador Donnelly, thank you very much.
    Let me begin. First, let me ask if the Ranking Member of 
the full Committee has a statement. Senator McCain has joined 
us.

                STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    Senator McCain. I'll make it part of the record. Thank you, 
Mr. Chairman.
    Senator Dorgan. All right, without objection.
    [The prepared statement of Senator McCain follows:]

   Prepared Statement of Hon. John McCain, U.S. Senator from Arizona
    Thank you, Senator Dorgan. I would like to commend you for ensuring 
our Committee's continued dialogue on this important topic. While we 
may not always agree on trade-related issues, I believe the Committee 
greatly benefits from these discussions. I would also like to thank all 
of our witnesses for appearing before us today.
    The timing of this hearing provides a useful opportunity to examine 
the American trade embargo and the case the President has made and 
reinforced just yesterday for sustaining the embargo as a way to bring 
freedom to the Cuban people.
    Although I am an ardent proponent of free trade, I have long 
supported maintaining our trade embargo against Cuba until Fidel Castro 
grants his people their basic rights. As long as the Cuban government 
controls nearly all economic activity in Cuba, free trade cannot be the 
liberalizing force it has been elsewhere.
    Unlike China where trade has brought freedoms to its people, trade 
with Cuba provides the government with a means of maintaining a unique 
system of control over its people. The Cuban state remains deeply 
repressive and pervasive in its attempts to control Cuban society. The 
Cuban government owns nearly all the means of production and siphons 
off significant revenues from the few businesses it does not own. 
Greater revenues generated in Cuba from trade would only bolster the 
state security apparatus. Rather than creating the political and 
economic space that would encourage greater freedom in Cuba, trade with 
this state-owned economy would only further empower that government.
    As we will hear today, Cuba is also a notoriously bad debtor. 
Expanded trade and private financing would clearly put American 
companies and taxpayers at an unnecessary financial risk. Again, the 
revenues generated by expanded trade with the U.S. would flow 
principally to the Cuban government, not its people.
    This is not a new debate. While I believe that as a world leader we 
must be globally engaged and commit ourselves to the expansion of free 
trade, in this case I believe that the risks associated with expanded 
trade far outweigh the benefits. I understand that this is a divisive 
issue, and I support the President's position, which stands against 
oppression and with the Cuban people. I hope that as a result of this 
hearing, we will all come away with a better understanding of the 
greater issues involved.

    Senator Dorgan. Senator Allen?

                STATEMENT OF HON. GEORGE ALLEN, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Allen. I would like to make my statement part of 
the record, although I'd like to have some prefacing remarks, 
in that I think President Bush's statement and outline for 
freedom and independence for the individuals and people in Cuba 
yesterday was a very strong, principled statement.
    The decision as to whether or not to change their policies 
and allow freedom of expression, the right of the people of 
Cuba to alter, amend, or abolish their government to make it 
one which respects their property, their rights and their 
freedoms is really up to Mr. Castro. The President wisely asked 
for elections within a year, which I think is a wise move on 
his part. And, indeed, none of us wants to keep this embargo 
going, but it's up to the people--or, in fact, up to Fidel 
Castro as to whether or not they're going to take the steps of 
reform to allow greater trade and greater opportunities.
    And while there will be many people who will say this 
embargo somehow has impeded Cuba's ability to progress, the 
reality is it's the dictatorial, tyrannical government in Cuba 
that is impinging on their opportunities for investment in 
jobs, because, after all, it is only this country, the United 
States, that has this sort of an embargo--I'm talking embargo 
in accepting the food and the medicine. All the European 
countries, all the other countries in Latin America, the 
Canadians all have trade with Cuba, but, nevertheless, they're 
still impoverished. And the President rightly pointed out, in 
my view, the reason for that is not because of the United 
States, really not even because of our embargo, it is because 
of the rule of Fidel Castro.
    And I don't think we should be doing anything to prop up 
that dictatorship. I think we ought to be pushing as hard as we 
can for effective, strong ways to allow the people of Cuba to 
enjoy the fresh breeze and sweet nectar of freedom rather than 
doing anything to facilitate the continuation of the Castro 
regime.
    So I'll be asking questions, and I'd like to submit a 
statement for the record, as well.
    Senator Dorgan. Senator Allen, thank you. Without 
objection, your statement will be made part of the record.
    [The prepared statement of Senator Allen follows:]

     Prepared Statement of George Allen, U.S. Senator from Virginia

    Mr. Chairman, thank you for holding this timely hearing to evaluate 
the existing U.S. trade policy regarding Cuba. Trade is an important 
tool in our arsenal of weapons to achieve our larger goal: How to free 
the Cuban people from the tyranny of Castro.
    All of us want to help the Cuban people and we all want to 
encourage the sale of U.S. products, whether it is wheat from North 
Dakota or peanuts and poultry from the Commonwealth of Virginia, to 
Cuba.
    Regrettably, Mr. Chairman, I believe your proposal to permit the 
financing of Cuban purchases of U.S. products does neither.
    I was fortunate to be at the White House yesterday as President 
Bush called for the lifting of our trade embargo once the existing 
tyrannical government on Cuba is replaced by a government that is fully 
democratic.
    If the past is any indication of what will happen if we finance 
Cuban purchases of U.S. food and medicine, then those products will go 
first to tourist facilities where Cubans are not permitted (facilities 
surrounded by signs that say Solamante turistas--tourists only), to 
Castro's security forces, to the Communist Party members and to 
government dollar stores at inflated prices.
    But you don't have to take my word for that Mr. Chairman, this is 
what has been reported by Pax Christi Netherlands, a Catholic human 
rights organization and by the Humanitarian Aid Office of the European 
Union. In fact, Castro has yet to allow the shipment of tons of food 
that the Catholic Churches in Miami have made available.
    Nor will U.S. agricultural interests and other U.S. producers be 
benefited by permitting the financing of sales to Cuba. Castro buying 
and paying are not the same thing.
    One of the best-kept secrets of our 40-year-old trade embargo with 
Cuba is that it has saved millions of dollars for U.S. taxpayers. Due 
to the embargo, there are no U.S. banks in the ``Paris Club'', a 
consortium of Cuba creditors. (The Paris Club is currently owed between 
$10 and $15 billion in debt from Cuba.) Otherwise, U.S. banks now would 
be hitting U.S. taxpayers to cover their losses in Cuba.
    If the U.S. begins to subsidize trade with Cuba--estimated at $100 
million a year--five years from now, U.S. taxpayers could be holding, 
or paying of, a $500 million tab.
    Yesterday President Bush outlined a thoughtful U.S. trade policy 
with Castro. Meaningful reform on Castro's part will be answered with 
meaningful changes in our trade policy with Cuba.
    The key to increased trade with Cuba lies in the hands of Castro. 
All he has to do is:

   Allow opposition parties to speak freely and organize;

   Allow independent trade unions;

   Free all political prisoners, including Francisco Chaviano, 
        who was arrested and detained in prison for one year, and 
        although a civilian, he was tried by a military tribunal and 
        sentenced to 15 years in prison. He was arrested after 
        government agents broke into his home and confiscated documents 
        revealing human rights abuses in Cuba--specifically, 
        information about the Castro government's sinking of a tug boat 
        that claimed the lives of 41 men, women and children who were 
        attempting to escape to freedom.

   Allow human rights organizations to visit Cuba to ensure 
        that the conditions for free election are being created;

   Allow outside observers to monitor the 2003 elections, and

   End discriminatory practices against Cuban workers.

    Mr. Chairman, I hope this hearing will help free the Cuban people 
from the tyranny of Castro and bring freedom and democracy to the only 
country in the Western Hemisphere that is not free.
    Quiero ver una cuba libre.
    Thank you Mr. Chairman.

