Cuba and U.S. officials to meet next week to deepen detente

By Sarah Marsh

HAVANA (Reuters) - Cuba and the United States will meet next week for a third round of talks on improving relations, Havana said on Thursday, adding that the two former Cold War foes were not yet negotiating their multibillion-dollar claims against one another.

A bilateral commission will meet next Monday in the Cuban capital to evaluate the progress made in putting their decades-old conflict behind them, and to identify new areas of cooperation, said Gustavo Machin, the deputy director for U.S. affairs in the Cuban foreign ministry.

"We will set the agenda for the rest for the year," Machin told a news conference.

"We are not yet negotiating the topic of claims even if there is a recognition on both sides that these exist."

Cuba and the U.S. reestablished diplomatic relations a year ago and have signed agreements on issues of common concern such as the environment, postal services and direct flights.

Many differences remain however. Machin reiterated Cuba's demands for the return of the Guantanamo naval base and lifting of the U.S. trade embargo.

Cuba complains that some of the policy changes the U.S. has carried out, such as relaxing currency restrictions against the island, have had little real impact given the persistent fear among U.S. institutions of risking government sanctions.

The White House said in March it would allow U.S. banks to process dollar transactions for Cuba as long as neither buyer nor seller were U.S. entities.

"Until now, no bank transactions have been carried out in U.S. currency," Machin said. "There is still a great fear."

Cuba has said it will only lift a 10 percent tax on cash dollars once it is clear U.S. banks are processing dollar transactions for the Communist-ruled island.

The issue of reparations is another sticky point. Late last year, Cuba and the U.S. outlined their respective claims, with the former demanding at least $121 billion in reparations for the U.S. trade embargo and other acts it describes as aggressions against the Caribbean country.

The Americans meanwhile are seeking upwards of $10 billion in compensation for nationalized properties.

The third bilateral commission will be led by Josefina Vidal, the Cuban Foreign Ministry's chief of U.S. affairs, and Kristie Kenney, counselor for the U.S. State Department.

(Additional Reporting by Nelson Acosta; Editing by James Dalgleish)