Embargo remains for some Cuba sectors, as trade grows slowly

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People stand on balconies prior to a fashion show displaying creations by German designer Karl Lagerfeld as part of his latest inter-seasonal Cruise collection for fashion house Chanel at the Paseo del Prado street in Havana, Cuba, May 3, 2016. REUTERS/Alexandre Meneghini  - RTX2CPT7

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AMY GUTTMAN: Visitors to Cuba may find the lack of modernization part of the country’s charm, but if Cuban farmers and American investors get their way, oxen that still till these fields may finally be replaced.

Cuban-American entrepreneur Saul Berenthal owns Cleber, an Alabama-based tractor manufacturing business. He’s among the first to obtain a U.S. license to export agricultural machines, like the ones seen here, to Cuba.

SAUL BERENTHAL: This is an opportunity for us to go back and see, in my mind, how do we help the two communities together? Because I believe, through commerce, through business, and not politics, is the best way of bringing the peoples together.

AMY GUTTMAN: Berenthal also believes better machines will help Cubans decrease their dependence on imports, which account for 80 percent of the island’s food supply.

SAUL BERENTHAL: What we chose was a tractor that was designed in the late 1940s for the U.S. family farm. Very much like what you see here and very much like what you see throughout the whole country.

AMY GUTTMAN: Cuba has yet to approve the sale of Berenthal’s tractors. When it does, he plans to ship them assembled, but one day he hopes to set up a factory here so Cubans can build them. Berenthal was born and raised in Havana, the son of European immigrants who fled the Holocaust. His parents were successful merchants who imported American products until the Cuban Revolution in 1959 when they left Havana for Miami.

SAUL BERENTHAL: The socialist economic model is to keep the land in the hands of the people who work the land, and therefore every Cuban that is willing to, is given X amount of land, for them to cultivate and they get the government to buy their crop, and what we’re doing is trying to bring some technology that will allow them to be more productive with what they do.

AMY GUTTMAN: The Cuban Government buys a portion of what farmers produce to stock bodegas where Cubans use ration cards to buy food. Farmers can sell the rest at produce stands for cash.

Agriculture is one of the biggest sectors targeted for stronger trade with the U.S. Since a sanctions reform act in 2000, thirteen states led by Virginia, Alabama, and Louisiana have exported to Cuba limited amounts of products like soybeans, apples, and poultry. Those shipments topped $150 million in the first nine months of this year.

At the same time, the U.S. allowed Cuban imports of coffee for the first time and a greater range of textiles. But Cuba’s largest exports to other countries like rum, tobacco, exotic fruit, and honey have yet to make it to the U.S. market due to the continuing embargo.

Isis Salcines runs a 125-acre or 300 hectare organic cooperative farm called Vivero Alamar. 140 people work here.

ISIS SALCINES: I need tools, I need implements, I need infrastructure for support.

AMY GUTTMAN: Is the trade embargo the obstacle here to developing that land?

ISIS SALCINES: when you have 300 hectares, and you have a pair of oxen. We need tractors.

AMY GUTTMAN: American trade delegations regularly visit the farm, which raises cows and grows lettuce, sugarcane, and Moringa trees, whose leaves are packed with protein, calcium, and other nutrients.

ISIS SALCINES: You can eat the leaves, the flower, everything. Has more calcium than milk, more protein than meat.

AMY GUTTMAN: Without modern tools, the farm uses arduous techniques. For example, it doesn’t have PH meters to test whether the soil is too acidic or alkaline, so workers count out 100 worms before placing them in the ground for a few days. If the majority survive, the PH levels are good.

So what are some of the things that you would buy from the American market if you were able to import them?

ISIS SALCINES: Any supplies, the more simple things. The gloves for the workers, the shoes, the boots, the irrigation system. I need everything.

AMY GUTTMAN: How much could you increase your production here at this farm if you had a few of the things on your wish list, PH meters as an example?

ISIS SALCINES: I think that maybe between 20 and 30 percent.

AMY GUTTMAN: Since Raul Castro succeeded his brother, Fidel, as President in 2008, the Cuban Government has taken small steps away from Communist dogma that defined its Revolution…softening the state monopoly on distributing agricultural goods, allowing Cubans to own their homes, and permitting them to run their own shops and restaurants.

Despite an increase in small businesses, greater access to the Internet and other changes here, Cubans I’ve spoken to fear the path toward trade with the United States isn’t developing fast enough.