    Senator Dorgan. Ambassador Reich, let me ask whether the 
Department's policy with respect to food sales is, quote, ``not 
to encourage the sales of food to Cuba.'' That has been 
reported--I asked Secretary Powell that same question. As you 
know, in the year 2000, Congress made a judgment about whether 
or not we would be able to sell food to Cuba or Cuba would be 
able to buy food from us. The Congress made the judgment that 
we wanted that to happen. Is it, in your judgment, the State 
Department's policy, quote, ``not to encourage,'' unquote, 
sales of food to Cuba?
    Ambassador Reich. Sir, the department doesn't discourage 
sales of food to Cuba any more than it encourages sales of food 
to Cuba. The law says that sales of food to Cuba are allowed, 
and we enforce the law.
    Senator Dorgan. But the State Department said--I have a 
press clipping somewhere where the State Department said it's 
not--``It's our policy not to encourage food sales to Cuba.'' 
That's an important distinction.
    Ambassador Reich. Or--right, or discourage. Obviously, the 
sales are going on.
    Senator Dorgan. Well, let me ask about that a bit. As you 
know, because of the way the law was written--and we're 
attempting to change that--the Cubans are purchasing American 
food through a French bank--paying cash through a French bank. 
And I indicated to you one of the reasons for this hearing is 
Mr. Alvarez, representing Alimport, wanted to come to this 
country and was going to visit a number of states, including my 
state, and purchase some additional wheat, dried beans, and so 
on, and his visa was approved and then rejected. Would you 
describe for us the process by which his and other visas were 
approved and then rejected? Was that simply a mistake?
    Ambassador Reich. As Secretary Powell stated, sir, the 
interagency process had decided to not waive the 1984 law upon 
which these visas are approved. And so Mr. Alvarez would not 
have received a visa. Due to a miscommunication between the 
State Department and the U.S. Interests Section in Havana, some 
visas were issued to Cuban officials. And once the Interests 
Section of Havana received the directive or the notification 
that the visas were not going to be approved, they simply 
retracted them.
    Senator Dorgan. I'm going to come to--let me go back to--
because I just received the Dallas Morning News, April 3rd, 
2002, ``A State Department official said Tuesday that the 
denials comply strictly with the law and meet a Bush 
Administration policy of discouraging trade with Cuba.'' 
Inaccurate or accurate?
    Ambassador Reich. I don't know who that official is, sir.
    Senator Dorgan. Well, I'm not asking about who the official 
was. I'm asking whether what is in the Dallas Morning News is 
accurate. It says, ``a Bush Administration's policy goal of 
discouraging trade with Cuba.'' Is that accurate?
    Ambassador Reich. Sir, I can only tell what the State 
Department's position is, not what the Dallas Morning News 
position is. I do not agree with that characterization of our 
policy.
    Senator Dorgan. All right. Now, coming back to the issue of 
the visas, tell me how it came to your attention that the visas 
had been approved by the Interests Section of Havana.
    Ambassador Reich. We have a regular meeting to discuss visa 
applications from Cuba that consist of a number of officials 
from different agencies. And at one of those, this, as well as 
a number of other applications----
    Senator Dorgan. Is that the interagency process?
    Ambassador Reich. Yes.
    Senator Dorgan. Uh-huh, and----
    Ambassador Reich. And some visas are approved, some visas 
are disapproved. I'd say since I've been here--I don't know the 
exact percentage, but I'd guess about 50-50--about 50 percent 
are approved, 50 percent are disapproved. But don't hold me to 
the exact percentage. I'm speaking----
    Senator Dorgan. Would visas routinely come to that 
interagency process? Is that what the process is for?
    Ambassador Reich. No, the visas don't. The visas are--a 
visa request is received at the embassy--the U.S. Interests 
Section in Havana, and the State Department, because of the 
special case of Cuba, reviews them through an interagency 
process in Washington and then gives the Interests Section in 
Havana the direction.
    Senator Dorgan. And you discovered visas had been approved, 
and so then you indicated that these visas should be rejected.
    Ambassador Reich. Actually, I was informed that the visas 
had been approved, but that they should have been denied.
    Senator Dorgan. I see. And tell me, now, if you can, Mr. 
Alvarez was coming to this country to--on a trip to talk to 
some sellers and to potentially buy some additional food. The 
history in recent months has been they have purchased a fair 
amount of food from American farmers--eggs, wheat, corn, and a 
range of things--so they intended to come up and purchase some 
additional food. Tell me that basis on which you believe that 
somehow undermines our interests.
    Ambassador Reich. Well, sir, what I said is that we do not 
believe that Mr. Alvarez's presence in the United States is 
required for the purchase of that food. And the very fact that 
three different members mentioned three different amounts of 
food already sold to Cuba--anywhere from 50 million to 100 
million, and I mentioned 40 million with another 50 million 
already allegedly in the works--I think clearly indicates that 
the process seems to be working without the physical presence 
of Mr. Alvarez being required.
    Senator Dorgan. But you understand that it's rather common 
for trade missions to come up and talk to--come to this 
country, or from our country moved to other countries, to talk 
to sellers about the products they're interested in purchasing 
and the availability of those products. You understand that's 
routine with respect to international trade, do you not?
    Ambassador Reich. It's routine when it comes to countries 
with which we have normal relations. We do not have normal 
relations with Cuba, as I pointed out, because of their ongoing 
hostility and continued undermining of U.S. interests.
    Senator Dorgan. Except that the Congress--do you think that 
these cell phone bells are getting louder and louder?
    [Laughter.]
    Ambassador Reich. I think they're obnoxious. But that's 
just my opinion. That's not the State Department's opinion.
    [Laughter.]
    Senator Dorgan. We've found an area of agreement, Mr. 
Secretary.
    [Laughter.]
    Senator Dorgan. Let me--I understand your point. You've 
simply said, all right, the Congress has said we can sell food 
to Cuba----
    Ambassador Reich. Right.
    Senator Dorgan.--but we have no interest in having the 
Cuban buyer come in and talk to sellers. That seems to suggest 
what the State Department admitted in this statement, that 
you're discouraging trade with Cuba. Am I wrong about that?
    Ambassador Reich. Sir, that's the Dallas Morning News. The 
Secretary is--I get my directions from the Secretary of State, 
not from the Dallas Morning News or anybody else. The Secretary 
said clearly, we do not encourage, we do not discourage--or at 
least that's what I have been informed--and we don't. The sales 
are going forward in spite of what--you know, what reports you 
may be hearing, and you, yourself, have said that the sales 
continue.
    Senator Dorgan. Can you tell me also----
    Ambassador Reich. We encourage sales of food and all of the 
products all over the world.
    Senator Dorgan. Including Cuba.
    Ambassador Reich. We encourage sales all over the world. 
The case of Cuba, as I said earlier, is----
    Senator Dorgan. Is different.
    Ambassador Reich.--is different, that's right. And only----
    Senator Dorgan. That's what I'm trying to get to.
    Ambassador Reich. It is different----
    Senator Dorgan. Thank you.
    Ambassador Reich.--for one thing, as you said, because only 
recently did the Congress authorize the sale of food to Cuba.
    Senator Dorgan. Let me ask--Mr. Alvarez----
    Ambassador Reich. It was different for a long time.
    Senator Dorgan. It was indicated by Secretary Powell that 
Mr. Alvarez was allowed to come to this country previously, and 
he said, quote, ``A good part of his time was spent lobbying 
against policy of the U.S. Government,'' in addition to 
whatever else he might have been doing with respect to serving 
as a purchase agent. Was the Secretary referring to the fact 
that Mr. Alvarez said that he hoped that perhaps Cuba could 
purchase some additional food from the United States?
    Ambassador Reich. No, sir. I don't believe--first of all, I 
don't know exactly what the Secretary meant by that, but I can 
tell you that my information is, from those officials who 
looked at Mr. Alvarez's application, that he had quite an 
extensive speaking tour around the United States, speaking to 
groups. And in the past, Alimport and other Cuban officials 
have come to the United States to lobby against U.S. policy----
    Senator Dorgan. Well----
    Ambassador Reich.--something which are not allowed to do in 
Cuba. And from the standpoint of U.S. foreign policy, we have 
to take the principle of reciprocity into consideration when we 
make decisions, and there is no reciprocity in that regard with 
Cuba. That's one of those areas in which Cuba is different from 
all of the other countries with which we have normal trading 
relations.
    Senator Dorgan. I would simply observe that when I traveled 
to Cuba, I certainly lobbied against a series of issues that 
the Cuban would espouse, and I saw no restriction in doing so. 
But I think that what happened when Mr. Alvarez visited the 
United States previously is, he suggested that it would be nice 
if Cuba could purchase some food from the United States. And 
somehow somebody felt that selling chicken breasts and turkey 
legs and wheat and dried beans to Cuba undermines this 
country's economic interests, and I find that rather Byzantine.
    Ambassador Reich. I thought you said that those sales 
actually took place.
    Senator Dorgan. Well, there's been about $75 to $90 million 
worth of sales taken place, made as difficult as is possible, 
of course, having the transaction occur through a French bank, 
but made more difficult, it seems to me, by the antipathy of 
the State Department and others in saying, ``You know, we're 
not going to make it easy. In fact, if you want to do a buying 
mission to this country, skip it. We're not going to let you 
in.'' It seems to me that there is a discouragement of these 
policies.
    I have a series of other questions I want to ask, but let 
me call on my colleagues. Senator McCain, let me call on your 
first. There's a vote occurring, but there's 10 minutes 
remaining. Let's ask Senator McCain to inquire.
    Senator McCain. Thank you, Mr. Reich and Ambassador 
Donnelly. On a visit--recent visit to Teheran, Castro said that 
Iran and Cuba together could, quote, ``bring America to its 
knees.'' Are you familiar with that quote, Mr. Secretary?
    Ambassador Reich. Yes, sir.
    Senator McCain. And was he referring to anything specific, 
like late last year, Jose de la Fuentes, the former director of 
research at Cuba's Center for Genetic Engineering and 
Biotechnology, wrote that he was profoundly disturbed about 
Cuban sales of dual-use technology to Iran. Remember the ``axis 
of evil'' that sponsors terrorism. How worried are you about 
Cuban-Iranian cooperation, particularly in the issue of bio-
terrorism?
    Ambassador Reich. Well, sir, I think we should be quite 
concerned. As both Under Secretary of State John Bolton and the 
Assistant Secretary of State for Intelligence and Research Carl 
Ford have said--in fact, one--Mr. Ford, before Congress in 
testimony--and I'll read you--I want to be very careful what I 
say about their--the concern we have with Cuba's biochemical 
capabilities. It says, ``U.S. Government experts believe that 
Cuba has at least a limited offensive biological warfare 
research-and-development effort and has provided dual-use 
biotechnology to other rogue states.'' One of those states may 
very well be Iran, and it could be that that's what Mr. Castro 
was referring to when he was in Teheran and made that statement 
that you correctly quoted. We stand----
    Senator McCain. The same----
    Ambassador Reich.--we stand by those statements, sir.
    Senator McCain. The IRA terrorists who were arrested 
training the FARC in urban warfare and bomb-making techniques 
in Colombia had used Cuba as their base of operations. Is that 
true?
    Ambassador Reich. It appears that way. And one of them 
actually had been stationed in Havana, apparently for at least 
5 years.
    Senator McCain. Cuba provides a safe haven for Basque ETA 
terrorists as well as U.S. fugitives from justice?
    Ambassador Reich. That is correct.
    Senator McCain. In the case of one, he's wanted for murder 
for 30 years or so.
    Ambassador Reich. Yes, sir. There are a number that are 
wanted for murder. One in New Jersey. I believe on in New 
Mexico.
    Senator McCain. Let's go back to the FARC again, because we 
see Colombia in such dire straits. What's your view of their 
assistance and cooperation and--in fact, I believe, in some 
cases, sending arms or training to the FARC in Colombia?
    Ambassador Reich. Well, sir, one of the reasons this 
Administration and all previous U.S. Administrations have been 
so concerned about enabling Castro to obtain hard currency is 
that whenever Castro has had excess currency, he has used it in 
many cases to undermine U.S. interests and promote terrorism 
around the world. He has bragged, as recently as last year, 
that there wasn't a single country in this hemisphere, he says, 
with the exception of Mexico, and I'm not sure we can believe 
that one either--he has bragged that he supported what we would 
call terrorist movements and he calls ``wars of national 
liberation'' in every country in this hemisphere.
    Senator McCain. Do you have views, particularly in relation 
to the FARC in Colombia?
    Ambassador Reich. With the FARC, there have been 
longstanding ties; with the ELN, even more close. The ELN is 
the other Marxist terrorist group in Colombia.
    Senator Dorgan. I wonder, would you describe those ties 
that you just cited to Senator McCain?
    Ambassador Reich. Sir, some of that--most of that is 
classified information. I would be happy to do that--or request 
that the Bureau of Intelligence and Research give you that 
information.
    Senator McCain. Canada, Japan, and the European Nation have 
traded with Cuba for decades. Has it had any effect on the 
human rights situation in Cuba, or can you see any beneficial 
effect in the daily lives of----
    Ambassador Reich. Apparently not.
    Senator McCain.--the Cuban people?
    Ambassador Reich. Yeah, apparently not, sir. There are no 
independent civil institutions in Cuba. There's no independent 
trade union. There's no newspaper, television station, radio, 
civic association. And, as you correctly point out, many 
countries around the world have traded with Cuba for--well, for 
as long as Castro has been there, which is 43 years.
    Senator McCain. I noticed yesterday that the President said 
that he wanted to reinstate mail service between Cuba and the 
United States. Why would any nation not want to exchange mail 
with another country?
    Ambassador Reich. Well, I suppose for the same reason that 
Cuba jams broadcasts of Radio Marti and TV Marti. They do not 
want--or they don't allow independent newspapers or people----
    Senator McCain. But I'm talking about letters.
    Ambassador Reich. Letters, because they transmit 
information, and the government of Cuba is afraid of 
information.
    Senator McCain. Our Interests Section has undertaken an 
admirable campaign to distribute radios to ordinary Cubans. How 
has the Cuban government reacted to that?
    Ambassador Reich. They have called this ``a subversive 
act'' by the United States. They said that radios are--these 
radios are designed to undermine the control of the government 
of Cuba.
    Senator McCain. By providing Cuban citizens with----
    Ambassador Reich. With access to----
    Senator McCain.--weapons such as a radio that would 
overthrow the government.
    Ambassador Reich. Correct.
    Senator McCain. Well, you've got to have sympathy for those 
Members of Congress who visit Mr. Castro, I think, Mr. Reich. 
Those of us who oppose increasing trade with this two-bit 
dictator and support the President have never been subjected to 
a four-, five-, 6-hour dinner and lecture from Mr. Castro, and 
it must be a unique experience, but one that I'm sure I'll 
never have the privilege of listening to. But it's remarkable--
it's remarkable to me. It really is.
    Mr. Lenin said that, ``The capitalists will hang 
themselves, and we'll give them the rope--sell them the rope to 
do it,'' and I think this is exactly the path that some of my 
friends, particularly in the farm business, are having us move 
through.
    So the President was very clear in what he--what our policy 
toward Cuba is. And if you'd like to maybe restate that 
briefly, in conclusion, I'd be pleased to hear it again.
    Ambassador Reich. Yes, sir. The President--if I may 
paraphrase--the President said that it is not his intention or 
the intention of the U.S. Government to maintain this embargo. 
He would like to lift the embargo tomorrow if the conditions 
existed. And the conditions are the same conditions that exist 
in every other country--normal country in the world with which 
we trade, certainly in this hemisphere, of free election, free 
press, no political prisoners. And the President said that if 
those conditions existed, he would come to the Congress and 
work to change the travel ban and the embargo.
    Senator McCain. Thank you, Mr. Chairman.
    Senator Dorgan. Because there's a vote out in the Senate, 
the Senate will stand--the Committee will stand in recess for 
10 minutes.
    [Recess.]
    Senator Dorgan. The Subcommittee will come back to order.
    Senator Boxer?
    Senator Boxer. Thank you so much, Mr. Chairman.
    Mr. Reich, I assume you got your information about the 
biological weapons from the CIA. Is that correct?
    Ambassador Reich. No, ma'am. I got it from the State 
Department statement.
    Senator Boxer. The State Department says that they are 
making biological weapons?
    Ambassador Reich. No, that's not what the State Department 
said. The State Department----
    Senator Boxer. Well, what do you think?
    Ambassador Reich. Oh, ma'am, that's----
    Senator Boxer. Based on what--so the CIA doesn't know 
anything about this. Is that what you're saying?
    Ambassador Reich. Oh, no, no. I didn't say--you asked me if 
I got my information from the CIA. I said I got it from the 
statement that both the Assistant Secretary of State for 
Intelligence and Research, who deals on a daily basis with the 
intelligence community, not just CIA--DIA, NSA, a number of 
others----
    Senator Boxer. And what exactly did they tell you?
    Ambassador Reich. They told me the following, ``The U.S. 
Government--U.S. Government experts believe that Cuba has at 
least a limited offensive biological warfare research and 
development effort and has provided dual-use biotechnology to 
other rogue states.''
    Senator Boxer. Well, why did Secretary----
    Senator Dorgan. Would you yield on that point?
    Senator Boxer. Well, I just wanted to follow it up, and 
then I will.
    Secretary Powell, speaking to reporters while traveling to 
a NATO meeting, said, ``The Administration says while Cuba has 
the ability to produce biological weapons, it stopped short of 
claiming it has actually done so.'' So you're saying that they 
have already distributed it and they're conducting an R&D 
effort.
    Yes, I'll yield to my friend.
    Senator Dorgan. Let me just ask the Secretary. This is a 
May 2002, which is this month, report by the Department of 
State, Patterns of Global Terrorism 2001. And, under Cuba, it 
says nothing about this issue. I mean, is it an oversight? This 
is released this month from the State Department.
    Ambassador Reich. Sir, I can tell you that the release of 
the information that I mentioned was in March of 2002 by the 
Assistant Secretary of State for Intelligence and Research, and 
again in May by the Under Secretary of State for Arms Control 
Science and Technology.
    Senator Dorgan. Well, let me just--we're getting off on 
another subject here, but because you've raised it in your 
testimony, ``A State Department official's five-alarm warning 
about bio-terrorism''--this is the Washington Times--``in Fidel 
Castro's Cuba this week was apparently a bolt from the blue at 
the Pentagon. Pentagon officials said it was a subject that 
simply had not been in Mr. Rumsfeld's radar screen. He 
indicated there was no particular urgency about it in the 
building.''
    First of all, the State Department has omitted it in a May 
2002, which is this month--in a May ``Patterns of Global 
Terrorism,'' and, second, it appears that the State Department 
has not visited with the Defense Department about it. Is this--
can you tell us the origin of all this?
    Ambassador Reich. The origin is the intelligence community. 
The intelligence community--I've talked to Under Secretary 
Bolton about this, and his language was not drafted by his 
office. It was drafted by the intelligence community.
    Senator Dorgan. Do you think they'd fail to notify the 
Defense Department?
    Ambassador Reich. Sir, you'll have to ask Secretary 
Rumsfeld about that.
    Senator Dorgan. Yeah, but has the State Department failed 
to include it in their May 2002 Patterns of Global Terrorism?
    Ambassador Reich. I do not know who publishes that 
particular document.
    Senator Dorgan. The State Department.
    Ambassador Reich. What part----
    Senator Dorgan. Your department does.
    Ambassador Reich.--of the State Department?
    Senator Dorgan. Well, the United States Department of 
State. I don't----
    Ambassador Reich. Which----
    Senator Dorgan. Bureau of Arms Control, I'm told.
    Ambassador Reich. That's John Bolton's office, sir. So----
    Senator Dorgan. So why would he omit that?
    Ambassador Reich. It could very well be that it went to 
print before. Remember, he made his speech on May----
    Senator Dorgan. Well, it's dated May--it's dated May.
    Ambassador Reich. Right, but they go to print a long time 
before, sometimes--sometimes 2 months before. Bolton made his 
remarks on May the 6th.
    Senator Dorgan. Yeah, I think I've made the point. I 
appreciate your yielding. My point is that this seems to 
originate mysteriously, but it doesn't appear in the report. 
State Department's never heard of it, but let me yield back.
    Ambassador Reich. Well, what do you mean, ``State 
Department's never heard of it''? You mean Defense Department?
    Senator Dorgan. Well, this is the State--no, State 
Department. This is a State Department publication that we just 
received on Capitol Hill. It says Patterns----
    Ambassador Reich. It's incomplete, though.
    Senator Dorgan. It's what?
    Ambassador Reich. Incomplete--must be incomplete, because 
that comes out of the Bureau of Arms Control, which is headed 
by John Bolton, who is the one who made the speech.
    Senator Dorgan. Would you alert him then----
    Ambassador Reich. Oh, absolutely.
    Senator Dorgan.--that there's something going on that he 
doesn't include in his report?
    Ambassador Reich. He may be watching this right now.
    Senator Dorgan. This will be very helpful to him, then, 
won't it?
    Ambassador Reich. Yes.
    [Laughter.]
    Senator Dorgan. I'm sorry, I'm told it's the Bureau of 
Counter-Terrorism in which this report originated.
    Senator Boxer?
    Senator Boxer. Yes. Mr. Reich, let me just be clear with 
you----
    Ambassador Reich. Yes, ma'am.
    Senator Boxer.--so you understand my position. When Israel, 
many years ago, learned that Iraq was developing nuclear power, 
we all know what they did, and they caught a lot of rage for 
it. But I think they did the right thing.
    You may be surprised to know that I believe if there, in 
fact, is an active program that you describe, where there's 
help being given to other nations and their R&D and all of 
this, I'd go after it in two and a half seconds. I wouldn't 
just come up here and talk about it. I would make sure that the 
CIA knew it, because if, in fact, we have those kind of weapons 
not just 90 miles from our shore, why on earth would the 
President, knowing this, put our troops in harm's way at 
Guantanamo right near biological weapons? Why do you think he 
chose Guantanamo?
    Ambassador Reich. I am not qualified to answer that 
question, because you're talking about----
    Senator Boxer. But you're qualified to come up here and to 
say one of the reasons the President made his speech is because 
they're developing these weapons, but yet the same President 
puts our troops in Guantanamo.
    Ambassador Reich. Ma'am, I think if the President----
    Senator Boxer. You know, it doesn't make any sense. It's 
garbled. And I think if, in fact, Mr. Chairman, we know that 
this threat exists 90 miles from our shore, I would take the 
strongest action, but let me tell you what I wouldn't do. I 
wouldn't punish the Cuban people by making it hard for them to 
get food, which I believe this Administration is doing, by 
keeping them in the dark about what true democracy, which I 
believe this Administration is doing.
    Let me ask you about China. Do you think that China is a 
communist dictatorship?
    Ambassador Reich. Yes, I do.
    Senator Boxer. OK. Do you think they have human-rights 
violations in China?
    Ambassador Reich. Yeah, we're very concerned about human 
right violations.
    Senator Boxer. Right, and so are we. Do you support trading 
with China?
    Ambassador Reich. That's another department--another 
bureau. I----
    Senator Boxer. I'm asking your opinion.
    Ambassador Reich. My colleague from the----
    Senator Boxer. I'm asking your opinion.
    Ambassador Reich.--Asian-Pacific Bureau doesn't usually 
comment on Mexican affairs, so I try to not----
    Senator Boxer. Well, you know what? Are you refusing to 
comment on that?
    Ambassador Reich. That's--there are many differences 
between Cuba and China.
    Senator Boxer. Well, let's talk about it.
    Ambassador Reich. All right. One of them is the fact that, 
in China, people are allowed to own private property.
    And, by the way, President Bush has been very clear on 
this. He is in favor of trade with China because there have 
been--there's been movement on the economic front--not on the 
political front, and I agree with you that there are violations 
of human rights, and the State Department Human Rights Report 
clearly makes that point. And we--and the President has made, 
even when he went to China.
    Senator Boxer. So it's economics that's the driver----
    Ambassador Reich. In the case of China----
    Senator Boxer.--not human rights, not bio-terror, not all 
these other things you said.
    Ambassador Reich. No, that's not what I said.
    Senator Boxer. Well, that's the argument----
    Ambassador Reich. What I said is----
    Senator Boxer.--you've given me.
    Ambassador Reich. What I said is--one half of agricultural 
production in China is in private hands. You have private 
property. Chinese are allowed to own their--start businesses 
and operate businesses. None of this exists in Cuba. In China--
--
    Senator Boxer. It doesn't--we went to restaurants where the 
people told us that they get to own and operate. Is that----
    Ambassador Reich. Right, there are----
    Senator Boxer.--incorrect?
