Administration moving to further liberalize rules on trade with Cuba

Administration moving to further liberalize rules on trade with Cuba
Commerce rules in the works would allow for more U.S. business activity
Proposal latest move in efforts since last December to thaw relations
Expert: Intention is to 'bring American businesses to the island'
BY CHRIS ADAMS
McClatchy Washington Bureau

WASHINGTON
The Obama administration is working to finalize a change in U.S.-Cuba
trade rules that experts called a major development that would
significantly open the door to expanded business on the island.

The regulation has not yet been released, although a 27-page document,
dated Sept. 7 and marked to be reviewed by the White House's Office of
Management and Budget, was provided to McClatchy.

It couldn't be determined if the version that is ultimately released
will match the Sept. 7 version. The Department of Commerce didn't
respond to a request for comment about it.

As indicated in the document, the rules could amend existing ones to
boost engagement between American and Cuban people, accelerate the free
flow of information to and from Cubans, and ramp up independent economic
activity generated by Cubans.

In many ways, the rule would merely be a continuation of the process
begun Dec. 17, when President Barack Obama announced that the U.S. was
seeking to thaw the five-decade freeze in its relations with the island
nation 90 miles from Florida.

After that momentous December announcement, the Commerce and Treasury
departments in January took steps to put in place parts of the
president's policy. The new rules, which could be announced as early as
Friday, could amend the terms of existing license exceptions available
for Cuba, create new licensing policies, and take other steps to further
promote economic activity in Cuba.

Robert L. Muse, a Washington-based lawyer and expert on Cuba trade who
reviewed the Commerce document Thursday, said the moves could be
significant.

"They're greater than the ones in January," he said in an interview.
"The rules in January were important – they established the precedent.
But it was more of a beachhead, and it was a bit murky. Now they are
engaging the business community in a way that's going to be interesting
and important to them. It begins to give them some real commercial
traction."

Among the key changes, Muse said, was that companies engaged in
exporting authorized items to Cuba will be able to establish, maintain
and operate physical premises in Cuba.

That, he said, is significant.

"Maintaining a presence is brand new – that's the big further step they
have taken here," Muse said. "The intention is to bring American
businesses to the island."

An example, he said, would be an agricultural commodity company allowed
to export to Cuba that would now be able to establish a sales office –
or possibly even a warehouse – on the island, thus furthering its prospects.

Several other types of businesses could also be affected, including
aircraft; telecommunications equipment; medicine; and materials,
equipment, tools and supplies.

According to John S. Kavulich, president of the U.S.-Cuba Trade and
Economic Council, the new regulations could permit a U.S. company to
open a distribution center within the Mariel free trade zone; or
shipping companies such as FedEx to have drop-off locations; U.S.
airlines to have a ticket office; home renovation chains to sell
building materials and supplies; or rice companies to have a sales office.

"And the companies can hire Republic of Cuba nationals as employees," he
said.

He added that regulations "would permit the most comprehensive trade and
investment changes to the United States relationship with the Republic
of Cuba in decades."

However, just because the U.S. is authorizing such activity doesn't mean
the Cuban government will allow it.

"This is the U.S. saying to U.S. companies and individuals: You can do
these things," Kavulich said. "You will now have to convince the Cuban
government to let you do them."

Source: Administration moving to further liberalize rules on trade with
Cuba | Miami Herald -
http://www.miamiherald.com/news/nation-world/world/americas/cuba/article35660439.html