Saturday, February 21, 2015

What are Alabama's chances to boost business activity, trade with Cuba?

What are Alabama's chances to boost business activity, trade with Cuba?
By Michael Finch II |
on February 20, 2015 at 5:38 PM, updated February 20, 2015 at 5:45 PM

Everybody's paying close attention to Cuba. A relatively untapped
market, the largest country in the Caribbean stands to be significant
trade partner with the US if relations are normalized.

The process will be slow-moving and in some cases met with opposition.
But many in Alabama remain optimistic about the opportunity.

The country is "on the radar screen" said Hilda Lockhart, who leads
trade initiatives with the Alabama Department of Commerce. "We're
getting a lot of calls from a lot of our companies wanting to sell
there," Lockhart said.

"We're trying to monitor it, but right now we don't see a lot that can
happen in the short term."

Wood and agricultural products

Alabama shipped about $32.8 million worth of goods to the island nation
last year, all of which was categorized as a food product, according to
the Foreign Trade Division of the U.S. Census Bureau. It's likely poultry.

Forestry and wood products were once an export worth about $1 million
until 2012 when they stopped. The commerce department's Lockhart said
the fall of could be due to the stringent demand for the country to pay
cash up front when buying from the US companies.

"My understanding is that Cuba doesn't really have much money so they
don't have the capability to buy," she said.

Lockhart may be right. But wood and forestry product manufacturers are
still among those highly interested, she said.

Brian Davis, director of the International Trade Center in Tuscaloosa
has one other theory. The wood products they needed tended to be things
that they needed after hurricanes," Davis said. Things like poles,
pilings and structural lumber would be essential in those moments.
That's why exports, he said, "would spike and then things would drop off."

There's also the country's scarce money supply, he said, as Lockhart

Meanwhile Congress continues to weigh-in on the issue, holding hearings
to hash out the details. Small packs of congressional leaders have also
visited Cuba recently. What's more, the issue created a rift between
Republican lawmakers, split between agricultural product-producing
states and other members of the party.

U.S. Rep. Bradley Byrne has been one voice of opposition. During a
speech on the house floor, the Fairhope congressman called for
significant reforms be made before economic benefits are extended to the

In his January remarks, Byrne said Cuban citizens must first "be treated
with respect and dignity and be provided with the basic freedoms." He
added, "Under those conditions, and with a president willing to work
with Congress, the embargo could be lifted and progress could truly begin."

President Barack Obama's plan outlined a number of key initiates,
springing the negotiations to life. Establishing a permanent embassy is
a major priority. He also relaxed some restrictions on financial

Telecom opportunities

A provision allowing American telecommunications firms to offer services
to Cuba adds to the limited number of industries allowed to ship goods
to the country. Cuba has a startling need for internet infrastructure,
said Gary Bolton, vice president for global marketing for ADTRAN in

That issue came up again when online video streaming website Netflix
announced that it would offer its service in Cuba.

Having the infrastructure for high-speed internet is also "critical to
economic development," Bolton said. ADTRAN, which offers a variety of
communication equipment, hopes to grab a piece of the Cuban market, too
-- if and when the country is ready to do business.

"Obviously there is a significant gap between the current philosophy by
Cuba's leadership and what President Obama is looking to [do]," Bolton
said. "The internet is one of the key enablers to help forge this

Bolton said the Caribbean and Latin America have been "growing" areas
for ADTRAN, which operates worldwide. They recently partnered with a
firm to offer their services in Grenada. Working in Cuba wouldn't be
that much of a departure.

The country of 11 million people would be considered a "greenfield,"
basically a fresh slate with no real internet infrastructure to upgrade,
he said. Everything would be installed for the first time.

"It would be such a quantum leap [from] the infrastructures they have

Source: What are Alabama's chances to boost business activity, trade
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