The frog in the pot

The water is getting awfully warm for the frog splashing around in the pot and for the moment, the clueless amphibian is enjoying the warmth. The temperature will continue rising, however, and soon, before the frog has a chance to figure out what is happening, it will have become nothing more than a boiled French delicacy.

It is a sinister way to end a frog’s life, and an even more sinister way for the US Senate to deal with the trade sanctions imposed on Cuba’s dictatorial regime.

On Sunday our Senate added a provision to an unrelated piece of legislation that will allow the Cuban regime to pay for its American food purchases with a wire sent directly to a US bank while the goods are in transit. The old way was to have the regime pay before shipment through a “third-party” country, but our Senators say they want to make life a little easier for an oppressive regime.

Senate backs move to boost farm trade with Cuba

WASHINGTON (Reuters) – The Senate approved a provision on Sunday to facilitate cash sales of U.S. farm goods to Cuba, overturning restrictions by former President George W. Bush’s administration, a senator said.

“By allowing cash-based sales of our world-class U.S. goods to Cuba, we restore congressional intent and make it easier for American producers to export during a critical time for our economy,” Senate Finance Committee Chairman Max Baucus said.

The move follows efforts by President Barack Obama to improve relations with Communist-run Cuba. Obama says he wants to “recast” ties and has announced a slight relaxation of the five-decades old U.S. trade embargo on Havana.

The farm goods provision was added to legislation to fund dozens of federal agencies for the rest of the 2010 fiscal year, which ends September 30, 2010.

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Congress authorized cash sales of U.S. farm goods to Cuba in 2000 under the Trade Sanctions Reform and Export Enhancement Act. But the Bush administration issued rules in 2005 requiring Cuba to pay for the goods through third-country banks before the products left port.

Baucus, a Democrat from Montana, which has a significant farming sector, said the new provision would allow Cuban buyers to wire payments directly to the United States while the goods are in transit, as Congress intended in 2000.

Of course, all of this sounds harmless enough: the regime still has to pay cash before delivery and all they are doing is making the transaction easier. These changes are supposed to increase the amount of sales by American farmers to Cuba without violating any trade sanctions. But the reality is that these changes will make little difference to the regime and American farmers.

First of all, unless the Cuban regime is allowed to open an account in an American bank, they will still have to go through a third party to make any payments. Considering the fact that the regime is on OFAC’s Sanction List, I fail to see how they would be able to open an account in the US without being removed from said list.

Secondly, shipments of food leaving from the US to Cuba only take a few days to arrive, so changing the way payments are processed makes little, if any difference in the time it takes for the shipments to arrive on the island.

On the surface, these changes seem almost cosmetic since they are still requiring the dictatorship to pay cash for their purchases before delivery is made. Since the regime is begging for credit so they can add another sucker to their list of creditors, it does absolutely nothing to improve their ability to buy on credit.

Another fact that makes these changes seem pointless is that even though Castro, Inc. is required to go through a third-party to make payments, that is the norm in international transactions. With today’s technology, it does not, for instance, take any longer for a payment to go through a bank in Spain before coming to the US than it does for it to go directly. All financial institutions in the world use SWIFT communications for these transfers, and these transactions are instantaneous.

So why are these Senators so excited about these inconsequential changes and believe they will create a huge increase in sales to Cuba? Seems to me all they accomplished was to get the water in the pot just a little bit hotter.