CubaTrade-One-Flip

CUBA AFTER FIDEL: THE ECONOMIC IMPACT 

The Magazine for Trade & Investment in Cuba 

December 2016 

CAN U.S. AGRICULTURE LIFT 

THE EMBARGO? 

Inside the mission of Devry Boughner Vorwerk, 

Chair of the US Agriculture Coalition for Cuba 

RICE COUNTRY 

Arkansas’ Cuba play 

PIONEER PLASTIC 

US credit cards debut 

PHONE HOME 

Telephonic expansion 

IN FLIGHT 

Havana Air aims higher

GO GLOBAL 

MIAMI: Trade and Logistics Hub 

of the Americas 

Trade Assistance Center Services 

BUYER SERVICES: 

n Agent/ Distributor Services 

n Red Carpet /VIP Meetings 

n Trade Missions 

n Trade Show Assistance 

PRODUCT AND MARKET ASSESSMENTS: 

n Product Competitiveness Assessments 

n Market Research Reports 

n Product Sourcing 

n Customized Training Services

AMERICAS TRADE SHOWS: 

The World Trade Center Miami manages two hemispheric trade shows which draw more 

than 17,000 buyers to Miami. Upcoming shows include the 21st annual Americas Food 

& Beverage Show and the 14th Biennial Air Cargo/Sea Cargo Americas Trade Show and 

Conference. Reported sales at these shows exceed US$239 million. 

The World Trade Center Miami assists other global trade shows and organizations to 

access the Americas marketplace by providing sales assistance overseas and by 

bringing foreign buyer missions to trade shows. 

CHARLOTTE GALLOGLY, President 

1007 North America Way, #500, Miami, FL 33132 n 305-871-7910 n info@worldtrade.org 

www.worldtrade.org

content 12/2016 

UP FRONT 

10 PANORAMA 

Deals, events and transactions of note 

for trade and investment in Cuba 

12 INDEX 

The rise of cash and good transfers 

14 IDEAS + INNOVATION 

Tapping new talent, virtual Havana 

& wifi cubes for hotspots 

16 INTERVIEW 

The Impact of President-elect Trump: 

Our Q&A with James Williams 

18 TRANSITIONS 

The death of Fidel Castro, the election 

of Donald Trump, and the economic 

implications 

20 REGULATIONS 

Details of the latest round of reduced 

trade sanctions 

26 BIOMED 

New regulations mean Cuban drugs 

can be tested and imported 

28 ENERGY 

Cuba looks to renewable resources to 

energize its grid 

30 RECREATION 

In the wake of last year’s exemptions 

for U.S. sporting events in Cuba, 

Florida regattas have resumed their 

yacht races to the island 

38 LEGISLATION 

The next steps forward are already in 

the Senate, waiting for the House 

40 TRADE 

In a first crack to the embargo against 

imports, Cuban coffee has made it to 

the U.S. 

LIFESTYLE 

87 REPORTER'S NOTEBOOK 

The initial commercial flights to Cuba 

have been to provincial cities, far 

from Havana and far less expensive 

than the capital 

DEPARTMENTS 

22 TOURISM 

Only one U.S. cruise line has tested the 

water so far, but others are ready to go 

24 TECH 

A workaround Cuba’s internet 

limitations paves the way for precious 

market research 

32 BANKING 

For Americans who visit Cuba, cash 

has been a requisite. That is now 

changing, as credit cards begin to be 

accepted 

34 SCIENCE 

The key to protecting Florida’s sharks 

may lie in Cuban waters 

36 MANUFACTURING 

How a celebrated plan to build a U.S. 

tractor factory in Cuba failed to gain 

approval, and what happens next 

90 CUBAN ART 

Cuban artists born after 1980, unlike 

their predecessors, have no desire to 

leave the island. And why should 

they? Their work would lose its value 

94 EVENTS 

More than 3,500 exhibitors from 75 

countries converged in Cuba for the 

34th Havana International Fair 

FINAL WORD 

96 IN CLOSING 

A New Generation for Relations 

By Jodi Hanson Bond, 

Vice President, Americas, U.S. 

Chamber of Commerce; President, 

U.S.-Cuba Business Council 

4 CUBATRADE DEC 2016

How do we move food 

from Hastings to Havana? 

Break down barriers. 

When America farmers are able to freely 

export their crops to other countries, it 

nourishes the people who need them 

most. Opening new markets for US 

agriculture boosts food production, spurs 

job creation and puts food on more tables 

across the globe. That’s why we champion 

open trade flows – to raise incomes for 

all and build local economies that thrive. 

Learn more at cargill.com/food-security. 

Cargill is committed to helping the world thrive. 

© 2016 Cargill, Incorporated

features 

42 HAVANA AIR 

A Tale of the Long Game: How Havana Air took 

off to become the largest provider of passenger 

traffic to Cuba 

49 PUERTO RICO: U.S. BRIDGE TO CUBA? 

As the Caribbean island that the U.S. never left, 

Puerto Rico has existed in a kind of parallel universe 

to Cuba 

42 

54 AT&T CALL HOME 

With help from U.S. and Chinese companies, 

Cuban telephony gradually unfolds 

54 

60 SEEDS OF CHANGE 

The agriculture community in the U.S. wants the 

embargo against Cuba lifted, for the benefit of both 

the Cuban people and American farmers 

71 THE ARKANSAS REPORT 

With Governor Asa Hutchinson at the helm, 

Arkansas is leading the charge to open Cuban 

markets for U.S. commodities 

ON THE COVER 

Devry Boughner Vorwerk, chair, 

U.S. Agriculture Coalition for 

Cuba 

If you tell any farmer 

that they cannot sell 

to any market, that’s 

a real violation of 

their rights... 