    Ambassador Reich.--there are 160,000 self-employed people 
in Cuba out of a----
    Senator Boxer. OK, because you said there was nothing.
    Ambassador Reich.--population of 11 million.
    Senator Boxer. Now you say there's 160,000. Well----
    Ambassador Reich. Right, I have----
    Senator Boxer.--that's progress. Good, they're moving. Wait 
until we come in there.
    Ambassador Reich. No, they're moving in the wrong 
direction, because----
    Senator Boxer. Oh, OK.
    Ambassador Reich.--at one point it was 210,000. Under----
    Senator Boxer. OK, they're moving in the wrong direction. 
And that's the reason why we should stay away and not teach 
them about capitalism and democracy and freedom and profits and 
all the things that we would like to talk to them about, 
because they're moving in the wrong direction.
    Ambassador Reich. No, they--believe me, the people of Cuba 
know about capitalism and democracy. It's Fidel Castro who's 
keeping them from learning. It's not the United States.
    Senator Dorgan. Let me ask the Senator to yield for one 
additional point.
    Senator Boxer. Yes, I will.
    Senator Dorgan. Is it not the case that, with respect to 
China, that it was President Nixon who went to China, and that 
was the origin of the trade and tourism with China with one of 
the most repressive regimes on the earth. Mao Tse-tung at that 
point was running China, a repressive communist government. And 
over a long period of time, this country's policies have 
suggested the engagement is better than non-engagement, that 
engagement leads to more progress. And I think Senator Boxer is 
asking the question: Why is that the case with respect to 
China, a communist country, Vietnam, a communist country, but 
not with respect to Cuba?
    Ambassador Reich. Well, I think in the case of China, the--
from what I--you know, from what I understand at the time, 
there were very good geopolitical reasons for the United States 
to try to improve relations--political relations with China in 
order, frankly, to trump the Soviet Union, which was our larger 
adversary at the time and a more clear and present danger.
    So you could make a very good foreign policy argument for 
dealing with China, just as we allied ourselves with Stalin in 
World War II, even though he was clearly a murderer, because 
Adolf Hitler presented a more clear and present danger at that 
time. So sometimes it's necessary to do business with people 
you don't particularly like.
    You can't make that case in the case of Cuba, because 
there's no geopolitical or strategic interest for----
    Senator Boxer. How about 90 miles from our coast?
    Ambassador Reich. What about it?
    Senator Boxer. Why wouldn't want to influence a country 
that's 90 miles off our coast?
    Ambassador Reich. Well, we----
    Senator Boxer. Where the people there are dying to have us 
there, where the dissidents say, ``You're wrong''--that's what 
they told us. The dissidents said, in one voice, ``We've 
changed our mind.'' Don't you respect those dissidents?
    Ambassador Reich. Oh, yes, ma'am, I respect those 
dissidents. I also----
    Senator Boxer. Do you support the----
    Ambassador Reich. I also talked to them after--once they've 
left the island, they tell us that what they say on the island 
they have to say because they're under surveillance, and 
there's a Cuban law, in fact, that says that if you take a 
position against the U.S.--I mean, the Cuban government 
position, you go to jail.
    Senator Boxer. Well, the interesting thing is, they've 
changed their mind on it.
    Ambassador Reich. Who's changed their mind?
    Senator Boxer. These dissidents that we met with said they 
never used to believe that, but now they believe that the more 
light that gets shined onto their country and to them, the 
better off they are. So obviously, when they had the other 
position, they weren't treating any differently now. They're 
treated badly all across the board.
    You know, and the difference comes down to what Senator 
Allen said at the beginning. He strongly supports the policy 
because he doesn't want to give this dictator, you know, any 
help. And my view is that if you go down there, and I would 
encourage you to do so, and meet with the dissidents, the 
point--they're begging us to come down there. They want to see 
Americans there, because they know we're going to nose around, 
we're going to talk to people, we're going to tell them the 
truth about what's happening.
    And so all I could say is, as I look at this--you know, 
when I went down there, I didn't know what to expect. What I 
saw was very different, in many ways, because a lot of private 
capitalists come in from all of our trading partners, as 
Senator Allen said--Mexico, from Canada, from the EU, and the 
rest. And as far as that they're still impoverished, you bet. 
But they've made up $4 billion that they lost from the Soviet 
Union.
    They're just about--I spoke to some musicians there, and we 
had some very good talks, and they said it was pretty horrible 
when the Soviet Union pulled out all the money, and it's still 
not good now, but it's back to where it was at that point 
because of the capital flowing in from our allies. And they 
asked us to help them. They want our help.
    And this policy's cold. This policy's cold to the people. 
And that's why I have such a problem with it. And Castro loves 
it. Castro can harangue for 5 hours about it. And it's the only 
thing that's keeping his--his, you know, government getting 
at--any kind of support at all--a common enemy. It was the same 
thing with Elian.
    Ambassador Reich. Well, I'll leave----
    Senator Boxer. It was the same thing with Elian.
    Ambassador Reich. Yeah.
    Senator Boxer. The bottom line is, I think you need to 
choose, Mr. Reich, between--this is my opinion; I don't think 
that you will--the dissidents who are there today who are 
telling us these things and the people who left a long time 
ago. And if you talk to some of the younger people, they're 
changing their mind.
    And I guess what it comes down to, to me, is--when it came 
to China, this is what President Bush said, if I can put my 
hands on it. Here. Here's what he said. He was then Governor of 
Texas, Senator Allen. This is what he said about the vote on 
China trade. He said, ``This measure will help open markets to 
American products and help export American values, especially 
freedom and entrepreneurship.''
    Unbelievable. No one can tell me how it is intellectually 
honest--intellectually honest--to take this statement that he 
made about opening trade with China, ``This measure will help 
open markets to American products and help export American 
values, especially freedom and entrepreneurship.'' He didn't 
say that China was moving to capitalism, Mr. Reich. It's 
nowhere in these words.
    Ambassador Reich. He has addressed----
    Senator Boxer. He said exactly what Senator Dorgan and I 
are saying today. Open up the markets, let them meet our 
entrepreneurs, let them understand our system, let them hear 
about what it means to live in freedom, and Castro will be 
gone. Over and out.
    And all these years, giving Castro something to unify 
around, you know, a policy that doesn't work, that is failed--
it's not like this was an idea in a classroom that you put out 
there. It's an idea that has been practiced here.
    So, again, I don't think that your answer on the China--
your answer that, well, China was moving to capitalism--(a) I 
don't believe they've moved any quicker to capitalism at all. 
From what I can tell, they're still--they control 51 percent of 
every foreign investment. I've been to China. Fifty 1 percent 
of every foreign--that's not capitalism, but we're trading with 
them in the hopes that they'll understand, in the end, that 
that's wrong.
    Anyway, I would yield.
    Senator Dorgan. Senator Boxer, thank you.
    Senator Allen?
    Senator Allen. Thank you, Mr. Chairman. As far as visitors 
to Cuba, one that I would hope visitors would see, but I don't 
think most visitors are going to Cuba to see political 
prisoners. They're going there, I assume, to do other things--
maybe recreation, maybe a resort. For example, I wish they 
would see an individual called Francisco Chaviano Gonzalez, who 
is in the midst of serving a 15-year sentence because he--and 
tried under a military tribunal, although he's a civilian--he's 
serving these 15 years because he had information implicating 
the Castro government in the sinking of a ship and the deaths 
of 41 men, women, and children who were trying to flee to 
freedom.
    As far as when people go to Cuba and they go to these 
luxury hotels, I understand that as far as the hiring--and 
somebody comes and pays, whether it's in Canadian dollars or 
U.S. dollars or French francs or euros these days or other 
currencies--that they have a very unique labor practice there 
in Cuba. Either Mr. Reich or Ambassador Donnelly, could you 
share with us or walk us through some of these unique labor 
practices, as far as what happens to those dollars or--whether 
they're Canadian, U.S. or euros--and how are those people 
hired, and what are they--how are they paid?
    Ambassador Reich. When a foreign investor or operator--
there's very few foreign investors. There's no--very little 
real investment in Cuba. What the Cuban government does is 
builds, let's say, a hotel and then gets a foreign operator to 
run it. The foreign operator needs staff. Let's say they want 
to hire a cook. It is decided that the salary for the cook will 
be $400 a month. The foreign operator pays the Cuban government 
$400 or the equivalent into hard currency of that country.
    The Cuban government then turns around--first of all, 
assigns an individual. The operator doesn't just go out and 
hire the cook that that hotel operator wants. The Cuban 
government assigns the cook or the maid or the drivers, whoever 
it is--and usually, by the way, they are members of the 
communist party or people who are to be rewarded with these 
jobs, because they're highly coveted. The government then pays 
those people in pesos at the official rate, which is also the 
artificial rate, of one to one--one peso to the dollar, when 
the real rate is 20 to the dollar. So, in effect, the Cuban 
government is confiscating 95 percent of the income of that 
worker, and Castro keeps it for himself. And that is why 
President Bush said yesterday that trade with Cuba today would 
only serve to line the pockets of Fidel Castro and his cronies, 
and that's why he opposes it.
    Senator Allen. Let me ask you another question further on 
the issue that President Bush brought up, and that is offering 
scholarships to Cubans who would want to come to this country 
to study. The Chinese government, while I don't hold any--for 
the government of the People's Republic of China, nevertheless, 
I think that if their citizens had radios from this country, 
they wouldn't be upset. They'd probably be manufactured, 
actually, in China. But, nevertheless, they would allow them to 
have radios. They do have access to the Internet. 
Unfortunately, a bit too restrictive, as far as I'm concerned, 
but people find ways around some of the government regulations. 
And the People's Republic of China does allow Chinese citizens 
to come to this country and study in our schools. Many go back 
to China. Some end up staying here or going elsewhere in the 
world.
    What do you think the Castro government's response will be 
to that very generous offer to have scholarships for Cuban 
people to come and study in our universities?
    Ambassador Reich. Well, it's hard to predict, but I think 
it would probably follow the pattern of the past, that he does 
not allow--he doesn't trust his people, so he only lets people 
leave who are members of the communist party or are completely 
trustworthy, and he never lets people travel outside the 
country with their families, or very seldom with their 
families. He has turned down even members of his immediate 
family for scholarships in other countries. One of his nieces 
was offered a scholarship in Mexico many years ago to study 
music--I believe it was music--and she could not leave, because 
they were afraid that she was going to defect.
    Senator Allen. Let me turn to the Interests Section 
project, which has received quite a bit of attention lately. 
The President brought that up, that there are 11,000 very 
brave, courageous individuals in Cuba who have signed this 
petition to be able to alter or have at least a statement and a 
vote, a referendum on free speech and freedom for political 
prisoners. What is the importance of the signing of that 
document?
    Ambassador Reich. Well, the Cuban constitution allows for 
the people to come together and present a referendum, a 
proposal, to the assembly calling for a change in the 
constitution. They need 10,000 signatures. The project that a 
dissident by the name of Luis Valdo Piyare has been directing 
for several years now called Project Valera, named after one of 
the Cuban patriots for--in the war of independence against 
Spain, has gathered, we're told, about--actually 17,000 
signatures. They turned in 11,000 names, holding some in 
reserve. After a lot of harassment from the secret police, from 
the security police, signatures to the referendum were 
interrogated. In many cases, the signature pages were seized by 
the government. False challenges were issued. People were 
visited at their homes and reminded that this could be seen as 
an anti- --as a counter-revolutionary action.
    And in spite of that, many thousands of people decided that 
they were going to exercise their rights--which is why I said 
earlier the Cuban people know very well what democracy and 
freedom are. They know very well that they're being denied that 
by their own government. The organizers turned this document in 
to the assembly, and I don't think that the Cuban government 
knows what to do with it now, because it is allowed, even under 
the constitution. Of course, so are free elections allowed 
under the constitution, and they haven't had a free election in 
43 years. So it'll be interesting to see how the Cuban 
government reacts to this.
    Senator Allen. My time's up, Mr. Chairman. Thank you.
    Senator Dorgan. Secretary Reich, thank you. The brief that 
you make against the Cuban government, and, for that matter, 
the brief that my colleague, Senator McCain, made against the 
Cuban government, will find no detractors here. That's not the 
issue. The issue--you could make that brief against other 
governments with whom we have substantial and aggressive 
international trade, to whom we send and sell regularly food 
and other products. So that's not the issue.
    The issue today is, for me, is the issue of being able to 
comport with the desire of Congress to lift that embargo with 
respect to food. And, as I indicated to you, it seems to me, 
based on recent events, the State Department recognizes that it 
must allow certain food to be sold. You will not interfere with 
that, but you will not do anything to encourage it. In fact, 
you will do some things to discourage it. Am I wrong about 
that?
    Ambassador Reich. Sir, I don't believe we've done anything 
to discourage it.
    Senator Dorgan. Well, did you consult with any agricultural 
groups, for example, in this country when you decided that it 
is not important for a purchaser of U.S. food to be allowed to 
visit those who would sell food? Did you consult with any 
agricultural groups before you made that judgment?
    Ambassador Reich. Sir, I was a United States Ambassador for 
3 years in Venezuela. I got an award from the U.S. Wheat 
Growers for aggressively restoring 80 percent of the wheat 
market that had been taken away by an arbitrary political 
decision by the government of Venezuela. I have been very proud 
of my record in support of U.S. agricultural exports. You can 
ask the Washington State Apple and Pear Growers what we did in 
Venezuela between 1986 and 1989 to have the government of 
Venezuela allow those imports, which were prohibited when I got 
there.
    So I share your concern about helping U.S. producers sell--
to sell. I think our only argument here is, will the American 
people be paid for what they're selling, or will they be--end 
up holding the bag for bad purchases?
    One thing we haven't talked about--bad credit--one thing we 
haven't talked about here is that Castro has not paid principal 
or interest on his debts for the Paris Club since 1986, 16 
years. No one will issue him any significant amount of credit. 
What he wants from the United States, the largest market in the 
world, is credit so he can turn it around and tell the other 
people he owes money, ``Look, the Americans are lending me 
money. You should lend me money, too.'' This is a giant Ponzi 
scheme that he's running. He wants to borrow money from us so 
he can pay the other customers that he hasn't paid for 16 
years.
    I've had, since these sales have--cash sales of 
agricultural products began to Cuba, I've had two Ambassadors 
of European countries come to me, of all people, and complain 
that their exporters in Europe are not being paid by Castro. I 
said, ``Get yourself a better collection agency. That's--we're 
not in the business of getting you money for your products. You 
must have made some bad sales to a deadbeat customer.''
    So that's--I think it's our responsibility as government 
officials to protect the credit of the United States. And I'm 
afraid that if we make credit sales to Cuba, the American 
taxpayer is going to end up holding the bag, because Castro is 
not going to pay.
    Senator Dorgan. Mr. Reich, no one has suggested that we 
make credit sales to Cuba, that I'm aware of. You're answering 
a question I've not asked. I asked a question, originally, 
about whether the State Department has decided to be an 
impediment to sales of food to Cuba.
    And let me ask you about a statement that you were reported 
to have made. I know that others have asked you about this. 
There was a news report that said--quote, ``We are not going to 
be economic suckers to this regime.'' Mr. Reich, did you say 
that? And, if so, can you describe--was that said in 
circumstances that relate to the sale of food to Cuba?
    Ambassador Reich. No, sir. That is one of many statements 
that have been misquoted. What I said was, ``We are not going 
to provide economic succor,'' s-u-c-c-o-r. And obviously, the 
reporter who was listening to this either didn't--either had a 
limited vocabulary, or perhaps the microphone wasn't working 
properly, and he said we were not going to be ``economic 
suckers.'' I never said anything about being ``economic 
suckers.''
    We will trade with countries that are able to pay. We will 
even provide humanitarian assistance.
    And, by the way, in the case of Cuba, with all due respect, 
the United States is the single-largest provider of 
humanitarian food and medicine, donations, to Cuba, more than 
all the other countries combined. So we have nothing to be 
ashamed of.
    Senator Dorgan. Well, Mr. Reich, this hearing is not about 
being ashamed of anything. The hearing is about whether the 
policies that we've had allow the unimpeded access for our 
farmers to Cuban markets. And contrary to the implications of 
some, I think it's not--it's not something we should be ashamed 
of, suggesting that that which we produce in such great 
abundance that the world needs so significantly--that is, 
food--be provided on a cash basis to those who need it.
    Mr. Reich, have you visited Cuba in recent years?
    Ambassador Reich. No, sir.
    Senator Dorgan. And would you have a notion about how our 
embargo for 40-some years has affected people in the streets in 
Cuba, especially with respect to withholding of food shipments 
to Cuba or food sales to Cuba?
    Ambassador Reich. Yes, sir. I agree with President Carter 
in a statement he made last week, that it is not the U.S. 
embargo that has caused misery in Cuba, but 43 years of 
communism.
    Senator Dorgan. And do you think the U.S. embargo has 
injured Fidel Castro?
    Ambassador Reich. Yes, I believe it has denied him hard 
currency that he would have used to undermine our interests 
around the world.
    Senator Dorgan. Well, there's precious--I would say, Mr. 
Reich, I appreciate your willingness to come and testify--
there's precious evidence that 40 years of failure should be 
considered a success.
    And, frankly, my feeling is that the use of--especially the 
use of food and medicine as a part of our embargo apparatus 
anywhere in the world is not a moral policy. I don't believe it 
was smart to do it with respect to Russia in the dark days of 
the evil empire. I believe the use of food as a weapon is 
fundamentally wrong and it lacks a moral base for public 
policy. But----
    Ambassador Reich. I agree with----
    Senator Dorgan.--my hope is this, Mr. Reich. The Congress 
has spoken on one piece of this. The Congress will speak 
additionally. There is anywhere from 65 to 70 votes in the U.S. 
Senate believing that, after 40 years of failure, we ought to 
do something that tries to engage--not with Fidel Castro, but 
engage with the Cuban people. And my hope is that, with 
Congress having spoken on this subject of being able to sell 
food to the Cubans, that we will have the cooperation of the 
State Department to allow our farmers to do that, and we'll 
have the cooperation of the State Department if there's a $1 
billion market for food 90 miles south of us, and that food 
will be purchased from Americans who produce it and go to those 
in Cuba who need it. My hope is that the State Department will 
accommodate that and be helpful with a set of policies to allow 
that to happen. That, after all, is the law. It's what the 
Congress has determined the law should be, and I would hope for 
cooperation, Mr. Reich, from you and Ambassador Donnelly, in 
making that kind of policy a success.
    Ambassador Reich. We'll certainly follow the law, sir.
    Senator Dorgan. Thank you very much for your appearance. 
Ambassador Donnelly, yes, you had one comment?
    Ambassador Donnelly: Thank you, Mr. Chairman. I simply 
wanted to say that from the perspective of the economic side of 
the State Department, I think we have, frankly, done a good job 
of trying to live with the law that the TSRA, the Trade 
Sanctions and Reform and Export Expansion law of 2000 that you 
referred to, in the sense of we are doing, as you correctly 
said, nothing to encourage exports to Cuba. We believe--in 
fact, the law says--we are not to do anything to assist. We are 
not doing anything to discourage.
    We are giving--the licenses through the Commerce Department 
for export sales are processed quickly. It's our policy to do 
them within 9 days--nine working days. I believe there are none 
currently sitting at the State Department. We do, through the 
application process, through the OFAC office at Treasury, for 
officials--I'm sorry, U.S. business people who want to travel 
to Cuba, they can apply. They are considered promptly and 
decided on a case-by-case basis. We are prepared to consider 
applications from technical experts from Cuba in the sanitary/
phytosanitary area who need to come to inspect plants, samples 
and so on like that.
    So I think--I mean, the law can be changed in one direction 
or another, certainly, as you indicated. But as far as the law 
we've been given, we think and--we're doing what Secretary 
Powell wants us to do, which is to walk that fine line and 
neither encourage nor discourage. And if there is evidence that 
we are discouraging it, I'd certainly like to hear about it and 
see what we can do about it.
    Thank you.
    Senator Dorgan. Well, I cited at the start--and I think 
this hearing helps me with respect to understanding that--I 
cited the news report that said a State Department official 
said the denials comply strictly with the law and meet a Bush 
Administration policy goal of discouraging trade with Cuba. 
Ambassador Reich--or Secretary Reich, you have said that is not 
the case. I appreciate that. That's helpful, because it is not 
the case that Congress would want a State Department to 
discourage, especially, the sale of food to Cuba. We explicitly 
allowed the opening on that embargo for the purpose of being 
able to sell food to Cuba.
    Senator Boxer, did you have one comment?
    Senator Boxer. I do. Well, I have----
    Senator Dorgan. Well, we have three additional witnesses 
that I want to get to the table.
    Senator Boxer. I know. I have 1 minute's worth of comments.
    Senator Dorgan. All right.
    Senator Boxer. One, when you said that Castro is running 
this Ponzi scheme, I thought maybe you talked to the Enron 
people, because that's what Fitzgerald called what they did, 
``the biggest Ponzi scheme.'' So I don't know if he or he 
didn't, and I don't doubt that he did. It's really up to our 
business people to make a judgment on whether they want to sell 
or not.
    Second, the common-sense test here, it seems to me, if 
you're really fair, is to have some consistency. And when 
President Bush, then Governor Bush, says, ``China's done some 
awful things. We want to get in,'' I don't see the consistency. 
It looks strange.
    And I also have to say, on the bio-terror front, you really 
need a meeting with Rumsfeld, because he's got our people in 
harm's way, if you're right on the point. And our people are 
guarding the most dangerous people in the world right near some 
bio-terrorism weaponry? We'd better figure that one out. So I 
hope you'll get with Rumsfeld on that point.
    And on Castro, I totally agree that he doesn't want to let 
his people out. Why would he? He's a dictator. You know, his 
people are suffering. Why wouldn't he--he's afraid that they'll 
defect. He's afraid that they'll talk. But why are we afraid to 
let our people out of here and into Cuba? It doesn't make 
sense. We should say, ``Go, with God's blessing.''
    And the last point. I met with those dissidents. We sat for 
2 hours. And you say they lied when they said they want to lift 
the embargo, because they're afraid. First of all, it was a 
totally private meeting. Second of all, if they're lying--I'll 
tell you, I'm a good judge of character. I've been around a 
long time. And I've seen my kids tried to tell me things that 
weren't true, and so on. I can tell. They were so happy we were 
there, Mr. Reich. They were so happy to see Americans. They 
want us there.
    So I hope you'll--as we consider the things that you told 
us today, and we will, I hope you think about what we're saying 
here, because we're on the same team, the American team, here. 
We're trying to get the same--the same aim, which is to get rid 
of a dictator, which is to bring democracy, to help our Ag 
people, to do all the things that make sense. But, you know, 
we're talking past each other, and it's frustrating for both of 
us, and I hope maybe you'll think a little bit about what we 
said here today.
    And I thank you, Mr. Chairman.
    Senator Dorgan. Senator Boxer, thank you very much.
    Ambassador Donnelly and Secretary Reich, thank you for 
appearing today.
    Ambassador Donnelly. Thank you, sir.
    Ambassador Reich. Thank you.
    Senator Dorgan. Next we will call Ambassador Dennis Hays, 
executive vice president of the Cuban American National 
Foundation, Mr. Stephen Weber, president of the Maryland Farm 
Bureau, and Ms. Lissa Weinmann, executive director of Americans 
for Humanitarian Trade with Cuba.
    If we could ask that the room be cleared, and we would ask 
the three witnesses to be present at the table, please.
    Ambassador Hays, why don't you proceed?

