Cuba may not want American business

Cuba may not want American business
Tribune Staff Published: December 22, 2015

TAMPA — Whether people in the Tampa area should do business with Cuba
has been hotly debated since relations between the U.S. and the island
nation began to thaw a year ago.

Willing businessmen believe it is the best way to build Tampa's economy
while enabling the impoverished citizens of Cuba to profit from new
private sector opportunities.

Those opposed to the normalization of relations with Cuba say doing
business only serves to prop up an oppressive regime that controls an
economy stained by the blood of innocents.

There could be a third position in this debate, though: Cuba might not
want our business.

Diplomatic relations have been restored between the two nations for the
first time in over five decades and interaction is replacing isolation.

So why are Cuba's purchases of U.S. agricultural products on pace to be
the fewest since 2002 — the second year such trade was allowed for
American citizens under U.S. law.

And why, a year after President Barack Obama announced his Cuba
initiative, hasn't Cuba made a single deal with U.S. companies to buy
construction supplies and agricultural machinery now available?

There may be several reasons.

For one, the U.S. still refuses to allow its businesses to sell
agricultural products to Cuba on credit. Also, the way the two nations
can do business with one another under existing laws are not always
compatible.

Or Cuba might not want to help businessmen from a nation that has long
viewed it as an enemy.

Cuba may prefer to move at a slower pace in order to ensure their
socialist system can handle more capitalism.

It's also possible the island nation's government is skeptical of
American intentions after a history of covert and overt efforts to
depose the Castro regime.

"They don't trust the U.S. government," said John Kavulich, president of
New York-based U.S.-Cuba Trade and Economic Council. "They don't trust
the U.S. business community. That envelopes every decision they consider
with respect to the U.S."

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Since Obama announced his initiative Dec.17, 2014, he has said he wanted
to bring about the positive change in the island nation's government
that a long-standing policy of isolation had failed to do.

In a recent news conference about the one-year anniversary of the
president's announcement, Jeffrey DeLaurentis, current charge d'affaires
of the Embassy of the United States in Havana, echoed that sentiment.

"Our aspiration for the Cuban people remains that they enjoy a peaceful,
prosperous and democratic society," DeLaurentis said.

The word "democratic" may be cooling Cuban interest in doing business
with America, said Albert Fox Jr., founder of the Tampa-based Alliance
for Responsible Cuba Policy Foundation and a part of over 100
delegations to Cuba.

Fox was quick to note that he does not support Communism and considers
the U.S. brand of democracy the greatest form of government in "the
history of the world."

Still, Fox said, the U.S. government is unwise to advocate for
capitalism over communism then question why Cuba will not engage in more
capitalism with American businessmen.

"The Cuban government wakes up every day wondering if today is the day
the United States with a wink and nod will try to do something," he
said. "Whether that is a realistic opinion does not matter. It is an
opinion."

Among U.S. attempts at regime change was the failed Bay of Pigs military
action against Cuba in 1961. Since then, the U.S. government has planned
a number of covert methods to overthrow Cuba's communist government.

The British documentary "638 Ways to Kill Castro," released in 2006,
described assassination plots on Fidel Castro including poisonous pens,
exploding cigars, and bacterial poisons in his coffee or tea.

In more recent years, the U.S. Agency for International Development, the
nation's provider of humanitarian foreign aid, created a social
networking platform in Cuba to covertly spread propaganda aimed at
inciting an uprising.

USAID also used HIV prevention seminars to recruit Cuban youth as
opposition leaders and attempted to foster an anti-government Cuban
hip-hop network.

"You can see why Cuba may be reluctant to purchase items like
telecommunications devices from the U.S.," Fox said.

Such technology may now be sold to Cuba through a 2015 presidential order.

"Whether true or not, they have to at least wonder if it will be used so
U.S. intelligence can eavesdrop. Why buy anything from a country they
can't trust?"

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According to Kavulich's U.S.-Cuba Trade and Economic Council, Cuba has
bought $160 million in agricultural food through October this year.
That's lower than any year since 2001, the first year the sales were
allowed, when the total was $4.3 million.

They hit $138 million in 2002 and grew each year through 2008, peaking
at $710 million, then declined ever since.

Allowing sales on credit might help, Kavulich said, but even then, U.S.
companies are unlikely to compete effectively on terms with trade
partners from other Communist nations. Vietnam, for instance, allows up
to two years for repayment.

