American companies come to Cuban capital for trade expo

After Cuba and US decide to re-establish diplomatic relations in historic attempt this year, US companies look into business and investment opportunities in long embargoed island

Photo by: Reuters
Photo by: Reuters

Flags of Cuba and US, hang on at the US pavilion during the Havana International Fair

About 50 American businesses came to Havana this week for a trade expo, many of them intrigued but still unclear how to make money in a Communist-ruled country of 11 million people who have little purchasing power.

With detente raising hopes that full commercial ties could be restored, US companies are being drawn to Cuba. But it is a market whose attraction defies convention, given that foreign businesses complain about the island's bizarre dual-currency system, rigid labor market and opaque legal guarantees.

Some US companies are attracted to the forbidden fruit - the island has been largely off bounds to US business for more than five decades. Others say they can fill a need, or lament that the United States is ceding a neighboring market to the rest of the world.

One US company that is in line to open the first American factory in Cuba in more than half a century is interested in the island only because its co-founder was born here.

Alabama-based Cleber LLC says it has been approved by the Cuban government to assemble tractors at the special development zone surrounding the port of Mariel. But because of the continuing US trade embargo, Cleber would need special US permission to open shop.

"We can open businesses anywhere in the world. Cuba is special on a personal basis," said Saul Berenthal, a Cuban-American who left the island in 1960, the year after Fidel Castro's rebels came to power.

US President Barack Obama and Cuban President Raul Castro agreed last December to end Cold War-era animosity and restore diplomatic relations, but the embargo remains in place as only the US Congress can lift it.

Obama has permitted some commerce such as telecommunications, and allowed US companies to sell to Cuba's nascent private sector, adding to existing limited business.

For its part, Cuba is enticing foreigners with tax cuts and a Chinese-style special development zone around Mariel.

There are US companies with a firm business plan. Sprint Corp signed an agreement with Cuba's state telecoms monopoly Etecsa on Sept. 25 and added an agreement on roaming services on Monday.

Others are global giants that see every market as worthy of capturing. Among the visiting US companies this week were PepsiCo, American Airlines, Boeing, Cargill and Caterpillar.

US businesses at the trade fair appeared united in opposing the embargo. Congressional advocates of the embargo argue it should remain in place to pressure Cuba on human rights.

"It's not fair for our politicians to be blocking us from at least exploring the opportunity," said Michael Maisel, international liaison for Commonwealth Packaging Company. "At that point, we take the risk, but at least let us get to that point."