  STATEMENT OF HON. DENNIS K. HAYS, EXECUTIVE VICE PRESIDENT, 
               CUBAN AMERICAN NATIONAL FOUNDATION

    Ambassador Hays. Thank you, Mr. Chairman. With your 
permission, Senator, I'd like to submit my statement for the 
record and make a brief synopsis.
    Senator Dorgan. Without objection.
    Ambassador Hays. Listening to the discussion earlier, it 
seemed to me--I always try to look at maybe where there might 
be some areas of agreement, and I came up with four. And I'd be 
happy--if I misstate something, please correct me.
    One, I think there's a consensus that Castro is guilty of 
gross human rights violation, and it is an impediment to 
progress. Second, I think I heard that it's better if Cuba 
becomes a functioning democracy, with free speech and freed 
political prisoners, instead of a dictatorship. Third, it's 
better if Cuba is prosperous rather than bankrupt. And, fourth, 
to be prosperous, Cuba must allow private property, independent 
trade unions, small, medium, and large businesses, and the rule 
of law. It seems to me if we can agree on all those things, we 
should be able to maybe kind of move forward and then find some 
areas of common ground.
    Let me use my time, very briefly, to cover a couple of 
quick points that I hope will explain where the foundation and 
myself come from.
    First off, when we talk about an embargo, it's important to 
recognize that embargos work differently against different 
countries. An embargo against a democracy is very different 
from an embargo against a repressive regime.
    In the case of a democracy, you have a population which can 
feel economic pain and has the ability to reflect that pain 
upward through a political process, hopefully leading to some 
modification in behavior.
    With respect to a repressive regime, however, there's a 
disconnect. The pain that the people feel at the local level is 
not reflected in any meaningful way that can go up and change 
the policy of that regime. Therefore, embargos against 
repressive regimes are aimed at denying resources to those 
regimes, resources that would otherwise be used in areas that 
we feel are dangerous or harmful, either to others or to the 
citizens of those countries.
    With respect to Cuba, I think, going all the way back to 
Secretary Dean Rusk and moving forward, the embargo has, in 
fact, done that job. It has denied resources. It required the 
Soviet Union to dump over $100 billion into Cuba, $100 billion 
that might otherwise have been available to the Soviet Union 
during its final days. It has caused the Cuban military to drop 
from over 300,000 to few than 50,000. It has effectively 
stopped the Cuban navy and the air force as being effective 
operations, except against unarmed targets, of course. And it 
has also brought forth--the period of time where Cuba has been 
in economic extremists has also coincided with the time that it 
has not been able to support subversive organizations 
throughout the hemisphere, which also is the time that we've 
had a flowering of democracy in this hemisphere. Furthermore, 
the embargo forces, or it pushes toward, reform. Castro, in 
1993, said that he was forced to take actions that he would not 
otherwise, because of the economic necessities of the time.
    The only changes that have occurred in Cuba in the past 40 
years which have benefited the Cuban people is--the self-
employment, the farmers markets, dollarization--have come about 
in this time period. As soon as the economic pressure was 
relieved, Castro pulled back. He did not approve small 
businesses that many of us hoped he would. He's cut back on the 
number of self-employed and so forth.
    There's also a lot of talk about Cuba as a market. I think, 
as it was discussed a little bit earlier, Cuba is bankrupt. It 
owes every country that it has ever done business with and, to 
my understanding, has uncollectible debts. The only nation in 
the world that does not have uncollectible debts with Cuba is 
the United States. This is why, at the current time, we see a 
great push to get the United States engaged in an economic way. 
Quite frankly, Castro has run out of individuals or countries 
or companies prepared to loan him money into--to help finance 
his regime.
    The other part that I wanted to cover is that the embargo, 
by itself, is, at best, half of a policy. It's a policy that 
promotes the status quo, but not one that promotes a 
difference. What is needed is the two-prong--and I believe the 
President has taken a big step forward in this direction. On 
the one side, we deny resources that would otherwise be used by 
the regime. But second, we do reach out--and, Senator, I know 
you have some thoughts on this, and I'd be happy to discuss 
those--that there are ways to reach out and help the Cuban 
people directly.
    We want to stand with the people who are putting together 
the independent libraries, the people who are doing the 
independent journalism, the people who are the political 
prisoners and their families. That's the future of Cuba, and 
that's who we need to stand with.
    Thank you.
    [The prepared statement of Ambassador Hays follows:]

 Prepared Statement of Hon. Dennis K. Hays, Executive Vice President, 
                   Cuban American National Foundation

    Thank you Mr. Chairman, I appreciate this opportunity to appear 
before you and the Committee to discuss U.S. trade policy with Cuba.
    There are times in foreign affairs when the right thing and the 
smart thing are the same thing. Through successive Administrations, 
Republican and Democratic alike, America has stood with the people of 
Cuba and against a repressive regime that provides neither food nor 
hope. Where other nations have chosen to compromise their principles 
and the tenants of good business, we as a people have been steadfast 
both to our ideals and to common sense. Our trade policy toward Cuba 
serves to safeguard our national interests, foster reform, and protect 
the American taxpayer.
    In the forty-three years of its existence, the regime of Fidel 
Castro has gone to extraordinary lengths to crush the human spirit and 
individual initiative. Even now, in the 21st century, Cuban farmers are 
told what to plant, Cuban workers in joint ventures have over 95 
percent of their wages stolen by the state, and Cubans are forbidden to 
buy or sell property. And this, of course, concerns only economic 
restrictions. The political record of the Castro regime is far worse, 
with the legacy of the revolution a tragic montage of thousands of 
deaths by firing squad, the denial of medical care to political 
prisoners, and brutal actions against civilians. Added to this, of 
course, is the regime's culpability in the execution and premeditated 
murder of at least thirty American citizens. It is for these reasons 
that we stand with the people of Cuba and agree with President Bush 
that before our sanctions are lifted, prisoners of conscience must be 
freed, free speech, a free press and the right of association must be 
restored, and Cuba must commit to a path that leads to free and fair 
multiple party elections.
    The purpose of this hearing is to assess U.S. trade policy from an 
economic perspective. I would thus like to discuss our trade embargo 
and its impact on both Cuba and the United States, why Cuba under 
Castro is not an attractive trading partner and what the Cubans hope to 
accomplish with their current charm offensive. Finally, I would like to 
note what we can do to hasten the day when Cuba is again a full 
economic partner of the United States.

The U.S. Embargo Against Cuba
    Economic sanctions, when applied appropriately and conscientiously, 
remain an effective tool of foreign policy. Economic sanctions afford 
us the ability to fine-tune our response to the provocations of 
terrorist, criminal, and outlaw states in a firm, but non-military, 
manner. Sanctions do suffer from one major weakness, however, a 
persistent expectation that they, by themselves, can solve every 
problem--be it too high tariffs or the rampages of a bloodthirsty 
dictator. Such excessive expectations mask the very real successes 
sanctions have had over the years in denying resources to rogue states 
and forcing dictators to amend, adapt, or reform their ways.
    Like any Marxist economy, Cuba requires unearned external inputs to 
avoid a constant downward spiral. Unable to generate real economic 
growth, the regime desperately seeks foreign sources of funds to 
subsidize its inefficient system. For many years, the Cubans had the 
Soviets, who pumped money into Cuba at a rate of seven hundred thousand 
dollars ($700,000) an hour, twenty-four hours a day for almost two 
decades. When in the early 90's the Soviets were no longer willing or 
able to continue with this, Castro rejected Gorbachev's advice to adopt 
market reforms and instead inflicted a 35-60 percent reduction in the 
average Cuban's (not his own, of course) standard of living. This 
failure to reform had important results with respect to our national 
security. Cuba's military has shrunk from the largest in Latin America, 
with over 300,000 troops, to fewer than 50,000. More strikingly, Cuba's 
Navy and Air Force have all but ceased to be effective units except 
against tugboats full of children (Marzo 13) or unarmed Cessnas 
(Brothers to the Rescue). Cuba's ability to expand its biotech 
laboratories has been diminished, although the distress sale of 
advanced technology to other terrorist states is equally troubling. At 
the same time, Castro's ability to finance and support subversive 
groups throughout the hemisphere has been greatly restricted and the 
region has enjoyed an unprecedented decade of democratic reform.
    The embargo also does more--it creates pressure for democratic and 
economic reform. In 1993 Castro had no choice but to legalize the use 
of dollars and permit direct remittances from relatives in the U.S. in 
an attempt to capitalize on the concern of Cuban Americans for their 
starving relatives. In 1994 he authorized ``farmers markets'' that for 
the first time gave at least a limited amount of freedom to farmers to 
grow and sell crops. That same year he slashed the military budget, 
permitted ``self-employment'' in a restricted number of fields, relaxed 
the criteria for family visits, and even restored some selective 
religious freedoms. For an explanation as to why Castro did these 
things, you need only listen to his remarks. Castro told his rubber 
stamp National Assembly, ``We are forced to do things we would never 
otherwise do because of the economic necessities of the times''
    The record over the past forty years is clear. Castro reforms when 
he must, represses when he can. A unilateral lifting of our embargo 
would give him an undeserved respite, and lead--as it always has in the 
past--to more rather than fewer restrictions on the Cuban people.

Cuba as a Business Partner
    As a place to do business, Cuba consistently ranks at the very 
bottom of the list. Chad, Burma, and Turkmenistan are all more 
attractive places to invest. In fact, Cuba ranks 151st out of 154 
countries on this year's Index of Economic Freedom, somehow edging out 
the likes of Libya and Iraq. There are countries in the world poorer 
than Cuba, but no nation this side of North Korea works as hard to 
stifle individual initiative or to minimize the meaningful 
participation of its citizens in business activity. In Cuba, private 
property, the sanctity of contracts, free labor unions, and an 
independent judiciary are all alien concepts.
    Foreign corporations that want to do business in Cuba do so on 
Castro's terms--or not at all. This makes foreign investors complicit 
in a host of unsavory business practices. Independent labor and human 
rights' groups ranging from Amnesty International to the International 
Confederation of Free Trade Unions have documented these abuses 
exhaustively. Although Cuba has long been a signatory to key U.N. 
International Labor Organization (ILO) conventions, Castro's regime 
ignores practically all of them. Foreign businessmen and women are 
expected to not only comply with rules that deny Cuban workers their 
rights, but to inform on any worker who complains. Fortunately, 
international law is catching up with such predatory behavior. 
Corporations that choose to violate labor and human rights are trading 
short-term profits for a long-term liability. Aggrieved citizens across 
the globe are taking companies that collude with corrupt and 
dictatorial rulers to court--and they are winning. No longer can 
foreign corporations escape responsibility for their actions by 
claiming they were in compliance with local law, knowing full and well 
that such laws were in violation of international standards.
    Finally, Cuba is not, under Castro, a great market for the United 
States. Cuba ranks last in the hemisphere in GDP per capita, below even 
Haiti. Cuba is in default on practically every loan it has ever taken. 
Cuba is in default to Russia, to the European Union, to its Latin 
American neighbors, to South Africa, to the nations of Asia, and to 
two-thirds of the members of NAFTA. In fact, about the only country in 
the world without uncollectable debt is the United States. As the 
International Trade Commission reported last year, ``Cuba stopped 
payment of all its foreign commercial and bilateral official debt with 
non-socialist countries in 1986. Because U.S. financial institutions 
were prohibited from financial dealing with Cuba, there was no U.S. 
exposure to Cuba's foreign debt moratorium.'' Thanks to our embargo, 
the American taxpayer has not had to bail out any American business or 
bank shortsighted enough to ignore the record and take a risk on 
Castro.