HUGO CANCIO: As an American businessman, I’d like to see, and as a consultant for some American companies, I would like to see more progress.

AMY GUTTMAN: Hugo Cancio fled Cuba for Miami with his mother and sister in 1982, when he was just 16. In the 1990s, when the U.S. and Cuba let Cuban-Americans visit relatives on the island, Cancio set-up a travel agency in Miami. Today, he also publishes the English-language bi-monthly magazine “On Cuba,” with offices in Havana.

HUGO CANCIO: I have been focused 100 percent on Cuba. I’ve put all of my emotions and energy into this whole process that we’re experiencing today.

AMY GUTTMAN: Cancio says in the past year, the arrival of Western Union in Cuba and the approval of commercial airline flights from nine American cities has made it easier for Cubans to access cash. In addition, remittances from friends and family in the U.S. hit a record $3.3 billion last year. With travel restrictions eased, Americans spent more than a billion dollars in Cuba in the first six months of this year, the number of U.S. tourists nearly doubled.

To meet the growing demand, American and international hotel chains are building or remodeling properties, typically co-owned by the Cuban government, like the La Manzana complex near Old Havana.

HUGO CANCIO: This park represents the old and the new, and I think will continue to do so.

AMY GUTTMAN: And now, it’s the foreground for the many cranes and building works going on.

HUGO CANCIO: Cranes mean prosperity, you know, something’s brewing in the economy. There are companies that used to be here prior to 1959 whose properties and businesses were nationalized or confiscated or expropriated, and they’re willing to forgive and forget their claims against the government to be the first one to get in here. It’s taking a bit too long and people are readjusting their expectations.

AMY GUTTMAN: American companies expecting to do business in Cuba exhibited at Havana’s annual International Business Fair in October, including General Electric and NAPA Auto Parts. They join a queue of foreign companies from Canada to China that have been investing in Cuba for decades. Cancio warns the Cuban Government is cautious to avoid the over-dependence on America that helped fuel the revolution.

HUGO CANCIO: Remember, part of the whole process that led to the Cuban Revolution was the fact that back in 1959, the Cuban economy was in the hands of American businesses and American interests. That Cuba is not coming back.

AMY GUTTMAN: Despite that concern, Ricardo Torres, an Economist at the University of Havana’s Center for the Study of the Cuban Economy, says the U.S. and Cuba are natural trading partners.

RICHARD TORRES: Culturally speaking, those two countries are much closer than probably other countries and the fact there are almost two million Cubans living in the United States, means that there is a powerful force out there that will, you know, stick the two countries very close.

AMY GUTTMAN: Is there any concern that interest from foreign investors will wane if it takes too long?

RICHARD TORRES: Yes, there might be a problem with that. We need facts to tell people that we are ready and we are open for business.

AMY GUTTMAN: Torres says Cuba’s crumbling infrastructure is an area ripe for deals with American investors.

RICARDO TORRES: I think there are billions of dollars to be invested in that sector over the coming decades. We are talking about roads, we are talking about railroads, we are talking about airports, talking about ports, we are talking about telecommunications.

AMY GUTTMAN: Torres points to the special economic zone established at the Port of Mariel, an hour outside of Havana, which has drawn foreign investment mainly from Brazil and Singapore. It’s a state of the art deepwater port with huge container terminals and warehouses.

Port officials from several American states have been making visits here. Already, government officials from Virginia and Louisiana have made future agreements to facilitate trade between the U.S. and Cuba.

Those agreements envision ramping up imports and exports when the existing trade restrictions with Cuba are eased. Mariel port official Wendy Barroto says the Cuban Government has offered tax breaks, expedited permits, and built a monorail line to attract more foreign companies.

WENDY BARROTO: The total completion for this area is estimated in about 30 years.

AMY GUTTMAN: What industries are you hoping to attract here?

WENDY BARROTO: They are basically logistics services, pharmaceutical industry, biotechnology, and advanced manufacturing, with priority given to food processing and packing, and steel works.

AMY GUTTMAN: While American companies wait for these deals to go through…Saul Berenthal is optimistic his tractors will one day plough Cuban soil. Berenthal says he understands why Cuba has been slow to trust the U.S.

SAUL BERENTHAL: The difficulty lies between developing a trust with a country that on one side says we want to do business with you and on the other side has an embargo that forbids practically any activity in the business world.

AMY GUTTMAN: So you’re hopeful that eventually your tractors will come to Cuba.

SAUL BERENTHAL: In time, with the proper political changes that must be put in place, yes.

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