60 


CONGRATULATIONS 

CUBA TRADE 

MAGAZINE 

Your vision will serve you well 

as you continue to forge ahead 

in this worthwhile endeavor. 

Our Cuba Task Force attorneys are uniquely 

positioned to assist clients with the legal 

and business opportunities following the 

changes in U.S. public policy toward Cuba. 

Established in 1910, Shutts & Bowen has witnessed 

and participated in almost every major event in 

Cuba’s history since the beginning of the 20th century. 

No other law firm in South Florida has this experience. 

“U.S. business owners need to understand 

the process and meet the requirements of 

U.S. and Cuban laws. We are happy to help 

them navigate through these new waters.” 

—Aliette DelPozo Rodz, Cuba Task Force Chair 

Shutts & Bowen LLP 

200 South Biscayne Boulevard | Suite 4100 

Miami, Florida 33131 

305.358.6300 

www.shutts.com 

FORT LAUDERDALE | MIAMI | ORLANDO | SARASOTA | TALLAHASSEE | TAMPA | WEST PALM BEACH

editors note 

Rise of the Pragmatists 

Welcome to the premiere issue of Cuba Trade magazine, the 

first publication entirely dedicated to the expansion of trade, 

commerce, and culture between Cuba and the United States. 

Each month Cuba Trade will present its readers the stories that 

reflect the business opportunities in contemporary Cuba—the 

challenges, the strategies, and the successes—along with daily online 

news briefs of the most important business developments. 

We are launching Cuba Trade at a particularly profound moment 

for U.S.-Cuban relations. With the death of Fidel Castro 

and the election of Donald Trump as the U.S. president, the possibilities 

for change now abound. Cuba is already one of the most 

interesting places in the world today. It is a nation in transition, 

with astonishing human capital and a global footprint far larger 

than its size. Now it is suddenly even more interesting. 

Anyone reading these words is aware that two years ago 

President Barrack Obama and President Raúl Castro renewed 

diplomatic relations between our two nations. It was a rapprochement 

long overdue, and one that holds great promise. We now 

have a new president-elect, and the potential for even greater 

change on both sides of the Florida Straits. 

It’s no surprise that many Americans and Cubans had hoped 

for a Clinton White House, assuming such an administration 

would continue the Obama policy of engagement. And it’s 

also no surprise that many people, both in Cuba and the U.S., 

are wary of the upcoming Trump presidency. We see the new 

administration as an opportunity, for multiple reasons. First and 

foremost, our new president is a pragmatist. Coming from a business 

background—and a campaign promise to increase jobs—Mr. 

Trump will most likely make policy choices that boost employment. 

This includes opening up trade with Cuba. 

It is also unlikely that Mr. Trump will pursue a Cuba policy 

that flies in the face of advances made by U.S. corporations, 

especially in the transportation and hospitality arenas. Another 

way to say this is that it will be difficult, expensive, and politically 

dangerous to reverse the momentum already achieved. 

Finally, we see an opportunity to advance the most important 

aspect of changing U.S.-Cuba relations—legislation to 

make the openings inaugurated by the Obama administration 

permanent. Let’s not forget that it has been Republican senators, 

congressmen and governors who have led the effort to rescind 

the embargo. Now, with both the House and the Senate—and 

the executive branch—in Republican hands, there is a real chance 

for legislation to pass. On the Cuban side, the passing of Fidel 

means that Raúl’s market-oriented reforms are more likely to be 

implemented by a rank-and-file who were previously restrained 

by intransigent ideology. Much like Trump, Raúl is a pragmatist 

more interested in results than rubrics. With the passing of 

Fidel’s long shadow, the two presidents are more likely to pursue 

a mutually beneficial opening. 

This magazine is dedicated to chronicling the evolution of 

that opening, to promoting a spirit of cooperation and mutual aid 

between two such close neighbors, and to showcasing the new 

face of Cuba as it engages with the business leaders and entrepreneurs 

who are pioneering this brave new world. H 

J.P. Faber. Editor-in-Chief 

Publisher 

Richard Roffman 

Editor-in-Chief 

J.P.Faber 

Managing Editor 

Michael Deibert 

Associate Editor 

Nick Swyter 

Writers 

Lee Ann Evans 

Sean Goforth 

Carlos Harrison 

Doreen Hemlock 

Larry Luxner 

Victoria McKenzie 

Art Director 

Jon Braeley 

Photographers 

Aaron Clamage 

Kirk Kennedy 

Tina Krohn 

Mark Matthews 

Matias J. Ocner 

Thos Robinson 

Production Manager 

Toni Kirkland 

Director, Corporate Relations 

Ana Soler 

Sales Executive 

Magguie Marina 

Research & Development 

Sydney Glanz 

Executive Publisher 

Todd Hoffman 

Cuba Trade Magazine is published each month by Third Circle Publishing, LLC, 

at 2 S. Biscayne Blvd., Suite 2450, Miami, FL USA 33131. Telephone: (786) 

206.8254. Copyright 2016 by Third Circle Publishing LLC. All rights reserved. 

Reproduction in whole or part of any text, photograph or illustration without prior 

written permission from the publisher is strictly prohibited. 

