on France - Cuba Trade

Economic relations

Since 2001, our trade has been declining sharply. Since this time, we
have dropped from 5th to 12th in terms of suppliers to Cuba. This loss
of market share is due in part to the position acquired by the United
States in supplying food to the island (our sales of agrifood products
fell 67.3% in 2004), a sector in which we were leaders, and to the
suspension of the COFACE compensation package (export guarantees),
because of Cuba’s accumulated payment arrears. Cuba committed to an
initial discharge of COFACE arrears in 2005, but this needs to be
confirmed. Moreover, our exports, for which industry now holds the
leading position (especially in terms of capital goods), are not very
diversified and depend excessively on major contracts. They have also
been adversely affected by the rise in the euro.

The first half of 2005 broke with this downward trend, with our exports
increasing 10.8% and our imports jumping 79.4%. Our agrifood sales grew
59.1%, with our purchases mirroring this trend (+79.4%). Despite a
certain tailing off (-7.2%), the industry remains our most significant
export sector. During this period, Cuba was our 91st-biggest customer
and our 97th-leading supplier.

French investment seems inadequate in terms of the potential of the
Cuban market. Our companies face a general difficulty: in order to make
its recovery possible, Cuba has indeed been forced to open up
progressively to investment since 1993, but the government still views
foreign investment as a necessary evil and maintains restrictive rules
thereon. Accordingly, in late 2004, the Cuban economy received only USD
6 billion in foreign direct investment (including investment
intentions). France ranks fourth, with approximately 6% of total foreign
direct investment, well behind Spain (25%), Canada (20%) and Italy
(19%). While some sixty French companies are active in Cuba, only 18 of
them are established as joint ventures or branches. Our investment comes
primarily from major groups and is concentrated in sectors such as
tourism, construction, telecommunications, energy, agrifood and banking.

Updated on 12/04/06

http://www.diplomatie.gouv.fr/en/country-files_156/cuba_467/france-and-cuba_3461/economic-relations_4402.html