Castro's Charm Offensive
    Castro is desperate for new sources of funding. Having run out of 
credit in Europe, Asia, Africa, Latin America and Canada, Castro has 
only the United States and Antarctica left as possible sources of new 
credit. Realizing that no penguin would be so gullible as to loan 
anything to a deadbeat of his magnitude, Castro has focused on his only 
remaining hope--us. Thus, we have seen what has come to be known as the 
``charm offensive.''
    This offensive has three parts. First, Castro did not formally 
oppose the placement of terrorists in Guantanamo--although Castro's 
Attorney General, Juan Escalona, did manage to publicly state that he 
``hoped the Taliban would escape and kill Americans'' before he got the 
new Party line. Second, Cuba has purchased American agricultural 
products. It is important to note that the money for these purchases 
reportedly comes from funds that were supposed to go to the Europeans 
and others for debt repayment. This is especially ironic, as all 
agricultural trade other than ours involves heavy subsidies, below 
market barter arrangements, concessionary financing, and/or debt 
forgiveness. Now, the pittance these nations expected in payment from 
Castro is denied them and being used to finance their replacement. 
Third, Castro has invited everyone he can think of to visit Cuba to 
take the usual guided tour of the regime's Potemkin Village facilities.

Current Policy
    We initially opposed the revision of the law a year and a half ago 
that permitted the sale of U.S. agricultural products to Cuba on a cash 
basis. We took this position because Castro has always used food as a 
means of control. The ration card, it is important to remember, came 
into mandatory use prior to the imposition of U.S. sanctions. When 
informed of this change in U.S. policy, Castro at first vowed he would 
not buy ``a single grain of rice.'' Some months ago, however, he 
reversed himself and is now purchasing a significant amount of U.S. 
agricultural products. And, because the law requires it, he pays cash 
for his purchases. There now is a proposal that this compromise--that 
has resulted in sales for farmers and protection for the taxpayer--be 
amended to permit the financing of sales. This would, in effect, move 
us from getting paid, to accepting Castro's promise to pay. I strongly 
urge that anyone advocating this change conduct a due diligence review 
of Cuba's past and current payment history before rushing to judgment.
    Moreover, the pattern of Cuba's agricultural purchases can be 
explained not so much by economics as by politics. Each purchase has 
been carefully designed by the regime to reward companies or 
individuals perceived to be sympathetic to Castro's desire to reach 
deep into America's pocket. In much the same way, regime officials 
often travel around the United States more for the purpose of 
propaganda than for business development. The U.S. should distinguish 
between Cuban technocrats, who may travel to perform necessary 
inspections, and Castro's agents, sent to sell us an unsavory bill of 
goods.

Humanitarian Assistance
    I would like to take a moment to discuss humanitarian assistance. 
The largest source of humanitarian aid to Cuba is the United States. 
Dade County alone probably provides more humanitarian assistance than 
the rest of the world put together. This is about Cubans in America 
helping Cubans in Cuba. This occurs because there is confidence the 
recipient of such assistance is an individual or family, not the Cuban 
regime. It not only helps people satisfy basic needs, but also empowers 
them to make economic decisions beyond the power of the state.
    The U.S. government licenses significant humanitarian assistance 
through NGOs and has even offered direct aid on an official level, most 
recently in response to Hurricane Michelle. The only requirement is 
that the aid reaches its intended recipients through the Churches and 
non-governmental organizations.

The Road Ahead
    Our embargo on Cuba is a policy tool, not a policy. It is a means 
to an end. At present our embargo successfully restricts the flow of 
resources to a recalcitrant regime and exerts constant pressure for 
reform. It is also a valuable bargaining chip for the day when Cuba 
chooses or is forced to accept real economic and political reform. 
Something for something has always been an integral part of our policy. 
Giving something for nothing, however, is rarely a good idea, either in 
agricultural sales or in foreign policy. Although some argue that 
engagement with a repressive regime can foster change, there is no 
empirical evidence that this has ever happened, in Cuba or elsewhere. 
Our Canadian, Latin, and European allies no longer even try to make 
this case.
    Embargos are, by definition, defensive in nature. To successfully 
empower the citizens of a nation to regain control over their own 
destiny, more is needed. We need to draw on our experience in Eastern 
Europe, South Africa, and elsewhere and support democracy proponents, 
human rights activists, independent journalists and economists, and 
budding entrepreneurs in Cuba. We are always better off trading with a 
prosperous democracy than with a bankrupt dictatorship. A free, 
independent Cuba that respects the rights of its citizens, and provides 
opportunities for private enterprise, is the partner we need. It is in 
our national interest, and in our common stake in humanity to not 
settle for anything less. Thank you.

    Senator Dorgan. Ambassador Hays, thank you very much.
    Next we will hear from Mr. Weber. Mr. Weber represents the 
Maryland Farm Bureau. Mr. Weber, please proceed.

  STATEMENT OF STEPHEN WEBER, PRESIDENT, MARYLAND FARM BUREAU

    Mr. Weber. Thank you, Mr. Chairman. Mr. Chairman, Senator 
Boxer, I'm a fruit and vegetable grower from Maryland. We 
appreciate the opportunity to testify on the important of U.S. 
trade policy with Cuba.
    Farm Bureau policy toward Cuba and unilateral sanctions in 
general is clear. We support immediate resumption of normal 
trading relations with Cuba. We believe all agricultural 
products should be exempt from all embargos and unilateral 
sanctions, except in the case of armed conflict. In short, we 
strongly agree that food should not be used as a weapon.
    U.S. trade policy toward Cuba has demonstrated that more 
than 40 years of isolationism has failed to produce democratic 
reform. Of all the countries against which U.S. unilateral 
sanctions have been imposed, our experience with Cuba stands 
out as proof that isolationism does not work.
    The most effective means of bringing about democratic 
reform is engagement. We support engagement with Cuba. Engaging 
Cuba through export of sales of U.S. food and medicines is 
necessary for humanitarian, economic, and foreign-policy 
reasons. Nothing could be more important in a humanitarian's 
perspective than providing the Cuban people with access to 
affordable, abundant, high-quality food.
    Export sales of U.S. foodstuffs to Cuba have enabled the 
Cuban government to cut its food cost on these imported items 
by 30 percent. Significantly reduced shipping costs and the 
ability of the Cuban government to forego expensive warehousing 
by buying only what it needs have resulted in lower overall 
food costs. These factors will enable the caloric intake of the 
Cuban people to rise, and the nutritional quality of the 
available food supply in Cuba to increase. We think that this 
is the policy that our country should continue to support and 
that efforts should be undertaken to further facilitate such 
sales.
    Economically speaking, American farmers should have the 
same access to Cuban markets as their foreign competitors. In 
today's global economy, shutting off the Cuban market to our 
exports simply means the competitors step in and make the 
sales.
    From a foreign-policy perspective, trade fosters 
engagement, engagement fosters democratic reform, and we 
believe that export--when we export food to a nation, we also 
export our values. Prior to the 1960 embargo, U.S. imports 
constituted 75 to 80 percent of the total Cuban foreign 
agriculture purchases. Cuba is a solid market for imports of 
meat products, dairy, powdered milk and eggs. Sales included 
corn, wheat, barley, and rice, fruits, and vegetables, 
soybeans, and soybean meal, and fish and fish products. The 
United States produces large quantities of each of these 
commodities and is located less than 100 miles from the Port of 
Havana. As economic growth accelerates in Cuba and living 
standards climb, U.S. agriculture exports could be expected to 
increase, as well. Since November 2001, the Cuban government, 
through its import company, Alimport, has pledged to purchase 
$73 million, or 453,000 metric tons, of agricultural products 
from the U.S. for cash.
    The majority of Americans and Members of Congress agree 
that it is time to reform U.S. policy toward Cuba. The best way 
to start is through trade. Among the first items to be reformed 
should be the current restrictions on financing of U.S. food 
and agricultural exports to Cuba. This prohibition increases 
the cost of overall export transactions, increases the 
difficulty of competing the export sales, and takes business 
away from the U.S. economy, and disadvantages smaller 
exporters. The prohibition must be repealed.
    On the issue of licensing, the procedure under which 
licenses for export sales to Cuba and other previously 
sanctioned countries are issued lack transparency and a 
systematic process for approval. Shortening the process to just 
1 day, where possible, is necessary in order for U.S. exporters 
to compete with their foreign counterparts. We were deeply 
disappointed last April when visa requests associated with 
planned meetings between U.S. agriculture representatives and 
Cuban officials were issued and then subsequently denied 
without just cause. Visits of this type are routinely conducted 
by U.S. officials and U.S. importers and markets that sell to 
the United States. It is also the practice for foreign 
purchasing agents and governments' technical teams to travel to 
the U.S. to meet with U.S. suppliers and tour our facilities.
    In conclusions, the Cuban market must remain open for 
export sales of U.S. food and agriculture commodities. 
Maintaining our current trade with Cuba and taking steps to 
lift the restrictions to trade that remain are needed in order 
to foster democratic reform. The United States has an 
unprecedented opportunity to promote its values throughout the 
world through engagement. Reaching out, not withdrawing behind 
sanctions or embargos is the best way to achieve this change.
    Thank you.
    [The prepared statement of Mr. Weber follows:]

  Prepared Statement of Stephen Weber, President, Maryland Farm Bureau

    Mr. Chairman, Ranking Member and Members of the Committee, I am 
Stephen Weber a fruit and vegetable grower from Maryland. The American 
Farm Bureau Federation (AFBF) appreciates the opportunity to testify on 
the important issue of the U.S. trade policy with Cuba.
    AFBF is the largest agricultural organization in the nation with 
over 5.1 million member families. Our producer members produce every 
commodity grown in the United States and Puerto Rico and rely on trade 
with other nations for more than 30 percent of their farm income.
    Farm Bureau policy toward Cuba and unilateral sanctions, in 
general, is clear: We support immediate resumption of normal trading 
relations with Cuba. We believe all agricultural products should be 
exempt from all embargoes and unilateral sanctions except in case of 
armed conflict. In short, food should not be used as a weapon.
    U.S. trade policy toward Cuba has demonstrated that more than forty 
years of isolationism has failed to produce democratic reform. Of all 
of the countries against which U.S. unilateral sanctions have been 
imposed, our experience with Cuba stands out as proof that isolationism 
does not work. The most effective means for bringing about democratic 
reform is engagement.
    We support engagement with Cuba. Engaging with Cuba, through export 
sales of U.S. food and medicine, are necessary for humanitarian, 
economic and foreign policy reasons. From the humanitarian perspective, 
nothing could be more important than providing the Cuban people with 
access to affordable, abundant, high quality food.
    Export sales of U.S. foodstuffs to Cuba have enabled the Cuban 
government to cut its food costs by thirty percent. Significantly 
reduced shipping costs and the ability of the Cuban government to 
forego expensive warehousing by buying only what it needs, have 
resulted in lower overall food costs. For some commodities like rice, 
the per ton cost for Cuba has been cut in half.
    U.S. food and agricultural export sales to Cuba result in cost 
reductions that enable the caloric intake of the Cuban population to 
rise and the nutritional quality of the available food supply in Cuba 
to increase. We think that is a policy that our country should continue 
to support and that efforts should be undertaken to further facilitate 
such sales.
    Economically speaking, American farmers should have equal access to 
the Cuban market as their foreign competitors. In today's global 
economy numerous countries compete for foreign agricultural export 
sales, shutting off the Cuban market to our exports simply means that 
our competitors step in and supply that market.
    U.S. agricultural export sales have remained flat since 1997 due to 
the Asian financial crisis and the continued high value of the dollar. 
Access to the Cuban market, valued at nearly $1 billion per year, is 
important to America's farmers. Market analysts estimate that the U.S. 
economy is losing up to $1.24 billion annually in agricultural exports 
because of the embargo against Cuba -and up to $3.6 billion more 
annually in related economic output. Why should American farmers forego 
export sales to Cuba when our competitors are allowed to supply that 
market?
    From a foreign policy perspective, trade fosters engagement and 
engagement fosters democratic reform. Face-to-face contact between 
American farmers and the Cuban people will yield positive results. When 
we export food to a nation, we also export our values.
    Allowing unrestricted travel to Cuba would further our nation's 
foreign policy goals with that country. Enabling Americans to visit 
freely with their Cuban counterparts promotes the American way of life 
and the freedoms that we cherish.
    In addition, more Americans traveling to Cuba would result in 
increased demand for high quality U.S. foodstuffs--fruits and 
vegetables, dairy products, meats and other consumer-oriented goods--
that the Cuban hotel industry needs to service its customers.

Agricultural Export Sales to Cuba
    Cuba imports around $4 billion in goods per year from countries 
other than the United States. Agricultural commodities constitute 20-25 
percent of this amount--approaching $1 billion in imports. Unfettered 
access to the Cuban market would benefit U.S. farmers and ranchers. 
Prior to the 1960's embargo, U.S. imports constituted 75-80 percent of 
total Cuban foreign agricultural purchases. Restoring trade with the 
United States would also help the Cuban people to increase their 
standard of living.
    Higher living standards around the world depend upon mutually 
beneficial trade. We encourage policies that promote rather than retard 
the growth of trade in Cuba.
    According to historical data from the United Nations Foreign 
Agricultural Organization, Cuba is a solid market for total imports of:

   meat products ($50-$60 million per year),
   dairy, powdered milk and eggs (up to $100 million),
   cereals including corn, wheat, barley and rice (over $300 
        million),
   fruits and vegetables (up to $75 million),
   other animal feed (over $60 million),
   soybeans/meal/oils (over $100 million) and,
   fish and fish products ($25 million).

    The United States produces large quantities of each of these 
commodities and is located less than 100 miles from the port of Havana. 
As economic growth accelerates in Cuba and living standards climb, U.S. 
agricultural exports could be expected to increase as well.
    Since November 2001, the Cuban government through its import 
company Alimport, has pledged to purchase $73 million--or 453 thousand 
metric tons--of agricultural products from the United States for cash. 
Delivery dates are now set through June 2002. The commodities pledged 
or purchased include: corn, rice, wheat, soybeans & products, poultry, 
vegetable oil, apples, peas, eggs and pork lard.
    The commodities contracted for sale to Cuba come from 25 U.S. 
states: Alabama, Arkansas, Georgia, Idaho, Illinois, Indiana, Iowa, 
Kansas, Kentucky, Louisiana, Maine, Massachusetts, Maryland, Minnesota, 
Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, 
Tennessee, Texas, Washington, West Virginia and Wisconsin. Cuba also is 
interested in Michigan dried beans. Most states will benefit as more 
items are sold (see below).

                              Economic Impacts of U.S. Agricultural Exports to Cuba

                                                                                ADDITIONAL POTENTIAL  ECONOMIC
        RANK                STATE           ANNUAL POTENTIAL  AGRICULTURAL         OUTPUT STEMMING FROM NEW
                                                        EXPORTS                      AGRICULTURAL EXPORTS

1                    Arkansas                                   $167,263,000                        $503,353,000
2                    California                                  $98,119,000                        $287,830,000
3                    Iowa                                        $70,634,000                        $206,012,000
4                    Louisiana                                   $65,634,000                        $187,037,000
5                    Texas                                       $53,857,000                        $162,501,000
6                    Illinois                                    $52,939,000                        $148,813,000
7                    Mississippi                                 $50,932,000                        $154,729,000
8                    Minnesota                                   $45,880,000                        $127,903,000
9                    Nebraska                                    $40,843,000                        $117,438,000
10                   Missouri                                    $39,826,000                        $116,280,000
11                   Kansas                                      $38,770,000                        $105,387,000
12                   North Dakota                                $37,771,000                         $96,213,000
13                   North Carolina                              $31,097,000                         $98,818,000
14                   Washington                                  $29,326,000                         $80,439,000
15                   Indiana                                     $29,139,000                         $82,109,000
16                   Georgia                                     $28,743,000                         $95,208,000
17                   Florida                                     $28,554,000                         $79,220,000
18                   South Dakota                                $25,998,000                         $73,386,000
19                   Ohio                                        $25,085,000                         $68,790,000
20                   Alabama                                     $22,382,000                         $74,699,000

Source: A report for the Cuba Policy Foundation by C. Parr Rosson and Flynn Adcock, Professors of Agricultural
  Economics at Texas A&M University, January 2002.

Reform is Needed
    The majority of Americans and members of Congress agree that it is 
time to reform U.S. policy toward Cuba. The best way to start is 
through trade. Among the first items to reform should be the current 
restriction on financing of U.S. food and agricultural exports to Cuba.
    U.S. law currently prohibits U.S. agricultural exporters wishing to 
export food and agricultural commodities to Cuba from using U.S. banks 
or financial institutions to execute the sale, other than to confirm or 
advise letters of credit that are issued by third country financial 
institutions. This prohibition increases the cost of the overall export 
transaction by adding additional banking fees; increases the difficulty 
of completing the export sale thereby making it more difficult to 
compete against foreign suppliers; takes business away from the U.S. 
economy and hands it over to international institutions; and 
disproportionately disadvantages smaller exporters who may not have 
international banking relationships.
    These third country financing restrictions placed on agricultural 
export sales prevent U.S. agricultural exporters from developing normal 
commercial relations with Cuba and are contrary to the spirit of the 
Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA). We 
support repeal of this provision of U.S. law.

