Want to do business in Cuba? Not so fast
Post-Castro climate may still be cool toward West
Doing business with Cuba has been historically tricky, complicated by complex U.S. rules to untangle, lack of direct bank transactions and an often unreceptive Cuban government.
President Raúl Castro’s retirement next week — marking the first time in nearly 60 years Cuba will be ruled without a Castro — may not make much of a difference in the prospects for increased business between the USA and Cuba.
Policy changes under President Trump and a series of standoffs between Washington and Havana have made the process thornier than ever.
“The climate has certainly changed,” said Jay Brickman, vice president of Jacksonville-based Crowley Maritime, which transports shipping containers full of chicken from Florida to Cuba. “The optimism that was there has been dampened. People are investing less time to see how they could enter the Cuban market until they see where the relations are going.”
When the two Cold War foes announced warmer relations in December
2014, U.S. businesses hoped they could start doing business with Cuba, just
90 miles away. Policy changes under President Obama encouraged Americans to travel to the island and seek out business opportunities. But Obama’s changes didn’t go far enough to undo restrictions under a U.S. embargo against Cuba, provisions in place since 1960 that severely restrict doing business with the communist island, said John Kavulich, president of the U.S.-Cuba Trade & Economic Council, a New Yorkbased non-partisan business group.
On the flip side, the Cuban government resisted opening Cuba too much to private enterprise, he said. In August, it placed a temporary halt on new licenses for bed-and-breakfasts, restaurants and other privately owned businesses. Last year, it balked at an offer by Google to expand Internet across the island through Wi-Fi and cellphones.
“They’re skeptical,” Kavulich said. “The re-emergence of the United States’ presence in Cuba is, by definition, disruptive and uncertain.”
Trump has unraveled some of Obama’s historic changes, barring Americans from providing money to Cuban businesses run by the military and doing away with “people-to-people” visas that thousands of Americans used to travel to Cuba.
Last year, relations took a sharp turn for the worse when U.S. officials accused Cuba of “sonic attacks” on U.S. diplomats on the island. In September, the State Department issued a travel advisory warning Americans not to travel to Cuba in lieu of the mysterious attacks. It downgraded the notice four months later.
In February, a task force ordered by Trump announced it was brainstorming ways to expand Internet access and improve access to information on the island, despite a formal protest by the Cu-
“The re-emergence of the United States’ presence in Cuba is, by definition, disruptive and uncertain.” John Kavulich U.S.-Cuba Trade & Economic Council
ban government, which viewed the move as an attack on Cuban sovereignty.
All this has had a chilling effect on U.S. travel to Cuba and business prospects between U.S. and Cuban companies, said Richard Feinberg, a senior fellow at the Brookings Institution and author of Open for Business: Building the New Cuban Economy.
“The hopeful scenario was that with the Castro brothers either gone or in the background, some of the bile in U.S.- Cuba relations will have been drained,” he said. “But I don’t see any interest in improving U.S.-Cuba relations in the short term.”
Brickman, the shipping executive, said he hears the concerns from his Cuban counterparts when he travels to the island on business.
Cuban officials and business leaders want to know how the Trump administration will affect long-term relations with the island.
The developments haven’t hurt his business, but his firm, like others, has put on hold expansion plans in Cuba until relations stabilize, Brickman said.
As the economy of Cuban ally Venezuela is in free fall and prospects for improved relations with the United States dim, Cuba will look to other countries, such as Iran and China, for help, he said.
“If the U.S. door for right now is not as open, perhaps there are other doors with more benefits for them,” Brickman said.