Postmaster: Send address changes to Third Circle Publishing, LLC, 2 S. Biscayne 

Blvd., Suite 2450, Miami, FL USA 33131. Subscription information domestic and 

foreign (786) 206.8254. Send general mailbox email and letters to the editor to info@ 

cubatrademag.com. BPA International Membership applied for December 2016. 

Cubatrademagazine.com Thirdcirclepublishing.com 


PANORAMA 

Deals, events and transactions of note 

for trade and investment in Cuba 

Photo by Jon Braeley 

Roaming kicks in 

U.S. telecom giants AT&T and T-Mobile 

have begun offering direct roaming 

services to Cuba. Both companies signed 

roaming deals with ETECSA, the Cuban 

telecommunications monopoly, earlier 

this year. 

Top US health official visits Cuba 

Secretary of Health and Human Services 

Sylvia Burwell met with Cuban Minister 

of Health Roberto Morales in Havana to 

sign an agreement to cooperate on cancer 

research. Burwell also attended a regional 

meeting on Zika, which Cuba has successfully 

contained. 

Historic UN vote 

In a first, the U.S. abstained from the 

annual U.N. vote condemning the Cuba 

trade embargo. Not a single country voted 

against the measure, and Israel was the 

only other country to abstain. The vote is 

mostly symbolic since only Congress has 

the power to lift the embargo. 

Portuguese president visits Cuba 

Portuguese President Marcelo Rebelo de 

Sousa visited Cuba to meet with President 

Raúl Castro. Rebelo de Sousa also met 

former President Fidel Castro at his 

home. According to Cuban state media, 

Rebelo de Sousa told Fidel Castro he is 

against the trade embargo. 

Loosened regulations 

In mid-October President Obama further 

eased restrictions on Cuba, including lifting 

limits on bringing rum and cigars into 

the U.S. Among other changes, the new 

rules allow Cubans and Americans to do 

joint medical research, Cuban pharmaceutical 

companies to apply for U.S. regulatory 

approval, and cargo ships to travel with 

more ease between the two countries. 

Clinical trials for cancer vaccine 

Buffalo’s Roswell Park Cancer Institute 

won FDA approval to conduct clinical 

trials for CIMAvax, a lung cancer vaccine 

developed in Cuba. While the vaccine 

does not prevent lung cancer, it has shown 

promise in stopping the growth of cancer 

cells. Clinical trials will begin by year's end. 

Debt payments on track 

Cuba paid the first $40 million installment 

of a $2.6 billion debt plan with the 

Paris Club of creditor nations. The money 

is owed to 14 wealthy countries who 

agreed to forgive $8.5 billion worth of 

Cuba’s debt late last year. The debt will be 

paid over 18 years. 

TripAdvisor gets the green light 

The Office of Foreign Assets Control 

(OFAC) has granted TripAdvisor a 

license to book Cuba flights and hotels. 

Under the license, TripAdvisor can book 

travel options that fall into one of the 12 

categories approved by OFAC, which do 

not include tourism. 

Investment portfolio released 

As part of the Cuba’s plan to attract 

more foreign investment, the country 

released its 2017 investment portfolio, 

which identified 395 projects requiring 

$9.5 billion in investments. High-priority 

sectors include agriculture, tourism, 

energy, and infrastructure. 


Cuban oil refineries take a hit 

The drop in Venezuelan oil shipments 

to Cuba has led to a Cienfuegos refinery 

cutting its production in half, the Miami 

Herald reported. According to Venezuelan 

state oil company PDVSA, crude shipments 

to Cuba were down 40 percent in 

the first half of 2016. Cuba has explored 

the possibility of processing Algerian, 

Russian, and Iranian crude. 

Japan, Russia strike deals 

Japan and Russia expanded economic 

cooperation with Cuba by signing deals 

during the Havana International Fair. 

Russia and Cuba will create a joint venture 

to produce storage batteries. Japan agreed 

to expand its economic links to the island. 

New era for Cuba-EU relations 

A deal to expand political and economic 

cooperation between Cuba and the 

European Union was announced during 

the Havana International Fair. The deal, 

which is set to be signed December 12, is 

expected to change the way the EU and 

Cuba negotiate economic cooperation and 

human rights. 

Cuban doctors to China 

Companies representing Cuba and China 

signed a letter of intent to send Cuban 

doctors to China. The letter also seeks to 

send Chinese patients to hospitals in Cuba. 

Unilever in Mariel 

British-Dutch consumer product giant 

Unilever has broken ground on a $35 

million toothpaste and soap factory in the 

Mariel Special Economic Development 

Zone. The factory is expected to create 300 

local jobs and start production in 2018. 

Mariel approved 11 business proposals the 

same week Unilever broke ground. 

Internet in private homes 

Cuba’s state-run telecommunications 

monopoly ETECSA announced a plan to 

install household internet into 2,000 Old 

Havana homes by the end of the year. The 

infrastructure for the project was installed by 

Chinese telecommunications giant Huawei. 

Nationwide military drills 

Almost immediately after Donald Trump 

won the U.S. presidential election, the Cuban 

government announced it would hold 

five days of nationwide military exercises. 

The Cuban government did not link the 

exercises to the results of the election. 

New restaurant licenses suspended 

Havana’s city government temporarily 

stopped issuing licenses for new private 

restaurants, otherwise known as paladares. 

According to state media, the move is in 

response to paladares violating regulations. 