Licensing of Export Sales to Cuba and other Previously Sanctioned 
        Nations
    Extreme delays have been experienced with the issuance of licenses 
authorizing agricultural export sales to Cuba and other previously 
sanctioned nations, including Libya, Iran and Sudan, under the 
implementing regulations for TSREEA. In some cases, up to 45 days 
elapsed before the requested license was issued.
    Such delays significantly impact our ability to transact commercial 
sales with these countries. In many cases, the export sale is lost to 
our competitors.
    The procedures under which these licenses are issued lack 
transparency and a systematic process for approval. In the short term, 
efforts should be undertaken to streamline the process to 24 hours or 
less in cases wherein licenses have previously been issued for sales to 
the same end users. Shortening the process to just one day, where 
possible, is necessary in order for U.S. exporters to compete with 
their foreign counterparts. Ultimately, legislation should be passed to 
repeal the licensing provisions now mandated under TSREEA.

Denial of visas
    In early April, visa requests authorizing the planned meetings 
between U.S. agricultural representatives and Cuban officials to review 
U.S. standards and procedures in conjunction with contracted and 
potential agricultural sales to Cuba were issued and subsequently 
denied without just cause. As a result, pending agricultural export 
sales to Cuba were put in jeopardy. Maintaining access to the Cuban 
market for our products is an important goal for U.S. agriculture.
    The purpose of the Cuban travel that was denied included important 
meetings for Cuban officials to confer with U.S. suppliers, inspect 
facilities, discuss sanitary and phytosanitary issues and verify U.S. 
procedures and standards associated with the sale of U.S. food and 
agricultural exports to Cuba. Visits of this type are routinely 
conducted by U.S. officials and U.S. importers in markets that sell to 
the United States. It is also customary practice for foreign purchasing 
agents and government technical teams to travel to the U.S. to meet 
with U.S. suppliers and tour facilities.
    Two years ago, Congress, backed by the strong support of the U.S. 
food and agricultural community, opened the Cuban market for our goods 
by partially lifting nearly 40 years of unilateral sanctions against 
Cuba. The denial of the visas associated with these commercial visits 
from Cuban officials was contrary to the spirit of that legislation.

Conclusion
    The Cuban market must remain open for export sales of U.S. food and 
agricultural commodities. American farmers and ranchers are under 
extreme economic stress from low prices and decreasing world market 
share. Access to this small but viable market provides a much-needed 
economic boost to many producers that are now experiencing financial 
stress.
    More importantly, maintaining our current trade with Cuba and 
taking steps to lift the restrictions to trade that remain, are needed 
in order to improve our bilateral relationship with Cuba and foster 
democratic reform.
    Unilateral sanctions, like the Cuban embargo, do not work. Such 
sanctions often result in little or no change in the foreign policy 
actions of the targeted nation. The experience in Cuba is a testament 
to this fact.
    The United States has an unprecedented opportunity to promote its 
values throughout the world through engagement. Reaching out, not 
withdrawing behind sanctions or embargoes, is the best way to achieve 
change.

    Senator Dorgan. Mr. Weber, thank you very much.
    Senator Boxer had to leave. There is a briefing with former 
President Jimmy Carter, as a matter of fact, on this subject, 
occurring in about 5 minutes, so she is going to that briefing.
    She asked that I put in the record for her, which I will do 
by consent, a statement today from 48 former United States 
senators, Republicans and Democrats, in which these 48 former 
U.S. senators sent an open letter to the President and Congress 
urging normalization of relations with Cuba. And I will, by 
consent, include this as a part of the record, at the request 
of Senator Boxer.
    [The information referred to follows:]

            AN OPEN LETTER REGARDING U.S. POLICY TOWARD CUBA

To President George W. Bush and his Administration and all members of 
the U.S. House and Senate:

    We are a bipartisan group of former U.S. Senators who believe that 
U.S. policy toward Cuba needs to change. Our present policy was created 
as a tool to topple the Castro government. Fidel Castro has now been in 
power 43 years--and we have had ten Presidents during that time. Our 
current policy has failed.
    We are the only nation in the world to have an economic embargo and 
boycott of Cuba, and the clear lesson of recent history is that if 
economic sanctions are to be successful, they must have strong 
international support.
    The reality is that the present policy retards the day when the 
Cuban people will enjoy fuller freedoms and hurts Americans and Cubans 
economically. Recent studies by Texas A&M and Rice University conclude 
that economic sanctions cost the American economy upwards of $6 billion 
in the agricultural and energy sectors alone.
    The United States recognizes and trades with several nations that 
have a human rights record worse than Cuba's. Recently, Secretary of 
State Colin Powell proposed lifting economic sanctions on Saddam 
Hussein's Iraq, while keeping sanctions on weapons. If that makes sense 
for Iraq, it certainly makes sense for Cuba where no other nation 
agrees with our policy.
    We favor normalizing relations with Cuba, while at the same time 
making clear our support for human rights. These minimal first steps 
should be taken:

   1. Lift the travel ban on U.S. visitors to Cuba. Unless 
        there is physical danger for American citizens, we should be 
        permitted to travel anywhere.

   2. Encourage academic exchanges and other exchanges, so that 
        we can learn as much about Cuba as possible, and they can learn 
        as much about us as possible.

   3. Lift the barriers to normal trade with Cuba, except for 
        trade that might have military significance

   4. Repeal laws that cause friction with other nations that 
        carry on normal relations with Cuba.

    We look forward to your response.
        Sincerely,

              James Abourezk (D-SD)
              Mark Andrews (R-ND)
              Lloyd Bensten (D-TX)
              Daniel Brewster (D-MD)
              Dale Bumpers (D-AR)
              Jocelyn Birch Burdick (D-ND)
              Marlow Cook (R-KY)
              John C. Culver (D-IA)
              Dennis DeConcini (D-AZ)
              David Durenberger (R-MN)
              Thomas Eagleton (D-MO)
              J. James Exon (D-NE)
              Sheila Frahm (R-KS)
              David H. Gambrell (D-GA)
              Jake Garn (R-UT)
              Rod Grams (R-MN)
              Mike Gravel (D-AK)
              Fred R. Harris (D-OK)
              Mark O. Hatfield (R-OR)
              William Hathaway (D-ME)
              Walter ``Dee'' Huddleston (D-KY)
              Roger Jepsen (R-IA)
              J. Bennett Johnston (D-LA)
              Robert Krueger (D-TX)
              Frank R. Lautenberg (D-NJ)
              Harlan Mathews (D-TN)
              Charles McC. Mathias (R-MD)
              Eugene McCarthy (D-MN)
              John Melcher (D-MT)
              Howard Metzenbaum (D-OH)
              Carol Moseley-Braun (D-IL)
              Frank E. Moss (D-UT)
              Gaylord Nelson (D-WI)
              Sam Nunn (D-GA)
              Charles Percy (R-IL)
              William Proxmire (D-WI)
              Donald Riegle, Jr. (D-MI)
              James R. Sasser (D-TN)
              Richard Schweiker (R-PA)
              Paul Simon (D-IL)
              Alan Simpson (R-WY)
              Robert Stafford (R-VT)
              Adlai E. Stevenson (D-IL)
              Donald W. Stewart (D-AL)
              Steve Symms (R-ID)
              Joseph D. Tydings (D-MD)
              Malcolm Wallop (R-WY)
              Lowell Weicker, Jr. (R-CT)

    Senator Dorgan. Ms. Weinmann, I hope I have not been 
mispronouncing your name.
    Ms. Weinmann. No, you're absolutely correct.
    Senator Dorgan. You are the executive director of Americans 
for Humanitarian Trade with Cuba. Why don't you proceed?

STATEMENT OF LISSA WEINMANN, EXECUTIVE DIRECTOR, AMERICANS FOR 
                  HUMANITARIAN TRADE WITH CUBA

    Ms. Weinmann. Thank you very much, and thank you for the 
opportunity to speak here today.
    Americans for Humanitarian Trade with Cuba is a national 
group of prominent Americans who advocate normal trade of food 
and medical products between the United States and Cuba. We 
know such trade would be mutually beneficial to both nations, 
and we believe our country has a moral obligation to allow the 
Cuban and American people to enjoy the healthy fruits of such 
trade.
    AHTC was established in January 1998 in response to a 
series of credible medical reports that showed a correlation 
between the food and medicine restrictions and health and well 
being in Cuba. But since that time, we've discovered that 
there's an equally as important impact here in the United 
States.
    In building AHTC, we tapped into a latent interest that 
really astounded us. We've grown to encompass 23 individual 
state councils comprised of members that are farmers, 
physicians, many Cuban-Americans, mayors, elected officials, 
and the like. The AHTC Advisory Council includes personalities 
such as David Rockefeller, former U.S. Trade Representative 
Carla Hills, President Reagan's former National Security 
Advisor Frank Carlucci, Paul Volcker, former Assistant 
Secretary of State, John Whitehead, former Surgeon General, 
Julius Richmond, Craig Fuller, who was the chief of staff for 
former Vice President Bush, is our co-chair, along with Sam 
Gibbons, who, as you probably know, was a 34-year 
representative from Tampa, Florida. So our group is really 
comprised of a broad cross-section of the U.S. public that we 
believe really speaks to the national support for change in 
policy.
    The situation we face is serious. According to numerous 
polls, the American people overwhelmingly support free trade in 
food and medicine products. According to numerous votes, the 
U.S. Senate and House of Representatives support free and 
unfettered sales. Yet, despite the support, numerous obstacles 
remain that make food and medical trade inaccessible to most 
Americans. And I think that's a very important point here.
    Yes, sales are occurring with some of the major companies. 
But for small to medium-sized buyers, the arcane regulations 
that govern such trade make it an impractical situation for 
them. Therefore, the regulations, et cetera, are unfair to the 
vast majority of Americans.
    TSRA, the Trade Sanctions Reform and Export Enhancement 
Act, was meant to end the practice of using food and medicine 
as tools in any U.S. unilateral embargo. Senator John Ashcroft 
of Missouri was a lead champion of ours on this issue, as you 
might recall, and the current allegations about Cuba as a 
terrorist state might be of some interest to him, because he 
had quite a vociferous policy about Cuba.
    But powerful leaders opposed to humanitarian sales added 
provisions that weakened the law's ability to move such trade. 
The number-one obstacle to such trade is continued presence on 
the U.S. State Department's list of terrorist states--Cuba's 
presence on that list. Cuba's unjustified presence on the list 
trivializes the list itself and trivializes the seriousness 
with which we all view the real terrorist threats that face us 
today.
    Clinging to this false concept is the primary way the 
Administration can exert its limited power over Cuba policy. 
And TSRA itself actually says that licenses will still be 
required for trade with any countries that are on that 
terrorist list, as of the year 2000. So even if the executive 
removed Cuba from this list, which we think they should do, 
there would still need to be an active law to allows such 
unfettered sales of--unlicenced sales of food and medicine, 
which we believe should occur.
    TSRA prohibited public and private financing for sales to 
Cuba. We believe that should be available. And the law did 
nothing to address Helms-Burton's ban on direct financial 
transactions between the United States and Cuba, which adds a 
lot of currency costs to companies seeking to do business. 
Nevertheless, the law was a step forward.
    We need to mention that the Administration's regulations 
regarding TSRA did nothing to loosen up the sales of medical 
products intended by the law. U.S. medical products companies 
interested in selling to Cuba still face the 1992 Cuban 
Democracy Act's unsurmountable licensing hurdles. Thwarting the 
two-way flow of life-saving medical products is an egregious 
situation that reflects poorly on the moral authority of the 
United States. AHTC holds that all restrictions on two-way 
medical trade should be immediately abolished. But it is the 
issue of food sales that has drawn the most interest. Despite 
the difficulties, we know such sales are occurring. U.S. firms 
have been patient but persistent, and the U.S. Department of 
Commerce has helped these companies.
    As I said, the chief problem really is the Administration's 
continued casting of Cuba as a terrorist state. As long as Cuba 
is on the list, as long as licensing is required, sales will be 
subject to the political winds that blow, and U.S. companies in 
Cuba will find it difficult to develop stable relationships, 
since the government can revoke a license at any time and 
really for any reasons, justifiable or not. There's no 
accountability there.
    Administration threats to examine the sales that have taken 
place so far to make sure that companies have not been 
subsidizing such sales are intimidating. A thousand things can 
impact a price at any particular moment. Our government 
shouldn't foolishly be wasting time delving into the price of 
goods, because obviously companies don't want to lose money 
making these sales.
    OFAC is required to issue travel licenses, and this is 
where a major problem has come up. The granting of licenses for 
travel is capricious. OFAC officials have an enforcement 
mentality and a predisposition to say no. OFAC--we don't blame 
them for this, as they're busy and should be dealing with more 
important issues. We understand that out of 60 full-time OFAC 
employees, 20 of them are busy working on the Cuba embargo. 
OFAC officials should be spending time tracking down al Qaeda, 
not railroads and shipping lines interested in creating jobs 
here in the United States by accessing a market that's 
ostensibly been opened to them by law.
    Another problem is the negative tone coming from the 
Department of State, and I guess we've heard a lot about that. 
But the denial of visas for Cuban officials coming clearly is 
an impediment to such trade, as well.
    All these problems with the law and the Administration's 
execution of it unfairly cutoff any potential for small 
companies and small farmers to do business with Cuba. For more 
than 40 years, the rest of the country has been paying the 
price for a policy that serves the narrow self interest of very 
few individuals. The Mississippi Delta and the whole Gulf Coast 
region has suffered irreparable damage from severing ties with 
Cuba, which, before the embargo, was the number-one export 
market for states like Louisiana, Alabama, and Mississippi. Our 
members in that region often ask how many family farms could 
have been sustained over the years if Cuba had remained open. 
They say it is time for those folks in Miami to get off their 
high horse and give the rest of the country a turn in the 
saddle. And it's time our government step aside and let them 
on.
    Thank you.
    [The prepared statement of Ms. Weinmann follows:]

Prepared Statement of Lissa Weinmann, Executive Director, Americans for 
                      Humanitarian Trade With CUBA

    Mr. Chairman, Ranking Member and Members of the Committee, I am 
Lissa Weinmann, Executive Director of Americans For Humanitarian Trade 
With Cuba (AHTC). AHTC is a national group of prominent Americans who 
advocate normal trade of food and medical products between the U.S. and 
Cuba. We know such trade would be mutually beneficial to both nations,. 
We also believe our country has a moral obligation to allow the Cuban 
and American people to enjoy the healthy fruits of such humanitarian 
trade. AHTC was established in January 1998 to take action in response 
to a series of important medical reports that showed the many ways the 
U.S. food and medicine embargo on Cuba undermines the health of 
ordinary Cubans. Since then, we've discovered that the embargo also 
hurts ordinary Americans.
    We tapped into a latent interest that astounded us. AHTC has grown 
to encompass 23 individual state councils, comprised of farmers, 
physicians, mayors and elected officials, Cuban Americans, religious 
leaders, ports and companies. The AHTC Advisory Council includes David 
Rockefeller, former U.S. Trade Representative Carla Hills, President 
Reagan's National Security Adviser Frank Carlucci, former U.S. Federal 
Reserve Chair Paul Volcker, former U.S. Surgeon General Julius 
Richmond, former assistant secretary of State John C. Whitehead, Miami 
Cuban American leader Silvia Wilhelm, Dwayne Andreas of Archer Daniels 
Midland, Peter Coors of Coors Brewing Company, Bob Edgar, a former U.S. 
Representative and current head of the National Council of Churches, 
Craig Fuller, former chief of staff for Vice President George Bush, Sam 
Gibbons, a 34-year representative from Tampa, Phil Baum for the 
National Jewish Congress, film director Francis Ford Coppola, Louisiana 
Commissioner of Agriculture Bob Odom and many other familiar names, all 
leaders representing the broad national support for change. We 
appreciate the opportunity to testify on the important issue of the 
U.S. trade policy with Cuba.
    I am going to be brief and blunt, because the situation we face is 
serious and deeply effects the very fiber of our democratic process. 
According to numerous polls, the American people overwhelmingly support 
free trade in food and medical products to Cuba. According to numerous 
votes, the U.S. Senate and House of Representatives support free and 
unfettered sales of food and medical products to Cuba. Despite the 
support, numerous obstacles remain that make food and medical trade 
with Cuba inaccessible to the public at large.
    The clamor for food sales to Cuba led to passage of an amendment to 
the 2000 Agricultural Appropriations Bill, since it is impossible to 
get a fair hearing, a fair vote, anywhere else.
    The law I referred to, TSRA, the Trade Sanctions Reform and Export 
Enhancement Act of 2000, was meant to end the practice of using food 
and medicine as tools in any U.S. unilateral embargo. A key champion of 
the law, then Senator John Ashcroft of Missouri (now U.S. Attorney 
General Ashcroft) explained why he supported humanitarian trade with 
Cuba at a World Policy Institute conference on the U.S. Economic Impact 
of Food and Medicine Embargoes: Case Study Cuba, held on June 15, 2000 
on Capitol Hill:

        ``We've seen the failures over and over again of the attempts 
        to withhold food and medicine as a means of shaping 
        international diplomatic relations and I think it's time for us 
        to understand that there is a better way. It's a way that 
        reflects the kindness and goodness of the American people. It 
        reflects our understanding that people should not be 
        malnourished nor should they be in ill health. It's a kind of 
        understanding that is very likely to make it possible to 
        disagree with other governments and yet to maintain our 
        reputation for what is the goodness of the American people and 
        our humanitarian spirit.''

