An­tic­i­pated busi­ness growth with Cuba yet to ma­te­ri­al­ize

Post-Cas­tro cli­mate may still be cool to­ward West

USA TODAY Weekend Extra - - FRONT PAGE - Rick Jervis

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

“The re-emer­gence of the United States’ pres­ence in Cuba is, by def­i­ni­tion, dis­rup­tive and un­cer­tain.”

John Kavulich U.S.-Cuba Trade & Eco­nomic Coun­cil

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 York-based 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 Cuban 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 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.

His firm has put on hold ex­pan­sion plans un­til re­la­tions sta­bi­lize.

“If the U.S. door for right now is not as open, per­haps there are other doors with more ben­e­fits for them,” Brick­man said.

JACK GRU­BER/USA TO­DAY

Pres­i­dent Obama opened re­la­tions with Cuba dur­ing his ten­ure, but the United States main­tained an em­bargo re­strict­ing busi­ness, and Havana re­mained dis­trust­ful of cap­i­tal­ist ven­tures.

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