US companies see grim outlook in Cuba despite Obama opening
For a while Saul Berenthal and Horace Clemmons were the seventy-something poster boys of U.S.-Cuba detente. The retired software entrepreneurs made worldwide headlines by winning Obama administration permission to build the first U.S. factory in Cuba since 1959. Cuban officials lauded their plans to build small tractors in the Mariel free-trade zone west of Havana. But after more than a year of courtship, the Cuban government told Berenthal and Clemmons to drop their plans to build tractors in Cuba, without explanation, Berenthal said Monday. A month and a half ago, their first tractors started rolling off the assembly line - in the town of Fyffe, Alabama, population about 1,000.
"Producing the tractors in Mariel was not going to happen," Berenthal said.
He said the company is already selling tractors to customers in the U.S. and Australia and has had inquiries from Peru, Mexico and Ethiopia. He also still hopes to sell to Cuba. Two years into President Barack Obama's campaign to normalize relations with Cuba, his push to expand economic ties is showing few results. Apart from a few marquee deals for big U.S. brands, formal trade between the two countries remains at a trickle.
The mood was subdued among U.S. companies exhibiting Monday at the International Fair of Havana, the island's biggest general-interest trade fair. As Cuba trumpeted new deals with Russia and Japan, U.S. corporate representatives staffing stands at a pavilion shared with Puerto Rico said they saw little immediate prospect for doing business with Cuba.
"We know we have to be here, to show our willingness to be here," said Diego Aldunate, Latin America director for Illinois-based Rust-Oleum paints.
He and a colleague, Oscar Rubio, said they were waiting for potential clients from Cuba's small worker-owned cooperative sector to stop by their stand, but by midafternoon no one had appeared.
The Cuban government maintains a monopoly on importing and exporting and on virtually all sales of products inside the country, making the state bureaucracy the final arbiter of what business gets done.
"The complicated thing is that the distributor is the government, and we don't know how that will work," Rubio said.
Obama has enacted six rounds of regulations punching holes in the half-century-old U.S. trade embargo on Cuba, allowing imports and exports, sales to the socialist government and limited U.S. investment on the island. Cuba has allowed Airbnb, Starwood hotels and 10 U.S. airlines to set up operations.
Cuban officials blame the remaining provisions of the embargo as the true obstacle to greater trade with the U.S., placing constant and heavy emphasis on what they call "the blockade."
"Producing the tractors in Mariel was not going to happen," Berenthal said.
He said the company is already selling tractors to customers in the U.S. and Australia and has had inquiries from Peru, Mexico and Ethiopia. He also still hopes to sell to Cuba. Two years into President Barack Obama's campaign to normalize relations with Cuba, his push to expand economic ties is showing few results. Apart from a few marquee deals for big U.S. brands, formal trade between the two countries remains at a trickle.
The mood was subdued among U.S. companies exhibiting Monday at the International Fair of Havana, the island's biggest general-interest trade fair. As Cuba trumpeted new deals with Russia and Japan, U.S. corporate representatives staffing stands at a pavilion shared with Puerto Rico said they saw little immediate prospect for doing business with Cuba.
"We know we have to be here, to show our willingness to be here," said Diego Aldunate, Latin America director for Illinois-based Rust-Oleum paints.
He and a colleague, Oscar Rubio, said they were waiting for potential clients from Cuba's small worker-owned cooperative sector to stop by their stand, but by midafternoon no one had appeared.
The Cuban government maintains a monopoly on importing and exporting and on virtually all sales of products inside the country, making the state bureaucracy the final arbiter of what business gets done.
"The complicated thing is that the distributor is the government, and we don't know how that will work," Rubio said.
Obama has enacted six rounds of regulations punching holes in the half-century-old U.S. trade embargo on Cuba, allowing imports and exports, sales to the socialist government and limited U.S. investment on the island. Cuba has allowed Airbnb, Starwood hotels and 10 U.S. airlines to set up operations.
Cuban officials blame the remaining provisions of the embargo as the true obstacle to greater trade with the U.S., placing constant and heavy emphasis on what they call "the blockade."
Last Update: November 01, 2016 21:28