    But powerful leaders opposed to such sales added provisions that 
weakened the law's ability to move such trade. The number one obstacle 
to free humanitarian trade with Cuba is that nation's continued 
presence on the U.S. State Departments' list of terrorist states. 
Cuba's unjustified presence on the list of terrorist states trivializes 
the list itself and trivializes the seriousness with which we all view 
the real terrorist threats our nation faces. Clinging to this false 
concept is the primary way the Administration--and other well-placed 
legislative allies of an anachronistic, shrinking and discredited Cuban 
American right--now exerts its limited power over Cuba policy.
    TSRA prohibited public and private financing for sales to Cuba., 
and as most of you know there is a determined effort now in the 
Congress to allow such private financing to occur. AHTC holds that 
private financing should be available for humanitarian sales, 
especially if a company itself wants to extend its own credit. Even if 
U.S. law changes to allow private financing, American companies and 
banks are going to be careful with Cuba. As one corporate 
representative told me, if American companies want to be stupid and 
lose money, that should be their right.
    The law did nothing to address the ban on direct financial 
transactions between the U.S. and Cuba, and myriad other small details 
that make selling to Cuba a full-time job for many a corporate 
attorney. Nevertheless, the law was a step forward in that it allowed 
for the opportunity to sell--under license, in fact under several 
licenses--U.S. produced goods to the Cuban government agencies that do 
the bulk of the buying in Cuba.
    It took the administration four months longer that the law itself 
mandated to issue regulations governing TSRA, the debate around them 
was so heated. Ultimately, the Administration interpreted the law 
narrowly, maintaining a troubling role for the Office of Foreign Assets 
Control and a lengthy inter-agency review of new licenses.
    It is important to highlight the fact that the Administration's 
regulations did nothing to loosen-up the sales of medical products 
intended by the law. U.S. medical products companies interested in 
selling to Cuba still face the 1992 Cuban Democracy Act's 
insurmountable licensing hurdles. The small to midsize medical 
companies most interested in such sales do not have the legal counsel 
necessary to overcome these hurdles, chief among them the end-use 
verification provision. The medical embargo continues to keep 
interesting Cuban products out of the U.S. market and the hands of 
American citizens who might benefit from them. Whether or not Cuba can 
afford high cost U.S. pharmaceuticals and equipment sidesteps the 
point. Thwarting the two-way flow of lifesaving medical products does 
nothing to advance U.S. interests. It is an egregious situation that 
reflects very poorly on the moral authority of the U.S. AHTC holds that 
all restrictions on two-way medical trade should be immediately 
abolished.
    But it is the issue of food sales that has drawn the most interest 
since the geographic proximity of the U.S. to Cuba makes us the natural 
source of foodstuffs for Cuba. Despite the difficulties, we are pleased 
that after more than 40 years, there has been more than $90 million in 
cash sales in just the past few months. Cuba has shown its clear 
intention to develop these relations, and companies report very 
favorably on the level of professionalism and goodwill they have 
encountered in working with their Cuban counterparts. U.S. firms have 
been patient but persistent in navigating through the approval process 
and we acknowledge the cooperative spirit under which officials in the 
U.S. Department of Commerce have helped these companies.
    The future of such commerce, amply supported as it is by all 
sectors of the American public and Congress, is not only thwarted by 
the limitations of the law itself, as I've pointed out, but imperiled 
by disturbing trends within the Administration which I will comment on 
now.
    The chief problem is the Administration's continued and unfair 
casting of Cuba as a terrorist state. As long as Cuba is on the 
Department of State's terrorist list, licenses will be required. As 
long as licensing is required, sales will be subject to the political 
winds that blow and U.S. companies and Cuba will find it difficult to 
develop stable relationships since the government can revoke a license 
at any time, and really for any reason, justifiable or not. There is no 
accountability there.
    Administration threats to examine the sales that have taken place 
so far to make sure that companies have not been `subsidizing' sales to 
the Cubans are intimidating. A thousand things can impact a price given 
at any particular moment. Price takes into consideration developing 
relationships, level of competition, the quantity of the sales, the 
need to move product, etc. Generally, customers that pay cash get a 
reduced rate. The bottom line is that what a company sells for is their 
own business. Our government shouldn't foolishly be wasting time and 
valuable manpower delving into something that's none of its business. 
It's obvious companies don't want to lose money.
    TSRA tightened restrictions on Americans' ability to travel to 
Cuba, and companies interested in humanitarian trade must seek a travel 
license each time they wish to go to Cuba. Companies report many 
problems with OFAC. OFAC must issue travel licenses in connection with 
sales. The fact is, there is no predictable roadmap to assess business 
potentials in Cuba. The granting of licenses for travel is capricious. 
OFAC officials have an enforcement mentality and a predisposition to 
say no. OFAC personnel do not return calls. And we don't blame them, 
they are busy and should be busy dealing with more important things. As 
Treasury Secretary O'Neill said sometime back, he wished he could 
redirect his personnel in more productive ways. We understand that out 
of 60 full time OFAC employees, 20 of them are busy working on the Cuba 
embargo. OFAC officials should be spending time tracking down Al Queda 
not railroads and shipping lines interested in creating jobs here in 
the U.S. by accessing a market that has ostensibly been opened to them 
by an act of law.
    Another problem is the negative tone coming from the Department of 
State, a tone clearly interpreted by companies as meant to dissuade 
such sales. State Department representatives say in closed meetings 
that travel is a privilege which our government grants to its citizens, 
not a right. And denials of visas for Cubans to come meet with their 
U.S. counterparts also tends to dampen interest in engaging in such 
sales.
    In a letter explaining why the head of Cuba's main importing 
company was denied a visa to visit business contacts in the U.S., 
Secretary of State Powell said: ``It is the Administration's judgment 
that marketing visits, such as that proposed for Mr. Alvarez, are not 
necessary to conclude purchases of U.S. agricultural commodities.'' 
With all due respect, we beg to differ.
    The ability to travel and communicate between buyer and seller is 
key to any successful trade. AHTC is concerned by the Administration's 
pledge to further restrict travel to Cuba This will have a serious 
negative impact on the necessary ability to travel to Cuba by 
representatives of the U.S. agricultural community and executives of 
companies which can legally conduct business with Cuba.
    As you know, Senator Dorgan, AHTC is a major sponsor of the second 
U.S. Agricultural Sales Conference planned for Havana in February, 
2003, and we are grateful for your support and pleased that you have 
agreed to attend if your schedule permits. The first such conference 
was held earlier this year in Cancun was organized by a number of U.S. 
State Farm Bureaus, Conway Data Co of Georgia, The GIC Group of 
Virginia, and Alamar Associates of Washington and brought more than 175 
representatives of the U.S. agricultural community together with their 
Cuban counterparts.
    AHTC, which has a license which permits us to authorize people to 
travel to Cuba for the purpose of assessing the trade potential in 
agricultural and medical products, plans to offer its license to permit 
these same people and others to travel to Cuba for the purpose of 
attending this important event to meet with the appropriate Cuban 
counterparts and to assess for themselves the potential for trade in 
agricultural products.
    Such communication and personal interaction is crucial if further 
sales of food and other humanitarian agricultural and medical products 
are to be sold to Cuba. But we are concerned that the Administration 
will find some way to block this lawful and useful effort.
    The Executive is supposed to execute the laws, not throw up 
roadblocks. There are obvious differences of opinion within the 
Administration, and despite the party line, there are conscientious 
individuals in each agency who try their best to obey the law, and a 
few who are blinded to their public responsibilities by a personal 
agenda of anger and hatred. Powerful individuals who thwart food and 
medical trade should be ashamed of themselves for impeding the law and 
imperiling lives.
    All these problems with the law and with the Administration's 
execution of it unfairly cut-off any potential for small companies, 
small farmers to do business with Cuba. That is unfortunate because 
Cuba could be a very meaningful market for many of these struggling 
outfits. They do not have or cannot afford the legal guidance necessary 
to navigate these processes. Some try to do it on their own, but get 
dissuaded by the red tape.
    For more than 40 years the rest of the country has been paying the 
price for a policy that serves the narrow self interest of very few 
individuals. The Mississippi Delta and the whole Gulf Coast region has 
suffered irreparable damage from severing ties with Cuba, which before 
the embargo was the number one export market for states like Louisiana, 
Alabama and Mississippi. The state of Texas passed a unanimous state 
resolution calling for complete lifting of the embargo as a matter of 
true economic need for companies, ports, and farmers in that state. The 
Gulf Coast Ports Association also passed a resolution calling for food 
and medical sales as a needed lifeline to help struggling ports.
    Our members in that region often ask how many family farms could 
have been sustained over the years if Cuba had remained open. They say 
it is time for those folks in Miami to get off their high horse and 
give the rest of the country a turn in the saddle. And it's time our 
government step aside and them on.
    Children and families in Cuba and in the United States could 
benefit so much from free and open commerce in food and medicines--a 
commerce without the handcuffs placed by policy makers driven by south 
Florida domestic politics. Our challenging international atmosphere 
requires American leaders to put personal interest and agendas aside. 
Only then can we courageously confront the counterproductive policies 
of the past and steer a brighter path for the next generation. AHTC 
urges the Congress to take all necessary steps to allow for free travel 
and the humanitarian trade that will foster between the U.S. and Cuba. 
Thank you.