Paladares are required to buy their supplies 

at state-run markets and limit their seating 

to no more than 50. 

Ballet diplomacy 

Misty Copeland, the first African 

American woman to be a principal dancer 

at the American Ballet Theatre, visited 

Cuba as a U.S. State Department’s sports 

and cultural envoy. Copeland participated 

in dance clinics with Cuba’s cultural 

institutions during her trip. 

The Simpsons go to Cuba 

Reflecting the growuing awareness of 

Cuba by the average American, TV’s most 

iconic animated family ventured to Cuba 

to find Abe Simpson free medical care. 

Abe never received the care he needed in 

the episode, but riding a 1950s car lifted 

his spirits. 

Cuba highlights trade opportunities 


countries participated at the 34th 

annual Havana International Fair at 

the beginning of November, the largest 

general-interest trade fair in Cuba. At the 

start of the fair, Cuba’s Minister of Foreign 

Trade and Commerce Rodrigo Malmierca 

Diaz announced that the Cuban economy 

will not grow significantly in 2016. 

Leaders of Canada and Vietnam visit Cuba 

Canadian Prime Minister Justin Trudeau 

and Vietnamese President Tran Dai 

Quang visited Cuba in November to discuss 

trade and other issues with President 

Castro. Justin Trudeau’s father, former 

Prime Minister Pierre Trudeau, was the 

first NATO leader to visit the island after 

the revolution. H 

DEC 2016 

CUBATRADE 

11

INDEX 

THE RISE OF CASH 

& GOODS TRANSFERS 

By Nick Swyter 

REMITTANCES RULE THE CUBAN ECONOMY 

Main sectors of the Cuban economy (in millions of dollars, 2014) 

FASTEST GROWING REMITTANCE MARKET IN LATIN AMERICA 

Annual remittances to Cuba (in millions of dollars) 

3500 

3000 

2500 

2000 

1500 

1000 

500 

Exports-Sugar 

Exports-Tobacco 

Exports-Medicines 

Exports-Nickel 

0 

Tourism Sales 

Remittances-Cash 

Remittances-Goods 

1,447 

2008 

0 500 1000 1500 2000 2500 3000 3500 4000 

0 500 1000 1500 2000 2500 3000 3500 4000 

2009 

2010 

2011 

2012 

SOURCE: Havana Consulting Group 

2013 

2014 

3,354 

2015 

SOURCE: Havana Consulting Group 

Even after Cuba legalized the U.S. dollar in 1993, 

restrictions on money transfers made it difficult for 

Cuban families to receive assistance from relatives in the 

U.S. More than two decades later, loosened restrictions 

have helped make remittances one of the most valuable 

sectors of the Cuban economy. 

According to the Havana Consulting Group, cash 

and material remittances sent to Cuba in 2014 were 

worth $6.63 billion—about half of it in cash. The gross 

earnings from Cuba’s tourism sector and four most 

valuable material exports (sugar, tobacco, medicines and 

nickel) were, by comparison, valued at $5.17 billion. 

Those gross earnings are worth even less after subtracting 

production, operating, and commercialization costs. 

From 2008 to 2014, Cuba’s remittances grew by 

116.2 percent, the biggest increase in Latin America. 

Nonetheless, Cuba is only the seventh largest remittance 

market in the region, surpassed by Mexico, Guatemala, 

the Dominican Republic, El Salvador, Colombia and 

Honduras. Should Cuba maintain its growth rate, 

however, it will become the third largest remittance 

market in Latin America within five years. 

There are several reasons for Cuba’s growth, 

but President Obama’s decision to loosen travel and 

remittance restrictions for Cuban-Americans is perhaps 

the most significant. Some of the most recent reforms 

came in September 2015, when the U.S. lifted its $2,000 

per quarter limit on cash transfers (typically done via 

Western Union or through third-country banks). The 

$10,000 limit that travelers could carry to Cuba was also 

lifted. Since 2009, authorized Cuban-Americans have 

been able to travel to the island as many times per year as 

they wish. 

Increased migration levels have also lead to more 

Cubans sending money home. Some 90,000 Cubans 

have left the island since the U.S. and Cuba restored 

diplomatic relations in December 2014. According 

to Florida International University’s 2016 Cuba Poll, 

younger Cubans and more recent arrivals in Miami are 

more likely to send money home. H 


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IDEAS + INNOVATION 

Tapping New Talent 

In an effort to incubate tech startups in 

Cuba, a coalition of foundations, schools 

and corporations awarded 10 promising 

entrepreneurs with a package of prizes to 

help accelerate their efforts. Organized 

by the Cuba Emprende Foundation, 

CubaNow and others, and with corporate 

sponsors American Airlines, Dell/ 

EMC, iTutorGroup and Rackspace, the 

contest drew 88 applications from across 

the island (see map). Winners included 

startups building apps for dining, advertising, 

bed and breakfasts, private products, 

and art events. Each will receive a package 

of technology products and all-expensepaid 

immersion trips to the U.S. valued 

at about $10,000. “The initiative is to 

connect the tech community in Cuba with 

the start-up community in America, to 

strengthen the tech ecosystem in Cuba,” 

says John McIntire, chairman of the Cuba 

Emprende Foundation. To learn about the 

winners, visit www.10x10kCuba.com 

–J.P. Faber 

Image courtesy of 10x10kCuba 

The Mother of Invention 

This year marked the inaugural London 

Design Biennale at Somerset House, in 

which 37 countries and territories presented 

ideas and solutions exploring the theme 

“Utopia by Design.” One of the more tangible 

ideas came from the Cuban design 

duo Luis Ramírez and Michel J. Aguilar, 

whose inspired response to the digital 

explosion in Cuba was a highlight of the 

show. The project, ParaWifi, proposes 

biodegradable plastic cubes that can be 

easily assembled in various arrangements 

in wi-fi hotspots. The idea is to create safe 

and protected digital oases; with Astroturf 

seats, fans in the ceiling and charging jacks 

(powered by solar panels in the roofs), the 

cube is surprisingly comfortable and private. 

