US business leaders assess Cuba business climate

Posted on Wednesday, 05.28.14



US business leaders assess Cuba business climate

BY PETER ORSI

ASSOCIATED PRESS



HAVANA -- The head of the U.S. Chamber of Commerce toured an auto repair

cooperative and talked with newly minted private entrepreneurs Wednesday

as part of the first American trade mission of its kind to Cuba in 15 years.



Chamber president and CEO Thomas J. Donohue led a baker's dozen of U.S.

business figures to assess the island's changed business climate under

economic reforms that have included an expansion of the tiny private

sector, the decentralization of state-run enterprises and a drive to

lure badly needed foreign investment.



"We're very pleased to be here," Donohue said. "We're learning a lot

about the changes taking place in Cuba."



Washington and Havana have not had formal diplomatic relations since the

early 1960s, and the United States maintains a 52-year-old trade embargo

against the Communist-run country.



Cuba buys some U.S. food and agricultural goods under an exception to

the sanctions, but in recent years has increasingly turned to other

countries that don't require cash up-front.



From a high of $962 million in 2008, U.S. sales to the island fell to

$509 million in 2012, the most recent year for which official figures

are available.



Cuba's calculation is believed to be higher than the simple dollar value

of the imports, apparently factoring in embargo-related losses due to

unfavorable credit terms, currency exchanges and shipping complications.



Chamber officials said the goal of the trip was to explore not only

trade possibilities allowed under the current rules but also

opportunities in a post-embargo future.



At the Havana auto body shop, which 10 months ago was converted from a

state-run business to an autonomous cooperative, masked workers sanded

car hoods and fenders to prepare them for fresh paint jobs as the

visitors got a guided tour.



"This new model of association gives you the freedom of self-management,

which allows us to do more and make decisions about our resources,"

co-op president Marcelo Gonzalez said. "Productivity has greatly increased."



Cuban officials say cooperatives are a key element of their drive to

boost efficiency without abandoning entirely the socialist principles

that have guided the economy for more than a half-century.



About 450 non-agricultural cooperatives are currently in operation and

some 455,000 Cubans own or are employed by private small businesses,

according to government figures.



Donohue, who has been president of the Chamber since 1997 and last

visited the island in 1999, said today's Cuba is "fundamentally

different in terms of the number of people that are operating under the

private system ... not working for the government."



The trip was criticized by some back home including Sen. Robert

Menendez, a Cuban-American Democrat from New Jersey who sent a letter to

the Chamber expressing concerns about strengthening trade ties to Cuba.



He alleged that several foreign businesspeople jailed alongside dozens

of islanders as part of a crackdown on corruption were imprisoned

"without justification," and accused Havana of violating international

labor standards and oppressing fundamental human rights.



"Such conditions hardly seem an attractive opportunity for any

responsible business leader," Menendez said.



The Chamber group was meeting privately with small-business owners later

in the day and paying a visit to Energas SA, a joint concern between the

Cuban government and Canada's Sherritt that operates several gas-powered

electrical plants on the island's northern coast.



The delegation included top executives from Minnesota agribusiness giant

Cargill and Alticor, the Michigan-based parent company of the

direct-sales business Amway.



Foreign Minister Bruno Rodriguez and Foreign Commerce Minister Rodrigo

Malmierca Diaz greeted the group after it arrived Tuesday.



Peter Orsi on Twitter: www.twitter.com/Peter-Orsi



Source: "HAVANA: US business leaders assess Cuba business climate -

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