Congress agrees to limited trade with Cuba.

WASHINGTON -- After months of bitter debate, the US Congress approved a plan that would allow largely unrestricted commercial sales of food sales to Cuba -- the first since 1962. However, over the objections of supporters of an end to the embargo, the bill also codifies an existing ban on travel to Cuba.

The historic law, included in an $80 billion agricultural appropriations bill, would also allow agricultural sales to Iran, Libya, Sudan and North Korea -- countries that are now under US unilateral trade sanctions -- and would bar the president from imposing a ban on US sales of food and medicine in future sanctions packages.

Rep. George Nethercutt (R-WA) promoted the measure as "a major change of US policy."

The agreement was also hailed by the American Farm Bureau Federation and US agribusiness companies who say it will result in $6 billion to $7 billion in new exports, though only a small fraction of the total will be to Cuba.

However, it will be harder for American farmers to sell to Cuba than the other nations affected by the legislation.

Because Republican congressional leaders, especially House Whip Tom DeLay, (R-TX) Senate Majority Leader Trent Lott (R-MI) and Florida's Cuban-American lawmakers opposed any opening of trade to Cuba, the island was treated differently from the other nations.

Under the agreement, US banks could finance the sales to most other countries -- and, if the president deemed it in the national interest -- government loans and financing could also be used. But sales to Cuba would only be allowed on a cash-only basis or through third-country financing. US banks, however, would be allowed to handle foreign letters of credit and US insurers would be able to cover shipments of agricultural products to Cuba.

Nevertheless, Cuba's foreign ministry has reacted angrily to the proposal, saying it strengthened, rather than eased, the US "economic war" against Cuba. "Under these discriminating and humiliating conditions, Cuba will not realize any commercial transactions with the United States," a foreign ministry statement said.

Nethercutt, however, dismissed the Cuban statement. "They're going to buy products from us because it's a better product," he said.

John Kavulich of the U.S.-Cuba Trade and Economic Council, said the Cuba's objections were "not sustainable." He estimated that $ 25 million to $45 million of US sales could be expected this year. Archer Daniels Midland, a member of the council, has sought to make a large sale to the Cuban government for more than a year and has made a number of donations of food in an effort to establish close relations with the government.

Some Democrats who oppose the 40-year-old Cuba embargo criticized the measure on the travel ban. "It strengthens Castro's hand," complained Sen. Tom Harkin (DIA). "What he doesn't want is a flock of Americans to travel to Cuba."

Under the proposal, the president would be stripped of his authority to allow new categories of US citizens and resident to spend money on travel to Cuba. Under current law, 12 categories of travelers -- including academics, amateur athletes and Cuban Americans -- can obtain Treasury Department permission to spend money on travel to Cuba.

US businesspeople hoping to travel to Cuba to prepare for post-embargo opportunities, however, may now find it difficult to win Treasury Department approval of their visits -- unless they represent agricultural or health industry concerns. The Treasury Department had recently begun allowing companies that wanted to explore future opportunities to travel to Cuba.

The deal is similar to a House compromise crafted earlier this year by Nethercutt, DeLay and lawmakers Reps. Ileana Ros-Lehtinen and Lincoln Diaz-Balart, both Florida Republicans.

But to win support among Republican senators who sought broader opportunities for trade, some changes were made. The most significant was allowing private US financing of sales to Iran and permitting the president to allow government loans and credit guarantees of those sales if warranted.

Other sweeteners eliminated the ban on US insurers and allowed US banks to handle foreign loans for Cuba sales.

In addition, the definition of agricultural commodities was expanded in another section of the agricultural spending bill to include seeds and fertilizer, reportedly at the behest of Sen. Thad Cochran (RMI), head of the Senate agricultural appropriations subcommittee.

President Bill Clinton called the anti-sanctions legislation "a big mistake," but said he wanted to "reserve some room for judgment." Previously, White House officials had objected to the proposal's limitations on presidential authority.

A White House spokesman also expressed concerns about a measure in the bill intended to cut prescription drug prices. However, the latest comments from Clinton advisors indicate the president will sign the measure.