In an ironic twist, the cube was also 

the only place in Somerset House that 

provided access to their wireless network, 

thus replicating the experiences of many 

Cubans. Learn more at www.facebook. 

com/parawifi.cuba/ –Lily Faber 

Image courtesy of Luis Ramirez 

Virtual Havana 

Anybody with an internet connection 

can now take a virtual tour of Havana, 

thanks to a high-tech startup that 

recently mapped the places where 

Google Street View cars won’t be driving 

anytime soon. Sweden-based Mapillary 

armed a team of 11 volunteers with 

360-degree cameras, smartphones and 

selfie sticks. Over the course of four 

days, the volunteers walked, cycled and 

drove through Havana to photograph 

hundreds of miles of the city’s streets. 

They then used the Mapillary app to 

stitch together thousands of photos into 

a free interactive map of the city. “Local 

citizens have not necessarily had access 

to updated maps for their city for some 

time, but we’re hoping to change that,” 

Claudio Cossio, Mapillary’s head of user 

growth in Latin America, told Cuba 

Trade. Check out www.mapilllary.com 

–Nick Swyter 


American wheat 

growers stand ready 

to meet demand 

in Cuba. 

It’s time to end 

the embargo.

INTERVIEW 

A Q&A with James Williams: 

The Impact of 

President-Elect Trump 

Nonprofit national coalition Engage Cuba has 

quickly become a major force in the effort to lift 

the embargo against Cuba, creating 

pro-engagement councils now in 15 U.S. states. 

We spoke with its president, James Williams, on 

the impact of Trump’s election as president. 

CUBA TRADE: Many observers are 

pessimistic about lifting the embargo in 

the near future because of what Presidentelect 

Donald Trump said in the final 

weeks before the election. Do you share 

that pessimism? 

WILLIAMS: I don’t. One thing we saw 

with this election, the number one concern 

of voters, was jobs and the economy. 

That’s the mandate that sent Mr. Trump 

to Washington, along with an anti-establishment 

wave. When you think of something 

that personifies the failed policies of 

the establishment, it’s the Cuba embargo. 

Lifting it is something he could to do end 

a failed policy and bring jobs back to the 

U.S. economy. It seems like a win-win. 

WILLIAMS: I think it would be difficult. 

There is broad support from the business 

community [for the openings], and even 

from the Cuban community. Americans 

are voting with their feet by getting on 

planes to Cuba. The idea that it’s going to 

be rolled back is not only unlikely but unpopular. 

It would serve no interest, neither 

here nor in Cuba. We are optimistic that it 

[a roll back] will not occur. 

CUBA TRADE: In the end, as your 

organization realizes, this is going to be a 

legislative issue. Helms-Burton must be 

reversed by Congress. Do you think we are 

making progress there? 

James Williams speaking at a press conference in Jackson Mississippi 

WILLIAMS:There will be a small and 

shrill minority who will continue to support 

the embargo. But that is the past. The 

American and Cuban people are moving 

forward. [Continuing the embargo] is 

the personal agenda of a few members of 

Congress and that’s wrong. The Senate 

wants to move forward and we are close in 

the House. 

Photo by Madeleine Russak 

CUBA TRADE: President Obama made 

a concerted effort to make his openings 

‘irreversible.’ We know that is not the case 

with executive orders. Nonetheless, how 

hard do you think it would be to reverse 

the momentum? 

WILLIAMS:This is one area where we are 

most excited about the election results. We 

gained four new pro-engagement Senators, 

and more than 10 pro-engagement 

House members, including Republicans 

and Democrats. People are looking for 

places where there is common ground to 

move the country forward, and this is a 

great place to start. 

CUBA TRADE: What about vocal Congressional 

supporters of the embargo, like 

Paul Ryan, Bob Menendez, and Marco 

Rubio? 

CUBA TRADE: What about the ‘lame 

duck’ session of Congress? Any chance 

that the amendment by Sen. Boozman 

(R-Ark) to the spending bill [to loosen 

restrictions on financing agricultural 

trade] will go forward? 

WILLIAMS: This is an area where 

it is a real no-brainer. If you look at 

the communities that propelled Mr. 

Trump’s victory, that’s who this bill is 

designed to help. This is for American 

farmer. I see no reason why it shouldn’t 

move forward. H 


BEFORE THE EMBARGO, 

Cuba was the top 

destination for our rice. 

LET’S GET THERE AGAIN.

TRANSITIONS 

ENDINGS AND BEGINNINGS 

(Photo by Javier Galeano | AP) 

Late on the evening on Friday, 25 November, 

Cuban President Raúl Castro, 

dressed in military fatigues and his 

voice cracking with emotion, took to 

the island’s state television network to 

announce the death of his brother, Fidel. 

For nearly six decades, the figure 

of Fidel Castro remained omnipresent 

on both sides of the Straits of Florida. 

