Gustavo Machin finds it hard to understand why the United States government refuses to acknowledge, communicate or trade with a neighbor that could offer a sizeable market for technology, hardware and food.

Or perhaps he does understand. It's just politics. But politics that makes little economic sense and stands contrary to trade policies with other nations with which the United States has equally serious issues.

“Cuba poses no threat to the United States,” Machin said recently in San Antonio at a symposium on the Free Trade Area of the Americas.

Machin, first secretary for Cuban Affairs to the Swiss Embassy, expressed disappointment that attempts to normalize relations between the two countries in the 1970s and 1990s have failed.

“The Cuban differences with the United States are the same differences Cuba has with other nations but with whom we have normal relations.

“Why China and not Cuba?” Machin asked. “I see a billion reasons,” he added, referring to the huge market and economic impact trade with China offers for United States agriculture and other industries. He also acknowledged that the strong resentment of the Cuban community in Florida provides a huge political roadblock to normal relations.

He sees the issue from a partisan perspective. “I was born in Cuba. I lived there all my life (until he moved to Washington five years ago as part of the Swiss delegation). Cuba is my home and I love my country.”

He admits he was “afraid to come to the United States. I feared American hostility,” he said. “That has not been the case. Outside the Beltway (in Washington) the people are very open and willing to listen.”

Machin says trade between Cuba and the United States, politics aside, makes a lot of economic sense for both countries.

“In 1958, the Cuban population was half what it is today and 80 percent of our agricultural trade was with the United States,” Machin said.

Much has changed since then. Fidel Castro's rise to power, a political sea change to communism and intimate ties with the Soviet Union prompted the United States to sever all diplomatic ties with Cuba and to impose severe trade and travel sanctions. The 1960s missile crisis further alienated the former trading partners.

The United State strengthened those restrictions in the 1980s and the 1990s, Machin says, although both President Carter, in 1977, and President Clinton in the late 1990s tried to normalize relations with Cuba. “Legislation in 2000 allowed limited sales,” Machin said. “But the Cuban position at that time was ‘we're not in a position to buy.’”

Cuban trade offers tremendous opportunities for the United States, he says, but the Cuban people may be the ones to benefit most.

“We will never be able to produce enough food to feed the population,” Machin says. “Now we have to pay cash to the United States to get agricultural goods.”

That, he says, poses a severe restriction on Cuba's ability to buy in an extremely poor economy and with agricultural and industrial infrastructures that are deteriorating rapidly since Russia no longer provides substantial support. Other countries get payment terms. Cuba is cash only for U.S. trade.

“We have to go to banks in other countries to get loans and then buy from the United States,” he explained. “That adds significantly to the cost.”

Buying from distant lands also adds to the cost of food, Machin said. “We pay $36 to $38 per metric ton for rice from the Far East and it takes a long time to ship. We could buy rice through ports at Galveston or Mississippi and save money and have the goods in two or three days.”

He said the United States offered aid to Cuba last fall following Hurricane Michelle. “We opted to buy because aid came with too many conditions.”

Machin said if trade and travel restrictions disappeared, Cuba would become a significant market for U.S. farm goods.

“Within one or two years Cuba would buy at least half of its $1 billion import needs from the United States, much of that value-added goods. We want to bring in new products, chicken breasts, wheat flour, barley, alfalfa, hot dogs, etc. We want to work closely with U.S. companies and with U.S. farmers.”

Tourism represents a significant economic opportunity for Cuba. “We have 11 million people in the country who consume $1 billion a year in agricultural products,” Machin says. “With the tourist sector expanding, we will increase from 1.8 million visitors a year in 2001 to as many as 5 million in 2005. That's an extra 3 (million) or 4 million to feed.”

Some industries already trade with Cuba but often through third parties. Machin says U.S. farm organizations have worked hard to find ways to improve trade relations. “The American farm community has done a lot to open markets with Cuba. They deserve at least a gesture for their efforts.”

He's not optimistic.

“The Bush administration is committed to limiting trade potential with Cuba. A proposal in the farm bill, Section 335, would have allowed the sale of food to Cuba by individual farmers. The proposal was killed in committee.”

Machin said Cuba and the United States should be good neighbors and work on common interests. “We were among the first to respond after the 9/11 tragedy,” he said. “We offered our airports for emergency landings as well as other ways to help.

“There is no justification to keep embargoes on Cuba. We want to trade with the United States. We want to live like neighbors.”

rsmith@primediabusiness.com