Yesterday, President Obama announced wide-ranging adjustments of US policy towards Cuba including opening an embassy in Havana. The Obama Plan involves a series of measures aimed at increasing trade between the two countries. The basic premise of the plan is to permit certain exports to Cuba, relax restrictions on financial transactions and repeal limits on remittances to the island. Secretary of State, John Kerry, will begin to implement the initiative. He is to “immediately initiate discussions with Cuba on the re-establishment of diplomatic relations with Cuba.”
The Obama Plan looks to open trade with Cuba in consumer communications devices and associated software, hardware and services. Additionally, US companies will be allowed more leeway to export “certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.” These changes are intended to make it easier for ordinary Cubans to have access to certain lower priced goods to improve their living standards and gain greater economic independence from the state. The US business community, however, recognizes the potential economic benefit of these changes to their balance sheets and is eager to expand business ties with Cuba. Everyone from manufacturers of heavy equipment to the travel industry and even major league baseball is encouraged by the news.
Manufacturers of heavy equipment in the construction and agricultural industries immediately endorsed President Obama’s announcement. Bill Lane, Caterpillar Inc.’s director of global government affairs said: “Caterpillar’s been calling for a new policy toward Cuba for more than a decade. And we believe engagement’s a powerful force in change and we’re hopeful this will cascade into a positive change in Cuba.” He adds, “Based on actions from the business community in the past…I think you’re going to find the business community nearly unanimous on this move and will be very supportive.” Similarly, Ken Golden, a spokesman for Deere & Co. said: “There is a need in Cuba, as there is around the globe, for productive, modern machinery to help feed, clothe and shelter the world’s rapidly increasing population. Cuba is a potential market for John Deere products and services. We look forward to serving customers in Cuba as we do throughout Latin America and around the world.”
Jet Blue, which currently operates three weekly charter flights to Cuba, also recognized the opportunity for increased business: It’s too early to assess the implications of the change in policy, and we wouldn’t want to speculate, but we certainly are interested in the opportunities. Below is our statement regarding the recent announcement from the White House. . . ‘We recognize the potential demand for more travel options among people who need to travel between the U.S and Cuba. We would be interested in further expanding the successful charter program we’ve operated into Cuba over the last three years.’”
Finally, Major League Baseball added: ”Major League Baseball is closely monitoring the White House’s announcement regarding Cuban-American relations. While there are not sufficient details to make a realistic evaluation, we will continue to track this significant issue, and we will keep our Clubs informed if this different direction may impact the manner in which they conduct business on issues related to Cuba.”
The President’s initiative has stirred American business to rapidly engage the Cuban marketplace. However, the US embargo will remain in effect until the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, also known as the Helms-Burton Act, is lifted by Congress. The Helms-Burton Act will continues to hinder trade with Cuba. The Obama initiative will be limited to certain amendments to Treasury and Commerce Department regulations governing exports, banking and travel between the two countries. The Treasury Department will change its regulations to allow banks to set up accounts in Cuba, and give US citizens the ability to use their credit and debit cards in the island. The Commerce Department will modify its rules to allow cellphones, hardware and software to be exported to Cuba, as well supplies, equipment and tools for private sector construction and agriculture.