    Senator Dorgan. Ms. Weinmann, thank you very much.
    Mr. Weber, do you view the revocation of visas, for 
example, for Mr. Alvarez and the officials from Alimport, a 
method of discouraging the sales of agricultural products from 
the U.S. to Cuba?
    Mr. Weber. We certainly do.
    Senator Dorgan. Is it customary that someone who's going to 
purchase products would like to visit with the seller and 
inspect facilities, et cetera? Can you describe that to us?
    Mr. Weber. Well, it is the way business is done. People 
don't buy things--especially when you're dealing across 
international lines, you don't buy things that you don't 
inspect. And we demand this. We need to see things before we 
buy them, and we would expect that people would want the same 
thing in return.
    Senator Dorgan. Ms. Weinmann, you indicated that here was a 
study that talked about the health and medical condition of the 
Cuban people relative to the situation with the food embargo. 
Can you amplify on that just for a moment, and then I would ask 
Ambassador Hays to respond to that.
    Ms. Weinmann. The American Association for World Health 
published a study in 1997, some 400-page study, detailing the 
difficulty that Cuban firms had accessing U.S. medical 
products. There was an article in The Lancet, which is the 
British medical journal, that came to the same conclusion. 
Numerous groups, such as the American College of Physicians, 
recognized the situation ad actually called for an end to the 
policy of thwarting medical sales. So there has been numerous 
physicians groups and reports on this matter and lots of 
different delegations of U.S. medical doctors that have gone 
down and spoken out when they came back.
    But, you know, the basic issue is not whether Cuba can 
afford to buy U.S. medical products, primarily pharmaceuticals, 
but whether they should have access to them if they can afford 
to buy them. And rules such as the 20-percent requirement--that 
any given piece of medical equipment, if it is more than 20-
percent U.S. origin, must be licensable--closes off a whole 
category of equipment to Cuba. And also the financing 
restrictions make it difficult, because obviously medical 
equipment and pharmaceutical sales are impacted by that 
restriction, as well. End-use verification for medical sales--
medical companies are actually held legally accountable for an 
end-use that they might not have any control over. The Small 
Medical Device Manufacturers Association has spoken out 
repeatedly about the problems in accessing the Cuban market, 
even under the licensing that the Administration holds should 
be allowing such sales to occur.
    Senator Dorgan. Ambassador Hays, have you ever farmed?
    Ambassador Hays. Not more than for half an hour or so, sir.
    [Laughter.]
    Ambassador Hays. That was plenty. It's hard work.
    Senator Dorgan. So the answer is no. If you were a farmer, 
do you think that you would feel differently about our 
policies, especially with respect to the use of food as a part 
of an embargo?
    Ambassador Hays. Sir, I----
    Senator Dorgan. And if you felt differently as a farmer, do 
you think that would be a selfish feeling?
    Ambassador Hays. Sir, I think if I were a farmer, and I 
worked as hard as I know they do, I would want to be able to 
sell my product and get paid for it, for one thing. I would not 
want to enter into an arrangement--if I saw that there was a 
buyer who had cheated, defrauded, and stolen 15 guys in front 
of me, and then he comes to me and says he wants to buy my 
product and he would like me to give him credit, I think I 
would be well within my rights to insist on some significant 
collateral before moving----
    Senator Dorgan. What if he said he wanted to pay cash?
    Ambassador Hays. Wanted to pay cash? Senator, you know, we 
opposed the change in the law, but we accept it. And we accept 
it because we believe that the safeguards, the provisions that 
are in there which prevent Castro from getting what we think he 
wants, which is unjustified credit along here--you know, 
listening in, I mean, I really wish, in Cuba--if we could all 
agree on a set of facts, I think it would be really useful, if 
we went back and had a common history, because there's so many 
things in here that need to be agreed upon, and then maybe some 
of the solutions would be a lot easier.
    You know, Cuba has always been able to purchase medicine 
from the United States. Single-source medicine was always able 
to be purchased. After the Cuban Democracy Act of 1992, it was 
also possible to purchase medicine much more freely. The fact 
that they don't, I think, comes down to what Fidel Castro has 
said, which is that our medicine tends to be too expensive for 
him, that you can buy it in Mexico or Brazil or Spain or 
someplace else for much cheaper.
    With respect to agricultural exports, pre-revolution, the 
United States did export the vast bulk of commodities to Cuba. 
We also bought the vast bulk of Cuba's sugar crop. We had----
    Senator Dorgan. If you might, just on that point----
    Ambassador Hays. Yes, sir.
    Senator Dorgan. Pre-revolution, we were then exporting food 
to a dictator?
    Ambassador Hays. Yes, sir. Yes, sir. We have this 
discussion. I--you know, I'm against dictators of left, right, 
top, down, and all kinds. I don't agree with our China policy. 
I think we're foolish in a lot of areas. And I don't believe in 
food as a weapon. And one of the reasons we're concerned with 
respect to Cuba is because food is used by a--is a weapon. It's 
used by a weapon by Fidel Castro. The ration card came into use 
prior to any part of our embargo. It was used as a way to 
control the population. It's still used as a way to control the 
population.
    Now, as I said, we oppose it, but we accepted the fact that 
American farmers--and like Ambassador Reich, I spent my 
diplomatic career working with American exporters. I believe in 
American exports. But our future and the future of American 
farmers is working with prosperous democracies that can pay the 
bill, not with bankrupt dictatorships.
    Senator Dorgan. Just to try to find the end of this thing, 
that logic would suggest that you would be in favor of using 
food as a part of an embargo with respect to Cuba, China, 
Vietnam, and other countries. Is that not the case?
    Ambassador Hays. I think that we have to look very 
carefully at what food is used for, who it's going to. Is it 
going to feed people, or is it being used as a method of 
control.
    Senator Dorgan. But I'm asking--traveling with your logic--
--
    Ambassador Hays. Yes, sir.
    Senator Dorgan.--is it not the case that, to be consistent, 
you would----
    Ambassador Hays. Yes, sir. To be consistent, if food is 
used as a weapon against the people in order to control them 
and to deny them their basic rights, then I'm opposed to that. 
Yes, sir.
    Senator Dorgan. And you believe that we should use food as 
a weapon--well, that we should use food as part of an embargo 
against all communist countries, don't you?
    Ambassador Hays. Sir, I said, if food is used as a weapon 
in order to inflict control, as a method of repression, then I, 
personally, am against it.
    Senator Dorgan. But the prelude to that--you set it up by 
saying that money's fungible, and to the extent that you 
produce food and send food, you give aid and comfort to a 
communist government. I'm--I think I understand where the end 
of that string goes with you.
    Ambassador Hays. OK.
    Senator Dorgan. And I appreciate your being candid about 
it. I mean, that really is a great chasm and a great divide 
here.
    Ambassador Hays. Yes, sir.
    Senator Dorgan. You believe that we ought to--we ought to 
withhold the shipment of food to communist countries.
    Ambassador Hays. I did not say that, sir.
    Senator Dorgan. Well, what did you say?
    Ambassador Hays. I said if a communist regime uses food to 
deny food to take the control of that food and to determine who 
gets fed and who does not get fed on a political basis in order 
to control a population, then I would be opposed to that. Yes, 
sir. If a government uses that food in a way that is not 
directly repressive, then I may have other concerns, but I 
would not take a categorical statement on----
    Senator Dorgan. So tell us, Ambassador Hayes, the Cubans 
have now purchased somewhere between $70 and $90 million of the 
food for cash from the U.S. farmers in the last months. How has 
that food been used in Cuba.
    Ambassador Hays. Well, we don't know. There's not a lot of 
ways to determine this, because Cuba doesn't allow independent 
observers--the Red Cross, Amnesty International, Human Rights 
Watch--to come in.
    Senator Dorgan. So what do you think? If you don't----
    Ambassador Hays. Senator, I'm in favor of working with the 
Cuban people. You know, the largest by far--Dade County alone 
gives more humanitarian aid than the rest of the world put 
together to Cuba. The Cuban-American community is the lifeline 
that keeps the Cuban people from starving to death. Cuba is a 
tropical island. I mean, you know, it's hard--you really have 
to work to not grow crops in Cuba, but this is something the 
Castro regime has succeeded in doing.
    Senator Dorgan. But what you just described is hard 
currency going into Cuba from the United States, didn't you?
    Ambassador Hays. Yes, sir.
    Senator Dorgan. It's very interesting for me, because it's 
hard for me to see a distinction between that amount of money 
that goes each month to support Cuban families in Cuba, coming 
from the United States, and food that is sold to a Cuban agency 
to distribute in Cuba. It's hard to see a distinction.
    Ambassador Hays. OK.
    Senator Dorgan. But I think I understand what you're 
saying, Ambassador Hayes, and I appreciate your being candid. I 
think you are the only one that I've heard that is consistent. 
You would not engage in the kind of trade our country is 
engaging in with China, for example.
    Ambassador Hays. I think we have some very shortsighted 
goals with respect to China, and I do not believe that you have 
no engagement, just like I do not believe that you have no 
engagement with Cuba, but I think you have to recognize who you 
are engaging with and what their goals are. I mean, in China, 
we have an $87 billion trade deficit. We have a military whose 
doctrine who calls for fighting a war with us. They're crushing 
Tibet. I mean, you know, someone, I hope, can explain to me why 
that's a good thing for the United States and the American 
people.
    Senator Dorgan. Well, you need to take that message to the 
State Department, then, because, of course, they disagree with 
you, as does President Bush.
    Ambassador Hays. I no longer work there.
    Senator Dorgan. Mr.--I understand that--Mr. Weber, reflect 
on what Ambassador Hays is saying. I think Ambassador Hays is 
saying that if you have a government that you don't like or a 
government that's repressive or a government that is engaged in 
human rights abuses, if you send food, somehow that gives aid 
and comfort to the government.
    Mr. Weber. Well----
    Senator Dorgan. How does the Farm Bureau feel about that? 
Are you--is this a case where you farm organization is just 
softheaded and pro-Castro?
    Mr. Weber. Well, I guess, like--you know, when you have a 
40-year history of something that hasn't been effective--you 
know, it's been very difficult for farmers to change our ways 
over the years and things we do on our farms. When you have a 
practice that hasn't worked for 40 years, it's time to stop it. 
We just don't see where there's been any effect at all.
    There's a lot of discussion that--I think we all agree that 
there ought to be a change in the Cuban government, or we'd all 
like to see something different there, with more rights for 
people, and I think people can talk about the need, but they 
sure can't talk about this thing has worked. It's just a failed 
policy.
    Senator Dorgan. Well, when our country says to another 
country, ``Look, all right, we're going to slap you around a 
bit. We don't like your--we don't like your government. And you 
know what we're going to do? We're going to prohibit you from 
getting food. We're going to say you can't buy our food.'' Is 
that a penalty or a punishment for the government, or does that 
hurt the people?
    Mr. Weber. It certainly hurts the people who are going to 
receive the food and the supply of food in that country that we 
are embargoing, and I certainly know what the effect was in the 
1970's when we embargoed Russia. It just took the sales out of 
a very strong U.S. agricultural market at that time.
    Senator Dorgan. Mr. Weber, is there any condition under 
which you can see that the sale of pork lard, chicken breasts, 
turkey drumsticks, or dried edible beans undermines the 
security of this country?
    Mr. Weber. I think in cases of war--if we were in an armed 
conflict, I think we would just say that--you know, obviously, 
you're not going to feed your enemy.
    Senator Dorgan. Just shut down pork lard and turkey breasts 
in the case of armed conflict. But I'm not talking about armed 
conflict now. I'm----
    Mr. Weber. Well, it's hard to see how agricultural products 
are going to be--you know, the old guns and butter thing--how 
are they going to turn butter into guns. I don't see it.
    Senator Dorgan. Ms. Weinmann?
    Ms. Weinmann. I'd just point out that even under the Geneva 
Convention, which, of course, the United States is a party to, 
food and medical products are not to be thwarted to any given 
civilian population, even in times of war. And the fact is--is 
that there was just a move last week to allow Iraq to import 
any goods it wants to from United States companies. There's a 
list of some, I understand, 300 products or so that will not be 
available for Iraq to import, but I think it's very 
inconsistent when we allow such sales and U.S. companies to 
engage with Iraq and not Cuba.
    Senator Dorgan. So it's--I understand that's a question 
that begs an answer, but it is not going to undermine our 
interests if we sell chicken livers to Cuba. Would you agree?
    Ms. Weinmann. I would agree that it certainly would advance 
our interests to do so.
    Senator Dorgan. Edible chicken innards? I guess it's hard 
for me to understand why someone would want to buy that, but 
it's on the list. Beef entrails, pork loins, deboned pork meat, 
precooked rice, cereal pellets, cereal gum, rice, sorghum, 
millet, barley, alfalfa, semi-milled oats, olive oil, castor 
seed oil, skinless back fat, you know, a rather lengthy list of 
the sales of agricultural products to Cuba.
    Now, I've been in a lot of poor countries around the world, 
and they all look pretty much the same, regrettably. I've been 
to a lot of refugee camps, and I've been to countries where 
there is desperate, gripping, relentless poverty, and you can't 
tell much about the government in most of those small villages 
where that poverty exists, but you can sure tell a lot about 
human misery, and I really feel strongly that the use of food, 
in any way, as part of our policy in this country to punish 
governments ends up hurting people who are poor, sick, and 
hungry, and I think it does precious little to ever affect the 
behavior of a foreign government.
    I know some of my colleagues seem to suggest that this 
entire discussion is about whether we support the Castro regime 
in Cuba. The answer--there is only one answer from this 
country, and that is no, we don't support the Castro regime. We 
want to bring democracy to Cuba. The question is, how best can 
we do that. And my own view is that engagement, especially with 
respect to the sale of food, makes great sense. And as--I agree 
with you, Mr. Weber, that at some point after 40 years or so, 
you ask the question, is this a policy that works? And if not, 
you ask a second question, what would work better?
    And I know, Ambassador Hays, you have testified in a 
previous hearing that I held on the subject of travel, and 
that's not the subject of this hearing, but you'll recall you 
sat at a witness table where, with respect to Cuba--we've 
people at OFAC, not as many as you suggest, Ms. Weinmann, there 
are fewer people at OFAC working on this, but there are people 
there full time today working on finding and punishing American 
citizens who traveled in Cuba. You sat, Ambassador Hays, next 
to someone who took his father's ashes back to Cuba because 
that was his father's last wish, and he was tracked by the 
Treasury Department.
    Ambassador Hays. And I don't support that in that case.
    Senator Dorgan. Right, good for you--and a retired school 
teacher from Illinois who road a bicycle in Cuba for 8 days 
responding to a Canadian cycling magazine advertisement for a 
cycling trip in Cuba. She did. And guess what our Department of 
the Treasury, OFAC, did to her? They sent her a bill, a civil 
fine. They said, ``You're fined $7,500 because a retired 
American school teacher cannot bicycle in Cuba.'' Our policies 
are counterproductive with respect to that.
    But coming especially to the focus of this discussion, the 
policies with respect to using food as a weapon are foolhardy. 
They hurt American producers and American family farmers who 
need access to those markets, No. 1. But, No. 2, and just as 
important, I believe those policies hurt, as I said, poor, 
sick, and hungry people in parts of the world, and that is not 
the best of American public policy.
    Ambassador Hays. Senator?
    Senator Dorgan. Yes?
    Ambassador Hays. If I could, sir. Again, there are several 
levels of this. As I mentioned earlier, the Cuban-American 
community, or the American community writ large, is, by far, 
the largest contributor of humanitarian aid to Cuba. There also 
are a large number of American NGO's who are licensed and 
deliver humanitarian aid to Cuba. The U.S. Government has 
offered, on several occasions, I believe, to provide 
humanitarian aid without cost to the Cuban people, most 
recently in the wake of the Hurricane Michelle. We also 
authorized--as, sir, you have clearly stated here, we have now 
authorized the sale of food to Cuba.
    So it seems to me that the remaining question is, simply, 
is the American farmer going to get paid? And I don't know that 
we have a disagreement. I don't know my colleague here doesn't 
want to get paid. I assume he does.
    Senator Dorgan. Well, that's not an issue in the hearing. 
The Cubans can only purchase for cash at this point.
    Ambassador Hays. Yes, sir.
    Senator Dorgan. In fact, they must do the transaction 
through a French bank. So there is no issue of credit. The 
Cubans----
    Ambassador Hays. OK, well, great.
    Senator Dorgan.--can only purchase food with cash purchases 
at this moment, so----
    Ambassador Hays. I believe you have an amendment, sir, that 
would perhaps change that or provide----
    Senator Dorgan. No, it would----
    Ambassador Hays. No?
    Senator Dorgan.--it would only allow them to conduct the 
transaction through an American bank. You have to have a bank 
to convert the currencies, but they now must do it through a 
European bank, which I think is rather Byzantine.
    Mr. Weber, I hope your organization will continue to be 
aggressive on these issues. And I appreciate the testimony of 
all three of you.
    This is an issue that will not go away. All of us want 
exactly the same thing. We want to bring more democracy--we 
want to bring democracy to Cuba, greater human rights to the 
Cuban people. And I just--my own strong feeling has been, for a 
long while, that, you know, it's one thing to shoot yourself in 
the foot. It's quite another thing to take aim before you do 
it. And with respect to the issue of using food as a weapon, 
that's exactly what this country has done for far too long.
    Let me, again, thank you for your testimony, and this 
hearing is now adjourned.
    [Whereupon, at 4:50 p.m., the hearing was adjourned.]

                            A P P E N D I X

Prepared Statement of Delvis Fernandez Levy, President, Cuban American 
                     Alliance Education Fund, Inc.

    Mr. Chairman, Senator Byron Dorgan, and distinguished Members of 
the Senate Committee on Commerce and Transportation thank you for the 
opportunity to present a statement by the Cuban American Alliance 
Education Fund (CAAEF) for your deliberations.
    CAAEF works within the dynamics of the U.S. Cuban Community in 
cooperation with more than 40 U.S. based organizations. We strive to 
put a human face on the ongoing hardships due to the lack of normal 
relations between the U.S. and Cuba and call for a reassessment of 
policies that are outside the best interests of the American people and 
carry undue harm on both Cubans and Americans. Our Council and Board 
members forge engagements that promote understanding and human 
compassion between the people of the Republic of Cuba and the United 
States of America.
    For us, Americans of Cuban descent, current policy is both a 
blessing and a curse. Although only 4 percent of the U.S. Latino 
community, we have reached unprecedented economic success and political 
representation in that community and in the U.S. in general. On the 
negative side, many elements in the policy encourage family divisions 
and create unbearable situations for both Cubans and Americans.
    Under the Cuban Adjustment Act, our privileges extend far beyond 
what is offered to other exiles or immigrants. Even in post 9/11 times, 
Cubans reaching U.S. soil, lacking documents or with false papers, have 
access to a work permit, welfare assistance, U.S. residency, and in due 
course full citizenship rights. These privileges stand in sharp 
contrast to the hardships endured by millions of Latin American 
immigrants; living lives outside legal protection and without political 
representation. In Hoffman v. NLRB, for example, the Supreme Court 
ruled that an undocumented immigrant has no right to back pay or salary 
compensation even if unjustifiably fired from work.
    But these privileges also have a sinister side. Once in the U.S., 
Cuban Americans are restricted to only one visit within a twelve-month 
period to deal with a family emergency in Cuba. We are also limited as 
to the amount of and the frequency with which money may be sent to 
family and loved ones on the island. Parents who abandon dependents in 
Cuba escape prosecution, but those who do assume parental 
responsibilities cannot claim income tax deductions generally afforded 
to other immigrants with dependents in their country of origin.
    Today, support for Cuba-policy is fueled more by the perks and turf 
protection granted to hardliners in the Cuban American enclave of Miami 
than by what is in the wider interests of all Americans. Federal funded 
Radio/TV Marti has been granted millions of dollars this year alone, 
money which is lavished through a patronage system to pro-embargo 
ideologues, despite the fact that TV Marti is not seen in Cuba and 
Radio Marti is ignored by 95 percent of the population. U.S. funds also 
rain on other groups in the Cuban American community, rewarded for the 
preservation Cold War rhetoric and policies still directed towards 
Cuba. These rewards foster dependency on Federal funded funds with 
ensuing corrupting effect on community life, making it unusually 
difficult for Cuban Americans to speak out against a policy that is in 
direct contradiction to American principles of free trade and travel.
    But despite the barriers, winds of change are now felt at the 
epicenter of pro-embargo support in Miami. Notwithstanding 
difficulties, 300 courageous Cuban Americans, last March 28th, together 
with U.S. representatives and former U.S. ambassadors met in Miami to 
present arguments that favor engagement policies between Cubans and 
Americans. This meeting presaged a new era in Cuban-American discourse, 
where reason gives way to passion and where citizen engagement is 
offered as an alternative to punishment and isolation.
    Americans, most of them from the Cuban American community in South 
Florida, in quiet defiance to the travel restrictions and threats of 
fines and jail terms, 150,000 according to estimates from Treasury, 
traveled to Cuba last year. Richard Newcomb, Director of the Office of 
Foreign Assets Control acknowledged at a Senate hearing last February 
that a third of these travelers are in violation of U.S. travel 
restrictions to Cuba.
    In Congress, both houses have voted in favor of permitting 
unfettered sales of food and medicine as well as extending private 
financing for sales to Cuba, but their votes were thwarted in back room 
as a loss to democracy and to the detriment of American farmers.
    Other Americans participate in earnest people-to-people engagement. 
Last year, nearly 200 colleges and universities sent students and 
professors to Cuba and over 100 Cuban academics participated in 
conferences. Furthermore, in city and state governments, calls abound 
for changes in policy. In California, Pennsylvania, Texas, and Illinois 
resolutions or sister-state relationships have been approved or are 
being discussed. More than twenty city-to-city relations have taken 
place since Mobile, Alabama back in 1993 signed a sister-city 
agreements with Havana; now these relationships span wide areas of the 
U.S. and reach the full length of Cuba.
    With regards to Cuba trade, for the first time in 42 years, Cuba is 
buying more than $70 million worth of U.S. farm products. However, this 
trade is severely restricted due to the travel ban along with the 
prohibition on private or public financing; also the trade is one-way, 
Cuba is not allowed to sell to the U.S.
    Cuba is a key potential market for U.S. exports of rice, chicken, 
feed grains, soybeans, wheat flour, herbicides, pesticides, farm 
machinery, etc. But this market is placed outside the reach of small to 
medium U.S. farmers due to current laws that limit travel and prohibit 
financing. According to a study in January by the Cuba Policy 
Foundation, the direct cost of the U.S. embargo to U.S. farmers in 
terms of lost trade is 1.24 billion dollars annually. Also as a result 
of trade restrictions, the International Trade Commission found that 
U.S. producers lose up to $1 billion a year in agricultural trade with 
Cuba.
    According to the head of the Cuban Interests Section in Washington, 
D.C., Dagoberto Rodriguez, the state of Minnesota alone could expect up 
to $130 million in trade with Cuba in the first year the embargo was 
lifted. The U.S. as a whole could anticipate as much as $3.9 billion in 
trade. Minnesota based Cargill in January shipped to Cuba about 25,000 
metric tons of yellow corn grown by Midwest farmers. It was the first 
of several shipments under a $35 million deal between Cuba, Cargill and 
other U.S. trading companies within a 3 month period. Today Foreign 
Investment in Cuba encompasses more than 400 companies from other 
nations investing more than $5 billion in joint ventures in Cuba.
    Cuba-policy must be reassessed in light of U.S. national interests 
and not on the financial interests of long-term policy beneficiaries. 
U.S. Foreign policy should be based on hard facts and not on 
fabrications of ideologues bent on deceiving Congress and the American 
public. A policy tool placed to exact misery and suffering also 
promotes hatred as well as damages U.S. credibility in its just fight 
against terrorism. It is time to listen to voices of reason and opt for 
respectful engagements based on cooperation for the security and well-
being of both Cubans and Americans.

                                  
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