American businesses preparing to flood Cuba

American diplomats completed their first high-level meetings with their Cuban counterparts in Havana last week. Now come the suits.

A wave of U.S. business leaders are preparing to flood the island to explore new opportunities and to learn about a market that has been largely closed for 50 years.

As part of the deal between President Obama and Cuban President Raúl Castro to normalize relations, the two sides agreed to open new trade channels for farming equipment, construction materials and a wide variety of other resources for Cuba’s emerging private entrepreneurs.

That interest has been so intense that membership in the United States Agriculture Coalition for Cuba, a group of businesses that want to increase trade to the island, has doubled to 50 in the month following the announcement.

Paul Johnson, the coalition’s vice chairman, is organizing a trip to Cuba in March to learn about the country’s farms, and it was quickly booked up with 80 people.

“Americans in general have wanted to know more about Cuba for half a century,” said Johnson, a Chicago businessman who sells food products to Cuba. “Now they feel like history is being made, and they have an opportunity to go and see Cuba and bring 11 million Cubans into the global marketplace.”

That interest extends far beyond the agricultural sector.

New York Gov. Andrew Cuomo said during his State of the State address this month that he wants New York businesses to be among the first to establish new trade deals in Cuba. Local business groups and chambers of commerce are booking flights. And members of Congress from California to Kansas to Vermont are organizing trips to promote businesses in their home states.

“There are some business people who think, ‘We want to be the first ones on the block,’ ” said Tessie Aral, president of Miami-based ABC Charters, one of the few companies authorized to fly directly to Cuba. “They believe if they make the first contact and meet the players in Cuba, once things get sorted out, they’ll have the first opportunity to sell.”

Getting those details sorted out, however, will be complicated.

Obama and Castro announced the new relationship on Dec. 17, and less than a month later the U.S. Commerce and Treasury departments had published rules that lay out new trade opportunities for American businesses.

Sen. Debbie Stabenow, D-Mich., whose state could sell agricultural and lumber products, visited Cuba last week and met with officials from the Ministry of Agriculture.

“They were shocked at how fast things went,” she said. Cuba “is a country with a very slow, big bureaucracy, so they were taken aback by that.”

One of the biggest changes announced by Obama is the ability of American companies to help build up Cuba’s telecommunications infrastructure, from telephone lines to fiber-optic cables. Rep. Chris Van Hollen, D-Md., met with telecommunications officials in Havana last week, and he also said they were overwhelmed.

“It’s not clear what their bandwidth is right now for taking advantage of the new interest on the part of the Americans,” Van Hollen said. “They’re already trying to figure out how they’re going to deal with just the flood of U.S. (diplomatic) officials that are coming to Cuba, so they have to figure out how to deal with this heightened interest.”

Collin Laverty, whose Cuba Educational Travel company organizes trips to Cuba for Americans, said part of Cuba’s slowdown is intentional.

Castro implemented a series of economic reforms in recent years, such as allowing Cubans to work independently outside the state-run economy. But he has taken a slow, deliberate pace to ensure the process doesn’t move too quickly. Laverty thinks Cuba will do the same now.

“The Cubans are going to have to balance their hesitance to go too far and too fast with American businesses with the need for them to sign some deals to keep U.S. businesses interested,” Laverty said.

Both countries also need to put in place a series of changes that will make trade with the island easier. American businesses already sells some goods to Cuba — food, medicine and medical supplies — but the process is complicated.

Obama made several moves to ease the process, such as allowing Cuban banks to establish corresponding accounts in U.S. banks to speed up the transfer of money.

With diplomats still negotiating the basics of re-establishing relations between the two countries, those broader changes will probably take several months to finalize. That’s why Tomas Bilbao, executive director of the Washington-based Cuba Study Group, said the upcoming trips by American business leaders are just the start.

“We’re at the curiosity level,” he said. “If companies are smart, they’ll analyze the landscape, understand the political, cultural and social sensitivities of the area and then formulate entry points that not only position them to make money, but protect their future earnings.”

(From: USA TODAY)