In Cuba itself, he was the Maximum 

Leader who, after overthrowing dictator 

Fulgencio Batista in 1959, fashioned 

Cuba into a Communist state and ally 

of the Soviet Union. After the latter’s 

collapse and the uniquely painful período 

especial, Fidel gingerly began a reengagement 

process with the rest of the world, 

where he continued to play an outsized 

role. For his relentless head-butting with 

the United States, he was regarded as 

a hero by those Latin Americans who 

resent the U.S. influence on hemispheric 

affairs. In Miami, however, site of the 

world’s largest exile Cuban population, 

he was regarded less fondly as a dictator. 

For many, the preeminent question 

now is what effect his passing will have 

on the economy of Cuba and its ongoing 

rapprochement with the United States. 

In this April 19, 2011 file photo, Fidel Castro raises his brother's hand, Cuba's President Raul Castro. 

Raul announced Fidel's death late Friday, Nov 25, 2016, on state television. 

First and foremost, the death of 

Fidel Castro is of enormous symbolic 

importance. There has rarely been a 

national leader so thoroughly identified 

with the country he ruled. His death, 

however, is unlikely to have a major 

impact of current Cuban economic policies—except 

perhaps to accelerate them. 

Gravely ill for a decade, Fidel Castro 

ceded the day-to-day running of the 

country to Raúl in 2008, and the latter 

quickly ushered in changes that would 

have been all-but-unthinkable under the 

long-serving leader. Since then, Raúl 

has overseen a dramatic expansion of 

the private sector, with a half-million 

Cubans now licensed to run small businesses 

as independent cuentapropistas, 

in professions ranging from mechanics 

and barbers to cab drivers and restaurant 

operators; in his 2011 policy announcements, 

he set a target of transitioning 

the nation’s economy from complete 

state domination to 40 percent private 

enterprise. 

There have been numerous other 

reforms under Raúl, including the legal 

use by Cubans of cellphones and DVDs, 

the expansion of foreign investment and 

joint ventures, the spread of internet access, 

and permission for farmers to form 

private coops and to sell excess production 

on the open market. Moreover, it 

was Raúl who embraced the resumption 

of normal relations with the U.S. 

government in 2014, which has since 

resulted in a dramatic expansion of U.S. 

tourism to the island as well as access by 

commercial U.S. airlines. 

While this economic opening was 

being painstakingly shepherded in by 

Raúl Castro, Fidel had no hesitation 

when it came to questioning the opening 

and its motives, and to lob verbal volleys 

at President Barrack Obama and those 

in favor of injecting limited capitalism 

into the Communist model. 

Now, with Fidel gone, Raúl may 

have considerably more leverage to 

push forward with his market-oriented 

reforms. Especially in recent years, 

Raúl has made no secret of his frustration 

with the pace of change. As U.S. 

citizens know all too well, entrenched 

bureaucracies are resistant to change. In 

the case of Cuba, Fidel’s long shadow 

was a powerful support to those within 

the Cuban government, especially the 


The death of Fidel Castro and the election of Donald Trump: 

What they mean for the Cuban economy 

By Michael Deibert 

old guard, who were opposed to market 

reform and a warmer relationship with 

Washington. Now, reformers within the 

government should gain new traction. 

Fidel Castro’s passing, of course, 

takes place amid another political 

earthquake: The shock of Donald J. 

Trump’s victory over Hillary Clinton in 

this year’s U.S. presidential race. Though 

More than ever now, the 

U.S. should continue to 

expand its trade relationships 

with Cuba and allow 

our private sector to play 

and important role in 

shaping what happens." 

Trump spent most of his campaign 

declaring his support for lifting the 

embargo, in his final weeks of campaigning 

he declared that he would 

reverse president Obama’s initiatives to 

ease restrictions. More recently, Trump’s 

appointment to his transition team of 

In this November 30, 2009 photo, people walk past a poster of 

Fidel Castro on the streets of Old Havana 

Mauricio Claver-Carone, viewed as a 

hardline opponent of any détente with 

the government in Havana, was viewed 

as a worrying sign for continuing the 

“new approach” fostered by Obama and 

Raúl Castro. 

Nevertheless, as Raúl Castro enters 

the twilight of his political life (he is 

85 years old and has said publicly that 

he will step down as Cuba’s president 

when his current term ends in 2018) and 

Trump enters the White House, the 

signals are far from universally negative. 

With the passing of Fidel, the greatest 

political focal point for anti-Castro 

politicians and sentiments in the U.S. 

disappears, perhaps opening the way for 

a more pragmatic and less ideological 

dialogue. 

On the U.S. side, though many of 

Obama’s policy changes came in the 

form of executive actions, many of the 

most prominent came under the aegis of 

regulatory changes, such as allowing direct 

commercial flights and easing travel 

restrictions. As these changes fall under 

the jurisdiction of a host of government 

agencies—including the Departments 

of Commerce, Transportation and 

Treasury—their reversal is not a facile 

flick-of-a-pen fait accompli. Add to that 

the priorities of a president who ran on 

a platform of providing jobs to American 

workers, now faced with the task of 

reversing the efforts of U.S. businesses 

to grow their commercial operations. 

