RACE IS ON FOR U.S. CEOS TO GET FOOT IN CUBA NOW
Expanded relationship envisioned by Obama faces resistance from GOP presidential candidates — and Cubans themselves
When he makes his historic visit to Cuba next week, President Obama will try to kickstart a business relationship that has yet to flourish despite intense administration efforts.
Obama will arrive with a delegation that includes the CEOs of Xerox and Marriott International to help nudge along deals in the works. U.S. airlines are set to resume commercial flights to Cuba this summer, a New York-based research facility is working with Cuban researchers on a lung cancer vaccine, and an Alabamabased tractor company has won approval to build a factory near Havana. Hotel chains Marriott and Starwood could announce their own deals during the president’s trip, according to a report in The Wall Street Journal. And AT&T could join Sprint and Verizon in providing roaming services on the island.
Cementing as many of those deals now is key, given Congress’ current refusal to lift the trade embargo against Cuba and Republican presidential candidates’ opposition to Obama’s opening with the Cuban government, said Ralph Patino, who is nearing a deal with the Cuban government to open a building products and supply store outside Havana.
“Once these companies are embedded, it will be very difficult to roll back come another administration,” said Patino, a Cuban American and Miami attorney.
Despite those advances, the expanded business relationship envisioned by the Obama administration remains far from becoming fully realized because of resistance from Cuba.
One reason is a long-held suspicion of dealing with a country that has imposed an embargo for more than five decades. Michael Sherwin, CEO of the Columbiana (Ohio) Boiler Co., visited the island last month to explore selling containers his company manufactures to transport chlorine for water treatment plants. Sherwin said the Cubans were welcoming but guarded.
“I don’t know if (the U.S.) is going to be their first choice on everything because we’re the ones who closed the door and threw away the key to the lock,” Sherwin said. “The door has been opened, what, an inch?”
Other countries have rushed to Cuba following Obama’s December 2014 announcement, including French President François Hollande, the foreign minister of Japan and a group of Russian senators.
“Everything in Cuba all of a sudden has become much more valuable,” said Jose Fernandez, a lawyer and former assistant secretary for economic, energy and business affairs at the State Department.
Meanwhile, U.S. companies struggle to figure out what they can do legally in Cuba. The embargo bans most trade and travel. Some products can only be sold to Cuba’s entrepreneurial class, while some can be sold directly to the government so long as it benefits the public good.