Star

Recommendations

Info

20 Monday, March 21, 2016 The San Juan Daily <strong>Star</strong> Culture Gap Impedes US Business Efforts for Trade With Cuba By VICTORIA BURNETT They have gone to Cuba with plans to build houses. To assemble tractors. To buy apps from young programmers. Even to import charcoal made from the sicklebush that grows in vast stretches across the island. But 15 months after American prospectors began swarming Havana, filling hotels and hiring consultants, only a handful have inked deals to do business with the once-forbidden island. As President Obama visits Cuba this week, the lack of trade with the former foe threatens to sap momentum from the process of building relations. It is also a reminder that beyond tourism — which satisfies Cuba’s need for foreign currency and the desire of Americans to visit the island — the countries have very different visions of economic engagement. “The litmus test of normalization is trade and investment,” said Robert Muse, a Washington lawyer who specializes in Cuba-related law. “That’s how the Obama legacy will be judged.” Eager to show results, the Obama administration in late January made the biggest breach yet in the embargo by permitting Americans to trade with state-owned companies, which control much of Cuba’s commerce and are run, mostly, by the military. The new regulations mean that exporters can apply for a license to sell goods to state entities in sectors that include education, food processing and infrastructure, making them “the most significant” change since Mr. Obama announced a thaw with Cuba in December 2014, said Stephen Propst, a partner at the Hogan Lovells law firm in Washington. The move was a concession to reality: Efforts at opening commerce had, until then, targeted everyday Cubans. But with the island’s trade apparatus controlled by the state, trying to sell American cement to Cuban homeowners or stoves to privately owned restaurants is impractical and of little interest to the Cuban government. The Obama administration has “accepted the fact that they have to do business with Cuban state enterprise,” Mr. Propst saed. The administration loosened restrictions on trade and travel even further and announced new commercial deals with Cuba before Mr. Obama’s arrival on Sunday. The European Union, meanwhile, signed an agreement with Cuba on March 11 to establish normal relations. If ratified by its member states, it will open the way for full cooperation and commercial ties between Cuba and Europe. Cuba has made it clear that it will not alter the way it does business to suit American needs. A stinging editorial published last Wednesday in Granma, the official Communist Party organ, said that Mr. Obama could do even more to ease trade and that, for Cuba, “getting along does not mean having to give up our beliefs.” Cuban officials are “overwhelmed” by the number of American delegations, said Philip Peters, a partner at D17 Strategies, a consultancy in Washington, who travels frequently to Cuba. And, he said, they are “not going to rewrite the rule book” for American entrepreneurs. That rule book is restrictive. Foreigners are barred from buying most property in Cuba, so Americans can only covet the beautiful, crumbling mansions of downtown Havana. The Cuban government usually insists on holding a majority stake in any joint venture outside the new development zone at the port of Mariel, near Havana, where foreign companies can wholly own ventures and receive a 10-year tax holiday. State-owned companies often ask for up to a year to pay for goods, not the customary 90 days. Still, some American businesses have prospered. Airbnb began operating in Cuba in April; Sprint now has a roaming agreement with the Cuban state telecommunications company, Etecsa. Cleber, an Alabama company, received a license in February from the Treasury Department — and has an agreement with the Cuban government — to assemble simple tractors in Cuba to sell to private farmers and cooperatives. Florida Produce, a grocer in Tampa, Fla., has a license from the Treasury to open a distribution warehouse in Cuba and is in talks with the Cuban authorities. But threading the needle between Cuba’s rigid rules and the restrictions that the United States continues to impose is tricky. John S. Kavulich, the president of the U.S.-Cuba Trade and Economic Council, said he had counted about 500 visits to Cuba by American businesspeople since December 2014 and more than 140 visits by United States representatives and officials. But, he said, he could count the number of business deals they had reached on his fingers. Each government has urged the other to do more. Rodrigo Malmierca, Cuba’s minister of foreign trade and investment, told a trade conferencein Washington on Feb. 16 that the countries “need to show that things are happening,” and referred repeatedly to the embargo. Penny Pritzker, the commerce secretary, said the next day that her department had granted American companies billions of dollars’ worth of authorizations to do business in Cuba. In interviews, American entrepreneurs, business lawyers and consultants described a culture gap that often seems the size of the Florida Straits, with Americans expecting swift decisions and baffled by the time and meetings required to get answers from Cuban officials. Kevin Ellis, the chief executive of Cayuga Milk Ingredients, a dairy company in Auburn, N.Y., met with officials at Alimport, a state import company, in Havana in April about selling milk powder. The officials were polite, said Mr. Ellis, who was part of a whirlwind delegation led by Gov. Andrew M. Cuomo of New York. But they seemed more interested in talking about the embargo than about milk, he said. On his return, Mr. Ellis