In Cuba, international businesses abound - just not from the U.S.

Posted on Friday, 04.13.12

In Cuba, international businesses abound - just not from the U.S.
By Kevin G. Hall and Franco Ordonez
McClatchy Newspapers

HAVANA — Leaving Jose Marti International Airport in this capital city,
a billboard reminds vividly of the U.S. trade embargo on Cuba. It shows
a noose with the phrase, "Blockade: The Longest Genocide in History."

The embargo, partially imposed in 1960 and fully in place two years
later, is not a blockade. That's clear by the abundance of foreign goods
and investment in Cuba.

It is a blockade, however, in the sense that U.S. companies are blocked
from doing business in Cuba. That hasn't stopped their international
competitors from Canada, Mexico, Brazil and even China from setting up shop.

It's striking when visiting the island just how much the rest of world
now trades with, invests in and sends tourists to Cuba.

Just drive east from Havana on the Via Blanca highway along the
northwestern coast and toward Varadero, the Cuban resort city where
Europeans, Canadians and Brazilians frequently vacation. Even before you
reach Varadero's beaches, there are plenty of reminders of globalization.

Near the town of Santa Cruz del Norte, China's Greatwall Drilling Co. is
searching for oil in cooperation with the Cuban state oil company known
as Cupet. Some workers sport red jumpsuits with the company's GWDC logo.
Much of the machinery was made in Romania during the era of Soviet
control over the East Bloc.

Chinese Vice President Xi Jinping, expected to become his nation's next
leader in 2013, visited the joint venture in June. Greatwall has
developed more than 63 wells in Cuba since 2005, the newspaper China
Daily reported then.

Greatwall's parent company, the China National Development Corp., won a
contract in 2010 to expand a Cuban oil refinery jointly owned with
Venezuela's state oil company, PDVSA.

Just down the road from Santa Cruz del Norte, the Canadian flag flies in
a joint venture between Cuba's state energy sector and Sherritt
International Corp. Sherritt, one of the biggest foreign investors in
Cuba, is involved in oil and gas drilling and financed expansion of a
nearby gas-fired power plant.

And Spain's oil giant Repsol YPF in February began drilling in the
ultra-deep waters offshore, about 30 miles northwest of Havana. Repsol
and its Indian and Norwegian partners are drilling for oil about 5,600
feet below the ocean surface in the Strait of Florida.

Foreign firms are seeking opportunities in other business sectors, too.
Up until 2004, U.S. farmers accounted for 36 percent of food aid to the
island. Much of that involved exports of poultry products, corn and
soybeans from the U.S. heartland. But the Bush administration tried to
put further pressure on the Cuban economy by requiring more upfront cash
from Cuba for imported food.

In 2008, the U.S. exported $710 million in farm goods to Cuba, a figure
that fell to $347 million in 2011, according to the U.S.-Cuba Trade and
Economic Council, a New York-based group that favors an end to the embargo.

Into the gap came Brazilian farmers, whose government provided looser
terms and took much of the business.

Advocates of lifting the embargo say international companies have
partnered with Cuba on a wide range of products, including Cuban cigars,
rum, bottled water, fruit juices, port development, ice cream and cosmetics.

"Not to mention oil, which is the 800-pound gorilla that's about to walk
into the room," said Kirby Jones, whose company, Alamar Associates, has
been consulting and leading U.S. trade missions to Cuba since 1974.
"Here's China, drilling for oil in Cuba."

Still, there's little expectation that the United States will lift its
trade embargo soon. The issue is expected to come up again over the
weekend when President Barack Obama travels to Columbia to meet with
other leaders in the hemisphere. But Obama's hands are tied: Congress in
1996 enshrined the embargo in a law known as the Helms-Burton act. That
law mandates that the embargo can be lifted only once a democratic
government rules in Cuba.

Pope Benedict XVI, during his visit to Cuba last month, repeated the
Vatican's longstanding opposition to the embargo on the grounds that it
hurts the poor, not the Cuban government.

"The present hour urgently demands that in personal, national and
international co-existence we reject immovable positions and unilateral
viewpoints," Benedict said in Havana.

But the embargo is popular in Florida, a battleground state in the
upcoming presidential election, where Cuban exile voters in Miami will
no doubt prove a major influence.

Ninoska Perez, a commentator on Miami's Spanish-language Radio Mambi,
said nothing has happened in Cuba that merits lifting the embargo. The
Castro regime continues to repress its people, she said, adding that
during Pope Bendict XVI's recent visit, dissidents were prevented from
attending events and had their phone lines cut.

Rep. David Rivera, R-Fla., also defended the embargo, saying it's the
only foreign policy tool the United States has to ensure that the next
government doesn't follow the Castro regime's leadership path.

"Whatever type of transitional government or transitional regime that
will be in place will know that unless they move toward democratic
reforms, the United States will not lift the economic embargo," he said.

Some former U.S. officials say lifting the embargo, however, might
actually encourage change. They note that since the embargo was imposed,
the Vietnam War came and went, the Soviet Union collapsed, the two
Germanys reunited and communist China rose to become the world's
second-largest economy. The United States now trades with all those
former enemies, even Vietnam and China, where there has been no
political opening. But the Cuban embargo continues and the Castro
brothers, Fidel and Raul, remain firmly in control.

Vicki Huddleston, a retired U.S. ambassador who headed the U.S.
interests section in Havana from 1999 to 2002, said she now favors
lifting the embargo, a step she said would encourage change on the island.

"It would change the whole dynamic," Huddleston said. "Trade is hard to
control. They'd have to cope with something they've never had to cope
with. And then they would be really forced into making those economic
and political changes that they're managing now."

http://www.miamiherald.com/2012/04/13/v-fullstory/2746455/in-cuba-international-businesses.html