And, despite the hostility of some 

Republican congressmen and senators 

to any normalization of relations with 

Cuba, the Republican party is far from 

unanimous in its opposition to lifting 

the embargo. “With the passing of Fidel 

Castro, America now has the opportunity 

to help influence the direction 

of Cuba in helping lead her people to 

a better future,” Rep. Rick Crawford 

(R-Arkansas), told Cuba Trade. “More 

than ever now, the U.S. should continue 

to expand its trade relationships with 

Cuba and allow our private sector to 

play an important role in shaping what 

happens.” 

For his part, upon hearing of Castro’s 

death, Trump reacted by issuing a 

statement saying “Our administration 

will do all it can to ensure the Cuban 

people can finally begin their journey 

toward prosperity and liberty.” 

On the Cuban side, Raúl Castro 

appears to have groomed Miguel Díaz- 

Canel, the 56 year-old vice president 

of Cuba’s Consejo de Estado (Council 

of State), the 31-member ruling body 

of Cuba’s government, to succeed him. 

Díaz-Canel, born after the Cuban 

revolution, may not command the personal 

loyalty and exude the same gravitas 

as los hermanos Castro, but it seems 

unlikely that Raúl would have chosen 

him if he believed he would derail his 

reforms. 

After a lifetime spent speaking in 

public and dominating the thoughts 

of his countrymen, Fidel Castro’s exit 

was quiet and subdued. Those with an 

eye on Cuba, both domestically and 

abroad, will now wait to see what this 

highly symbolic milestone will mean for 

the country and its people. Regardless, 

the door that has been cracked open 

between Cuba and the United States, 

is unlikely to be slammed shut. H 

DEC 2016 

CUBATRADE 

19

REGULATIONS 

6 

And Now for Round 

What the Most Recent Round of Changes 

to U.S. Policy with Cuba Mean 

By Olga M. Pina and Alex Roe 

Since the resumption of relations between the U.S. and Cuba 

at the end of 2014, the executive office has issued six rounds of 

amendments further implementing a policy of opening trade 

and commerce between the two nations as well as promoting 

economic reform to grow the private sector in Cuba. 

Announced in October by the Office of Foreign Assets 

Control (OFAC) and further amending the Cuban Assets 

Control Regulations (CACR), these latest changes ease sanctions 

related to medicine, trade, investment, travel, humanitarian 

activities, and other activities. 

The changes continue to chip away at the barriers to commerce 

with Cuba and begin to create small openings—the most 

publicized being the end of limits to the importation of coveted 

Cuban cigars and rum by individual travelers, the most important 

being the opening of the U.S. market for the approval and sale of 

Cuban pharmaceuticals. 

HIGHLIGHTS OF SPECIFIC CHANGES 

Healthcare and Medicine 

Before the latest amendments, specific 

licenses were required for importing 

Cuban-origin commodities for research 

purposes in sample quantities only. The 

new amendments allow collaboration 

on medical research, importation of 

Cuban-origin pharmaceuticals, and the 

maintenance of Cuban bank accounts to 

facilitate research. 

Particularly noteworthy are changes 

allowing Cuban companies to obtain U.S. 

Food and Drug Administration (FDA) 

approval for Cuban pharmaceuticals—as 

well as authorization for the marketing, 

sales, and distribution in the U.S. of 

Cuban pharmaceuticals approved by the 

FDA. U.S. persons engaging in healthcare 

and medicince can also open bank 

accounts in Cuban financial institutions 

for authorized activities. 

Export-Related Transactions 

Exports (or re-exports originating from a 

third country) to Cuba have been expanded 

by dropping the requirement that such 

exports be “100% U.S.-origin.” Other conditions 

still apply to those transactions, including 

compliance with the Department 

of Commerce's Export Administration 

Regulations, limitations on the manner of 

payment for agriculture commodities, and 

that such transactions are NOT directly 

between a U.S.-owned or controlled firm 

in a third country and Cuba for commodities 

produced outside the U.S. 

20 CUBATRADE DEC 2016 

Vessel Transactions 

Foreign vessels that call on Cuban ports 

for trade purposes are no longer prohibited 

from entering U.S. ports for a specified 

duration, provided that they are carrying 

items permitted for sale to Cuba under 

the Export Administration Regulations. 

Contingent Contracts 

U.S. persons can now negotiate and enter 

into contingent contracts for transactions 

prohibited by CACR—so long as the 

execution of the contract is contingent on 

authorization being obtained or the transaction 

no longer requiring authorization. 

Importation of Cuban-Origin Merchandise 

The dollar limitation is now lifted on what 

U.S. persons can bring back from Cuba as 

accompanied baggage, including alcohol 

and tobacco products—provided the 

goods are for personal use. 

Travel 

The amendment authorizes U.S. persons 

to travel to Cuba for the purposes 

of attending or organizing professional 

meetings or conferences, and removes 

the requirement that the purpose of the 

professional meeting or conference not be 

for the promotion of tourism in Cuba. 

Remittances 

U.S. persons are now authorized to make 

remittances to third-country nationals so 

they can travel to, from, and within Cuba, 

provided that such travel would be authorized 

by a general license if the traveler 

were a U.S. person. 

Grants, Scholarships, and Awards 

OFAC added scientific research and 

religious activities to the categories of activities 

for which grants to Cuba or Cuban 

nationals are authorized. 

Services Related to Cuban Infrastructure 

U.S. persons are now authorized to 

provide Cuba or Cuban nationals with 

services related to developing, repairing, 

maintaining, and enhancing Cuban infrastructure, 

so long as they are authorized by 

the Department of Commerce. 