Fox, of the Tampa-based alliance, has another theory: The purchases
peaked when the Cuban government believed it was buying political clout
with American businessmen, who would lobby government leaders to lift
the travel and trade embargo.

"Instead, many of these Americans would say, 'This is about business not
politics,' " Fox said. "When Cuba realized these American businessmen
had little interest in helping to bring about policy change, they took
their business elsewhere, to those countries that are willing to work
with their current form of government rather than against it."

What Cuba wants before it completely opens to American businessmen, Fox
said, is a wholesale lifting of the embargo.

Only Congress can do that, though Obama has whittled away at it through
executive orders.

With an election cycle underway, it may not be wise to wager on Congress
acting soon, said John Gronbeck-Tedesco, an American studies professor
at Ramapo College in New Jersey and author of "Cuba, the United States,
and Cultures of the Transnational Left."

"That is the question — when will Congress take up that matter," said
Gronbeck-Tedesco. "Will Congress even make it an issue to be discussed
during an election year? The president can only do so much."

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Among Obama's other executive orders in 2015 was one permitting American
companies such as distribution warehouses to locate in Cuba.

Yet, the U.S. and Cuba have yet to enter into such ventures, largely due
to U.S. laws that conflict.

The U.S. government says items from a 2015 expanded list of allowable
imports to Cuba can only be sold directly to privately owned Cuban
business. But Cuba does not allow its citizens to purchase goods
directly from another nation. Instead, the Cuban government must serve
as the distribution outlet.

A middle ground, suggests Kavulich, may be for the U.S. to allow sales
to state-run stores in Cuba that are only accessible to privately owned
businesses. Otherwise, American and Cuban entrepreneurs may continue to
be frustrated by the lack of opportunities.

"This past year has not really satisfied the expectations of many who
were pro-normalization," Gronbeck-Tedesco said. "The Obama
administration has taken steps to drive a path toward normalization
through high profile exchanges that have opened doors for trade,
commerce and environmental work. But there is still more that needs to
be done."

Further loosening business restrictions would prove divisive for Obama,
Kavulich said.

After all, Cuba has not made the positive strides in human rights some
had hoped it would. Cuban law enforcement, for example, continues to
arrest political dissidents in an attempt to stifle freedom of speech —
a practice condemned by Obama and others who favor of normalization.

So it now becomes a staring contest, Kavulich said, to see who will
blink first. And he cannot envision that being Cuba.

"If anyone thinks that threatening Cuba by withholding commercial
opportunities will bring meaningful change in the Cuban government's
behavior, they are hallucinating," "The change in this relationship
isn't something Cuba needs as much as something the United States wants
and that is a very important factor."

He points to the ongoing negotiations on claims between the two nations
as proof.

The U.S. says Cuba owes $1.8 billion for the American-owned properties
and businesses it nationalized. Cuba responds that the U.S. owes it
between $300 billion and $1 trillion for embargo-related damages.

"That does not sound like a country open to negotiations," Kavulich said
with a laugh. "People need to pay attention to nuances."

Gronbeck-Tedesco says there may be some truth to that.

"A rationale on the U.S. side is the Cubans are champing at the bit to
have a everything from the U.S. and there is a certain validity to that
but there is also a possibility that the Cubans want the benefits but
the U.S. must also do things to comply."

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Fox of the Tampa-based alliance provided one example of a motive: The
Cuban government may want its state-run tourist company Havanatur to be
allowed to set up an office in the U.S. in return for American
businesses opening warehouses or offices in Cuba.

Obama has less than 400 days left in office and it is unclear whether
his successor would continue his normalization policy or roll it back.

If the embargo eventually is lifted, one prediction — by Miami-based
Havana Consulting Group, which follows business trends in Cuba — is that
investment by U.S. companies could reach as high as $20 billion soon after.

Kavulich sees the prospect of money flowing in, too, from some of the 2
million Cuban-Americans living here who want to see improvement in the
lives of their families back home and may be willing to invest in
private businesses there.

But he also notes that all this cash may scare off the Cuban government
because it would come at a pace too fast to handle.

Instead, Cuba may feel safer holding out to determine its future
relationship with allies such as Venezuela, which has provided it so
much oil in recent years, as well as China, Russia and the European
Union, Kavulich said.

"The Cuban government continues to struggle mightily in defining success
and how much success someone can have without it defining the class
structure that the Cuban Revolution sought to extinguish," he said.

"How Cuban Americans could influence the beliefs of their relatives is
an unknown. And until that is known, Cuba may prefer they maintain a
distance."



pguzzo@tampatrib.com

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