International Business

Amid U.S.-Cuba talks, Cuban trade minister lunches at White House

U.S. Commerce Secretary Penny Pritzker, left, and Cuban Minister for Foreign Trade Rodrigo Malmierca, sit for a photo opportunity, in Havana, Cuba, Wednesday, Oct. 7, 2015. The two met again 2/17/2016 during Malmierca’s visit to Washington.
U.S. Commerce Secretary Penny Pritzker, left, and Cuban Minister for Foreign Trade Rodrigo Malmierca, sit for a photo opportunity, in Havana, Cuba, Wednesday, Oct. 7, 2015. The two met again 2/17/2016 during Malmierca’s visit to Washington. AP

During a week in which the United States and Cuba were trying to figure out how to do business with each other, Secretary of Commerce Penny Pritzker took the Cuban foreign trade minister to lunch Wednesday at the White House.

“I don’t think a Cuban official has had lunch at the White House in 60 years,” Pritzker said in an interview with the Miami Herald.

But that is the kind of week it’s been with Rodrigo Malmierca, Cuba’s foreign trade and foreign investment minister, not only lunching at the White House but also getting a standing ovation Tuesday when he addressed the U.S. Chamber of Commerce. It was the same day U.S. Transportation Secretary Anthony Foxx was in Havana to sign a milestone U.S.-Cuba civil aviation accord that is expected to establish regularly scheduled flights between the two countries by fall.

Pritzker and Malmierca opened two days of technical talks Wednesday between U.S. and Cuba delegations. Called the regulatory dialogue, the talks are aimed at helping each country understand the other’s regulations, laws and economic systems so that businesses can take advantage of the Obama administration’s commercial opening toward Cuba.

The interest is there. Last year, Pritzker said, the United States issued 490 authorizations for U.S. companies to do business with Cuba that were potentially worth $4.3 billion. That’s a 30 percent increase over 2014, and in the first 40 days of 2016, the Commerce Department issued 28 authorizations potentially worth around $300 million in business.

Malmierca said Tuesday that senior-level delegations from at least 120 U.S. companies have visited Cuba since the rapprochement began.

During her opening remarks, Pritzker said that American companies are having trouble navigating the Cuban economic system so they can take advantage of opportunities permitted under the opening.

“To seize this moment and start building a relationship between our nations, it is important that we see concrete policy changes that make it easier for U.S. businesses to capitalize on our regulatory changes,” Pritzker said.

With the embargo still in effect, the Obama administration has outlined a series of new regulations since Dec. 17, 2014 — when the two countries announced they were normalizing relations — that allow American companies to sell to Cuba’s growing private sector, enter into partnerships with Cuban companies to improve Internet access and the telecom system, buy some products from Cuba’s private sector, open offices in Cuba and employ Cubans in approved categories of commerce.

While Malmierca said Cuba views the changes by the United State positively, “they are not sufficient in terms of lifting of the main obstacle that we still confront — that is the blockade [the Cuban term for the U.S. embargo against the island.]”

There are limits to regulatory changes the president can make using executive authority, but Malmierca said he thought Obama could do more, including allowing the dollar to be used in third-country transactions with Cuba and permitting the U.S. import of some of Cuba’s most iconic products, such as rum and cigars.

Pritzker said the changes undertaken by the United States “are not intended to foster a reciprocal response” from Cuba. But she told Malmierca that “without specific changes on your side that allow the private sector to engage, our changes will not unlock the opportunities for the Cuban people that both of us hope to see.’

Among the “impediments” for American businesses, she said, are the requirement that foreign companies hire Cubans through a state agency, problems reaching people in the Cuban government to discuss business opportunities and difficulties in accessing relevant Cuban laws and regulations.

Cuba’s lack of capacity to handle an onslaught of American business “is something we’re willing to help them with to the extent we can,” said Pritzker.

Malmierca said Tuesday that senior-level delegations from at least 120 U.S. companies have visited Cuba since the rapprochement began.

Pritzker said Malmierca told her that some economic reforms would be introduced at the 7th Communist Party Congress, which will be held in April, but told her the changes are “complex, hard to implement.”

“They’re studying what to do about the dual currency system,” said Pritzker. Most of the population is paid in Cuban pesos (CUPs) but foreign companies and visitors use the Cuban convertible peso (CUC) that is worth far more. Unifying the currencies, she said, would make Cuba more attractive for American business people.

Pritzker said that Malmierca also told her Cuba was moving toward more separation between state enterprises and the private sector and that there’s a place for both the market and foreign investment in the Cuban economy.

“The devil is in the details in all these things,” she told the Herald. But Pritzker said she believed that Malmierca is “signaling that they are willing to consider changes.”

Related stories from Miami Herald

  Comments