By Damon Piatek
Link to Story (Buffalo News – 2/11/16)
The U.S.-Cuba trade relationship is beginning to become more clear, but without question since President Obama’s announcement in December 2014 that the United States would be strengthening that relationship, the hype has far superseded actual progress. While some barriers to trade have been eased in recent months, there remain many challenges to overcome before the opportunity will become fruitful for U.S. exporters.
Since the Obama administration’s announcement, many steps have been taken toward opening and strengthening the trade relationship, including just at the end of January when the federal government announced critical changes to financing and travel restrictions that were significant roadblocks. Nevertheless, an embargo is still in place on most exports from the United States to Cuba (with some exceptions). Any interest in entering the Cuban market should not be taken lightly, and should be done with professional guidance. The bottom line is that trade with Cuba is opening, but not open.
It is important to remember that Cuba is still a Communist country, so any business dealing with Cuba is dealing with the Cuban government. Despite some of the rhetoric that is in the public dialogue about how trade with the United States will help Cuba, the Cuban government is not necessarily seeking U.S. help in opening its doors to commerce. Business and business opportunity are still highly regulated in Cuba, and any company negotiating with Cuba to export must understand that there are governmental and political factors involved that you won’t encounter domestically and in most other countries. Cuba also maintains trade relationships with many other nations, so while there are American-made products that would be attractive to the Cuban market, the country is not isolated and has existing commerce.
Cuba’s culture, itself, is a huge factor in the potential success of Cuba-U.S. trade. Cuba is not a wealthy country – Cuban workers make an average of $20 a month – and people’s lives are not only taken care of, but monitored, by the government. Companies looking to export to Cuba must understand the realities of the market they want to approach, because it is a market that is largely not yearning for the American way of life.
Despite the many challenges and the time it will actually take to overcome even just the political and regulatory pieces of the puzzle, companies should remain positive about future opportunity for U.S. trade with Cuba.
Certainly Western New York companies with interest in Cuba should be doing their homework now for when the opportunities begin to manifest themselves, and putting themselves in the best position to take advantage.
Damon Piatek is president of Welke Customs Brokers USA in the City of Tonawanda.