Thursday, May 29, 2014

US business leaders assess Cuba business climate

Posted on Wednesday, 05.28.14

US business leaders assess Cuba business climate

HAVANA -- The head of the U.S. Chamber of Commerce toured an auto repair
cooperative and talked with newly minted private entrepreneurs Wednesday
as part of the first American trade mission of its kind to Cuba in 15 years.

Chamber president and CEO Thomas J. Donohue led a baker's dozen of U.S.
business figures to assess the island's changed business climate under
economic reforms that have included an expansion of the tiny private
sector, the decentralization of state-run enterprises and a drive to
lure badly needed foreign investment.

"We're very pleased to be here," Donohue said. "We're learning a lot
about the changes taking place in Cuba."

Washington and Havana have not had formal diplomatic relations since the
early 1960s, and the United States maintains a 52-year-old trade embargo
against the Communist-run country.

Cuba buys some U.S. food and agricultural goods under an exception to
the sanctions, but in recent years has increasingly turned to other
countries that don't require cash up-front.

From a high of $962 million in 2008, U.S. sales to the island fell to
$509 million in 2012, the most recent year for which official figures
are available.

Cuba's calculation is believed to be higher than the simple dollar value
of the imports, apparently factoring in embargo-related losses due to
unfavorable credit terms, currency exchanges and shipping complications.

Chamber officials said the goal of the trip was to explore not only
trade possibilities allowed under the current rules but also
opportunities in a post-embargo future.

At the Havana auto body shop, which 10 months ago was converted from a
state-run business to an autonomous cooperative, masked workers sanded
car hoods and fenders to prepare them for fresh paint jobs as the
visitors got a guided tour.

"This new model of association gives you the freedom of self-management,
which allows us to do more and make decisions about our resources,"
co-op president Marcelo Gonzalez said. "Productivity has greatly increased."

Cuban officials say cooperatives are a key element of their drive to
boost efficiency without abandoning entirely the socialist principles
that have guided the economy for more than a half-century.

About 450 non-agricultural cooperatives are currently in operation and
some 455,000 Cubans own or are employed by private small businesses,
according to government figures.

Donohue, who has been president of the Chamber since 1997 and last
visited the island in 1999, said today's Cuba is "fundamentally
different in terms of the number of people that are operating under the
private system ... not working for the government."

The trip was criticized by some back home including Sen. Robert
Menendez, a Cuban-American Democrat from New Jersey who sent a letter to
the Chamber expressing concerns about strengthening trade ties to Cuba.

He alleged that several foreign businesspeople jailed alongside dozens
of islanders as part of a crackdown on corruption were imprisoned
"without justification," and accused Havana of violating international
labor standards and oppressing fundamental human rights.

"Such conditions hardly seem an attractive opportunity for any
responsible business leader," Menendez said.

The Chamber group was meeting privately with small-business owners later
in the day and paying a visit to Energas SA, a joint concern between the
Cuban government and Canada's Sherritt that operates several gas-powered
electrical plants on the island's northern coast.

The delegation included top executives from Minnesota agribusiness giant
Cargill and Alticor, the Michigan-based parent company of the
direct-sales business Amway.

Foreign Minister Bruno Rodriguez and Foreign Commerce Minister Rodrigo
Malmierca Diaz greeted the group after it arrived Tuesday.

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