When we put together Wednesday’s (1/27/16) session, “Doing Business with Cuba: The Landscape Today and Expectations,” we did so to answer clients’ questions and to attempt to dispel some of the media hype that we were worried could encourage a business owner to make a hasty (and potentially, costly) decision regarding opportunities to trade between the U.S. and Cuba. While we hoped to have a good discussion, of course, we had no way of knowing that the session would be as valuably informative as it was.
With the opportunity to sit on the panel and share insights from the private sector side on the normalization of trade relations between the U.S. and Cuba, I learned so much from our incredible panel of speakers, including John Kaviluch from the U.S.-Cuba Trade and Economic Council, Alexandra López-Casero with Nixon Peabody LLP, and Kevin Ellis from Cayuga Milk Products. It was an absolute honor to serve on the panel with them and engage in what was a lively discussion (that went past the time we were supposed to stop, with no one in the audience leaving their seats!).
They key takeaways from the session:
1. Trade between the U.S. and Cuba is progressing, but it’s not open
Since the Obama Administration’s announcement in December, 2014 that the U.S. will be working toward a stronger trade relationship, many steps have been taken that regard, including just this past week when the Federal government announced critical changes to financing regulations and travel that would eliminate specific barriers to trade. However, there is still an embargo on most exports from the U.S. to Cuba (with some exceptions), and any interest in entering the Cuban market should not be taken lightly, and should be done with professional guidance.
2. Cuba is still a Communist country, so any business dealing with Cuba is dealing with the government.
Despite some of the rhetoric that is coming through the media and some elected officials about how trade with the U.S. will help Cuba, the Cuban government is not actively seeking U.S. help in opening its doors to commerce. Business and business opportunity is 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 find domestically and in most other countries. Cuba also maintains trade relationships with many other countries, so while there are American-made products that would be attractive to the Cuban market, the country is not isolated from the rest of the world and has commerce.
3. Cuba’s culture, itself, is a huge factor in the potential success of Cuba-U.S. trade.
Cuba is not a wealthy country – it was mentioned on the panel that Cuban workers make an average of $20 a month – and people’s lives are not only taken care of, but watched over, by the government. And that’s life since the 1950’s. The Cuban people are incredibly handy, and improve their lives by making the most of what they have. Companies looking to export to Cuba must understand the realities of the market they want to approach, because it is a market that is not necessarily looking to emulate 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, the panel was very positive about the future opportunities for U.S. trade with Cuba. While the consensus was not to dive in headfirst, the tenor of the conversation was certainly that 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.
“Doing Business with Cuba” was an outstanding discussion, enough so that we’re planning to reprise the panel in another market in the near future. We thank not only our speakers, but our sponsors: Greater Rochester Enterprise, World Trade Center Buffalo Niagara, and our host, Genesee County Economic Development Center, for their support.
For more information on our speakers and their organizations, please check out the following links:
- Damon Piatek, Welke Customs Brokers – www.welke.com
- John Kaviluch, U.S.-Cuba Trade and Economic Council, Inc. –www.cubatrade.org
- Alexandra López-Casero, Nixon Peabody LLP –http://www.nixonpeabody.com/alexandra_lopez-casero
- Kevin Ellis, Cayuga Milk Products – www.cmingredients.com