World Wires

In Cuba, international businesses abound - just not from the U.S.

 

McClatchy Newspapers

HAVANA — Leaving Jose Marti International Airport in this capital city, a billboard reminds vividly of the U.S. trade embargo on Cuba. It shows a noose with the phrase, "Blockade: The Longest Genocide in History."

The embargo, partially imposed in 1960 and fully in place two years later, is not a blockade. That's clear by the abundance of foreign goods and investment in Cuba.

It is a blockade, however, in the sense that U.S. companies are blocked from doing business in Cuba. That hasn't stopped their international competitors from Canada, Mexico, Brazil and even China from setting up shop.

It's striking when visiting the island just how much the rest of world now trades with, invests in and sends tourists to Cuba.

Just drive east from Havana on the Via Blanca highway along the northwestern coast and toward Varadero, the Cuban resort city where Europeans, Canadians and Brazilians frequently vacation. Even before you reach Varadero's beaches, there are plenty of reminders of globalization.

Near the town of Santa Cruz del Norte, China's Greatwall Drilling Co. is searching for oil in cooperation with the Cuban state oil company known as Cupet. Some workers sport red jumpsuits with the company's GWDC logo. Much of the machinery was made in Romania during the era of Soviet control over the East Bloc.

Chinese Vice President Xi Jinping, expected to become his nation's next leader in 2013, visited the joint venture in June. Greatwall has developed more than 63 wells in Cuba since 2005, the newspaper China Daily reported then.

Greatwall's parent company, the China National Development Corp., won a contract in 2010 to expand a Cuban oil refinery jointly owned with Venezuela's state oil company, PDVSA.

Just down the road from Santa Cruz del Norte, the Canadian flag flies in a joint venture between Cuba's state energy sector and Sherritt International Corp. Sherritt, one of the biggest foreign investors in Cuba, is involved in oil and gas drilling and financed expansion of a nearby gas-fired power plant.

And Spain's oil giant Repsol YPF in February began drilling in the ultra-deep waters offshore, about 30 miles northwest of Havana. Repsol and its Indian and Norwegian partners are drilling for oil about 5,600 feet below the ocean surface in the Strait of Florida.

Foreign firms are seeking opportunities in other business sectors, too. Up until 2004, U.S. farmers accounted for 36 percent of food aid to the island. Much of that involved exports of poultry products, corn and soybeans from the U.S. heartland. But the Bush administration tried to put further pressure on the Cuban economy by requiring more upfront cash from Cuba for imported food.

In 2008, the U.S. exported $710 million in farm goods to Cuba, a figure that fell to $347 million in 2011, according to the U.S.-Cuba Trade and Economic Council, a New York-based group that favors an end to the embargo.

Into the gap came Brazilian farmers, whose government provided looser terms and took much of the business.

Advocates of lifting the embargo say international companies have partnered with Cuba on a wide range of products, including Cuban cigars, rum, bottled water, fruit juices, port development, ice cream and cosmetics.

"Not to mention oil, which is the 800-pound gorilla that's about to walk into the room," said Kirby Jones, whose company, Alamar Associates, has been consulting and leading U.S. trade missions to Cuba since 1974. "Here's China, drilling for oil in Cuba."

McClatchy Newspapers 2012

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