twice emailed Alimport, in Spanish, about sending samples, but did not get a response. “I took that as a ‘No,’ ” he said. Some worry about the lack of freedoms in Cuba. Carlos Medina, the chairman of the Statewide Hispanic Chamber of Commerce of New Jersey, who visited Cuba as part of a business delegation in April, said he was dismayed by the “slow movement toward change” and would not recommend investing there. Internet access, for example, has improved only marginally over the past year, and political oppression continues, said Mr. Medina, an engineer who does aerial mapping. Business cannot thrive in “this controlled environment,” he said. Some Americans have only a vague grasp of the United States regulations or of the kind of business they are pursuing, lawyers and consultants said. Even when advised that their proposal will not be successful, some still insist on visiting Havana. Mr. Peters said those who do succeed in making deals “are prepared to have extended dialogue in Cuba and go and return.” “It’s not done by a quick visit and followup by email,” he said. The seafront outside the American Embassy in Havana. Cuba has made it clear that it will not alter the way it does business to suit American needs. Saul Berenthal, a co-founder of Cleber, the tractor company, who was born in Cuba and spent part of his childhood there, said he had studied Cuban and American regulations in detail and then identified a gap in the Cuban market: small tractors that do not require sophisticated parts. “I spend a lot of time understanding the social context in Cuba,” Mr. Berenthal said. Meanwhile, applications for licenses from United States officials take months to process, as officials grapple with business proposals for which there is no precedent. Ambar Diaz, a Miami lawyer who handled Cleber’s application, said it had taken seven months to get the license for the tractor project. She has been waiting four months for a license for a Hollywood filmmaker who wants to film in Cuba, and has another license pending to import charcoal from a group of Cuban entrepreneurs. “My job is to test the limits of the regulations,” she said. The most important change that United States regulators could make — and that many expected would be made before Mr. Obama’s trip — is to lift a ban on using dollars in transactions with Cuba, lawyers and consultants said. The ban means that legitimate trade with Cuba has to be financed through complicated, three-way operations or simply does not happen because no bank wants to handle it. Lifting that restriction would “take many of the excuses away from Cuba” for holding up business deals, Mr. Kavulich said. Mr. Muse predicted that the Obama administration would continue to relax restrictions during its remaining months, regardless of how Cuba responds. The notion of the process as quid quo pro is false, he said, adding, “You cannot deal in conditionalities with the Cubans.”
The San Juan Daily <strong>Star</strong> Monday, March 21, 2016 21 Cuba Rebukes Obama’s Call for Change But Will Nix Dollar Tax Cuba’s government offered a rebuke late last week of President Barack Obama’s plans to use his visit to promote change on the island, even as it took a long-sought step to lift a penalty on converting U.S. dollars. The White House stood firmly behind Obama’s plans to deliver a pro-democracy message directly to Cubans. Three days before Obama’s history-making trip began on Sunday, Foreign Minister Bruno Rodriguez said Cuba would remove the 10 percent penalty if the U.S. follows through on letting Cuba access the global banking system. Aside from that single step, he offered no indication that Cuba would make further economic changes sought by the U.S., and he dismissed Obama’s sweeping steps to ease the U.S. embargo on Cuba as essentially meaningless. “Various U.S. officials have declared in recent hours that the objective of Obama’s measures is empowering the Cuban people. The Cuban people empowered themselves decades ago,” Rodriguez said, referring to the 1959 revolution that put the current Cuban government in power. He added that “something must be going wrong in U.S. democracy” and urged Obama to focus instead on empowering his own people. But Susan Rice, Obama’s national security adviser, made clear that Obama had no plans to curtail his call for more freedoms for Cubans during his three-day trip to Havana, the first by a sitting president in nearly 90 years. Hours after Rodriguez addressed reporters in Havana, Rice said Obama would meet with dissidents in Cuba and “speak candidly” with President Raul Castro about areas of disagreement — “particularly human rights.” “We believe the Cuban people, like people everywhere, are best served by genuine democracy,” Rice said. The tough talk from the Cuban government reflected the dual pressures on Castro’s government as he hosts the leader of the country’s longtime Cold War foe. Though Cuba’s government is hungry for more U.S. investment, it is also wary of increased U.S. influence and frustrated that Obama has been unable to get Congress to lift longstanding U.S. sanctions. Nationalist, anti-embargo rhetoric is a feature of Cuban government statements. Yet Rodriguez’s speech was striking for its strong language and acid tone. White House officials have downplayed concerns that such antagonistic comments poison the climate for Obama’s visit or indicate Cuba is unready to truly normalize relations. Anti-American quips aside, greater U.S. engagement with Cuba is already helping Cuban citizens pursue more opportunity and better lives, Obama has said. Unable to get Congress to lift the embargo, Obama has been systematically rolling back U.S. restrictions on Americans traveling and doing business in Cuba using