November 10, 2005

Cuba trade dispute snags talks on US transport bill

WASHINGTON (Reuters) - Final negotiations between the
Senate and U.S. House of Representatives on a bill to fund the
Transportation and Treasury Departments snagged on Thursday
over food sales to Cuba.

Rep. Joseph Knollenberg, a Michigan Republican and chairman
of the House transportation appropriations subcommittee, said
the Cuba provision and language on business reforms for the
national passenger rail service, Amtrak, were the only
outstanding issues in $141 billion legislation.

The disagreement over Amtrak -- whose president, David
Gunn, was fired on Wednesday in a dispute over plans to
restructure the railroad -- is likely to be resolved quickly.
Gunn was at odds with the Bush administration and Amtrak's
board and accused them of wanting to bankrupt the railroad.

Amtrak is slated to receive more than $1.3 billion this
fiscal year.

Knollenberg had hoped to wrap up negotiations on the
massive bill on Thursday. And with lawmakers out of town for
the Veterans Day holiday on Friday no agreement was expected
before next week.

Both houses passed measures this year to overturn a
Treasury Department ruling that U.S. farm and trade groups say
has slashed agricultural exports to Cuba by making it more
difficult for the Communist-ruled nation to pay for shipments.

Congress authorized food sales to Cuba in 2000 if Havana
paid in cash, an exception to the four-decade-old U.S. trade
embargo. But a Treasury Department rule issued in February
requires Cuba to pay for American goods before they leave a
U.S. port.

Farm sales to Cuba have slipped. Sales were $261 million
between January and September this year compared with $392
million for 2004, according to tracking by the U.S.-Cuba Trade
and Economic Council.

House members of the transportation conference committee
voted overwhelmingly to maintain the rule, while Senate
counterparts voted to drop it. The split created deadlock and a
new round of closed-door talks.

Knollenberg stressed the White House had made it clear
President George W. Bush would veto the bill if the pre-payment
provision for Cuba was overturned. Senate lawmakers were firm,
with Democrats saying Bush has yet to veto a bill and was
unlikely to derail the spending plan over one provision.