People surf the Internet at a public Wi- Fi hotspot in downtown Havana, Cuba, Wednesday. his regulatory powers. Still, Cuba’s government insists it is waiting for the embargo to be repealed before significantly opening up its economy. Rodriguez gave a lengthy list of complaints including the ban on Cuban government accounts in U.S. banks and a prohibition on direct U.S. investment in Cuba. Still, Rodriguez laid out a scenario under which the 10 percent penalty on dollars exchanged at banks and money-changers in Cuba would soon be lifted, making it easier and cheaper for Americans to spend time in Cuba. Last week the U.S. lifted a ban on Cuban access to the global banking system, a longstanding Cuban demand. Rodriguez told reporters that Cuba would attempt a series of international transactions in the subsequent days. If they work, Cuba will eliminate the 10 percent penalty. The Obama administration’s latest attempt to ease restrictions on Cuba despite the embargo came earlier Thursday when the U.S. removed Cuba from its list of countries deemed to have insufficient security in their ports, eliminating a major impediment to the free flow of ships in the Florida Straits. The shift clears the way for U.S. cruise ships, cargo vessels and even ferries to travel back and forth with much less hassle. No longer will all ships have to wait to be boarded by the U.S. Coast Guard for inspections, though the Coast Guard still can conduct random inspections. Removing Cuba’s designation under rules designed to fight terrorism also addresses a sore spot in the painful history between Cuba and the U.S., which dominated the island before relations were cut off amid the Cold War. After all, it was only last year that the U.S. removed Cuba from the State Department’s list of state sponsors of terrorism. While in Havana, Obama plans to give a major speech that the White House has said will focus on the future of U.S.-Cuba ties and how Cubans can pursue a better life. Announcing that Obama’s speech would be carried live on Cuban television, Rodriguez said Cubans would be able to draw their own conclusions from the president. US to Declassify Military, Intelligence Records on Argentina ‘Dirty War’ President Barack Obama will move to declassify U.S. military and intelligence records related to Argentina’s “Dirty War,” the White House said late last week, aiming to bring closure to questions of U.S. involvement in a notorious chapter in Argentina’s history. Obama’s visit to Buenos Aires this week coincides with the 40th anniversary of the 1976 military coup that started Argentina’s 1976-83 dictatorship. Little is known about the U.S. role leading up to that period, in which thousands of people were forcibly disappeared and babies systematically stolen from political prisoners. Susan Rice, Obama’s national security adviser, said Obama would use his trip to announce a “comprehensive effort” to declassify more documents, at Argentina’s request. She said Obama would also visit Remembrance Park in Buenos Aires to honor victims of the dictatorship. “This anniversary and beyond, we’re determined to do our part as Argentina continues to heal and move forward as one nation,” Rice said in a speech ahead of Obama’s trip. The announcement was sure to have a big impact in Argentina, where even today what happened during the dictatorship is often a part of the national discourse. “This is transcendental. We believe it’s a huge gesture,” Marcos Pena, the Cabinet chief of Argentine President Mauricio Macri, told local channel Todo Noticias. Pena added that it would be welcomed by human rights groups who have questioned Obama’s presence on the anniversary. The U.S. has previously released 4,000 State Department documents related to that period, but those documents tell only part of the story. Notes from a 1976 meeting between Secretary of State Henry Kissinger and Argentina’s foreign minister, for example, seemed to show Kissinger urging his new counterpart to clamp down on dissidents they referred to as “terrorists.” “If there are things that have to be done, you should do them quickly,” Kissinger said, according to a transcript the U.S. declassified more than a decade ago. In Argentina, human rights advocates have repeatedly called for the U.S. to divulge the rest of the information it has in hopes of exposing any wrongdoing. As part of the new declassification effort, the U.S. will search for additional records related to rights abuses committed by the junta, said a senior Obama administration official, who wasn’t authorized to discuss the program by name and requested anonymity. That search will for the first time include records from U.S. intelligence agencies, along with the Pentagon, U.S. law enforcement agencies and records housed in presidential libraries, the official said. Claudio Avruj, Argentina’s secretary of human rights, said opening the archives could shed light on Argentine soldiers trained at the School of the Americas and the so-called Plan Condor, a coordinated effort between South American dictatorships to stamp out dissent through assassinations, torture and repression. “This is also going to help in the search for grandchildren taken during the dictatorship,” said Avruj via Twitter.
Page 1 and 2: San The Juan Monday, March 21, 2016
Page 3 and 4: GOOD MORNING The San Juan Daily Sta
Page 5 and 6: The San Juan Daily Star Monday, Mar
Page 19: The San Juan Daily Star Monday, Mar
Page 31 and 32: Monday, March 21, 2016 Official Reg
Page 33 and 34: The San Juan Daily Star the South e
Page 35 and 36: The San Juan Daily Star NA: Solar m
Page 37 and 38: The San Juan Daily Star Colecturía
Page 39 and 40: The San Juan Daily Star RICO INVEST

Star

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?