Other Amendments 

The definitions of prohibited officials of 

the Government of Cuba and prohibited 

members of the Cuban Communist 

Party have been narrowed, including for 

contracts, gifts and remittances. H 

Olga M. Pina is a partner in the Miami-based law 

firm Shutts & Bowen. Along with senior attorney 

M. Alex Roe, Pina is in charge of the Cuba practice 

at the firm.

TOURISM 

ONE IF BY SEA 

Only one U.S. cruise line has tested the 

water so far, but others are ready to go 

By Carlos Harrison 


Residents of Havana gave a warm welcome to the cruise ship Adonia 

One of the iconic moments of rapprochement 

between the U.S. and Cuba came 

last May, when the 704-passenger ship 

Adonia made port in Havana. As passengers 

disembarked, they were warmly welcomed 

by throngs of Cuban citizens, and 

hopes were high that the landfall augured 

a new era of seaborne tourists visiting not 

only Havana, but other ports of call such 

as Cienfuegos and Santiago. 

Flash forward six months, and Fathom, 

the Carnival Cruise Line subsidiary 

that embarked the Adonia from Miami, 

has now made a dozen fully-booked trips 

to Cuba. “Cuba as a destination holds 

great potential for Fathom since there is 

so much pent up demand to travel [there] 

from the U.S.,” says Tara Russell, President 

of Fathom. Nonetheless, it sails alone, 

at least from the U.S. 

Despite their eagerness to flood a 

nearly virgin market, however, none of 

the other cruise lines clamoring to carry 

Americans directly from ports in the 

United States to the once-forbidden 

island of Cuba have received permission 

from the Cuban government. “It’s clearly 

evident that the Cubans are not rushing 

into this,” says cruise industry expert 

Stewart Chiron. “They’ll do as much or 

as little as they want, and they don’t care 

what anybody thinks. They’re going to 

re-engage the world at their pace.” 

After Fathom’s maiden voyage other 

major cruise companies, including Royal 

Caribbean International and Norwegian 

Cruise Line, announced plans to follow 

suit –– only to pull back after failing to get 

the necessary permits. 

The month after Adonia’s first sailing, 

Royal Caribbean’s CEO said his lines’ trips 

could begin as early as July. It brought the 

1,840-passenger Empress of the Seas back 

from its Spanish subsidiary and reportedly 

spent $50 million refurbishing the ship for 

Miami-Havana voyages. 

At the end of July, it pushed bookings 

back to the end of October. “This is the 

right sized vessel for Cuba, and our intention 

is someday we will be going there,” 

Vicki Freed, Royal Caribbean's senior 

vice president for sales, trade services and 

support, said at the time. “We’re just still 

waiting for the nod.” 

Norwegian has been in the same 

boat. “I’m literally waiting for the phone 

to ring to get the final, final approval 

from the Cuban government,” company 

CEO Frank Del Rio said in July. But 

as of November, itineraries showed the 

Regatta, the ship it slotted for the Cuba 

trips, still floating around the island’s 

eastern end on a Puerto Rico, Grenada, 

St. Barts-plus voyage. 

“I’ve been writing about the cruise 

industry for 35, 40 years,” says U.K.- 

based industry analyst Tony Peisley. “For 

the entire 40 years, U.S. lines have been 

waiting for Cuba to open up. It would give 

such a huge boost to their business in the 

Caribbean.” It would also give a boost to 

tourism in Cuba, which has become a top 

priority for the Cuban government. And 

while cruise passengers typically spend less 

than land-based travelers, the cruise ships 

temporarily solve one of the bottle necks 

for the tourist sector—not enough hotel 

rooms to meet the demand. 

One reason Cuba may be holding 

back on allowing more cruises is for prac- 

Continued on page 25 

DEC 2016 

CUBATRADE 

23

TECH 

They could send emails and 

receive emails, but they 

couldn’t access the web…” 

Salvi Pascual, the founder of Apretaste 

Photo by Matias J. Ocner 

TAKING THE PULSE OF THE 

CUBAN MARKET 

A workaround of Cuba’s internet limitations 

is paving the way for precious market research 


One handicap that prospective investors 

in Cuba have is difficulty conducting 

consumer surveys. Now, a small Miami 

startup has market research based on 

thousands of Cubans who share their 

opinions on everything from the economy 

to the quality of high school education. 

That may not be noteworthy by American 

standards, but to gather this information 

the startup wiggled its way through Cuba’s 

spotty internet connectivity. 

Apretaste collects online survey 

responses through an app that now has 


more than 42,000 users; Cubans use the 

app because it allows them to surf the web 

via email. Among other things Cubans 

use the app to check the weather, read 

news, and even find dates. Salvi Pascual, 

the founder of Apretaste, says he built the 

app knowing that most Cubans—stymied 

by high prices, slow connectivity and 

government regulations—use the internet 

only for email. 

“They could send emails and receive 

emails, but they couldn’t access the web. 

So I built a platform where they can interact 

with the web by using their email,” 

Pascual told Cuba Trade. 

Here’s how the app works: Users write 

a command and a search term in the subject 

line of an email to apretaste@apretaste. 

com. For example, to do a Google search 

on Havana, users send an email with 

“google la habana” written in the subject 

line. In return, Apretaste sends back a message 

with the results of a Google search on 

Havana. 

By creating Apretaste, Pascual found 

a clever solution to connectivity issues. He

also found a clever way to connect to 

citizens. In early 2016, Pascual sent questionnaires 

on everything from his social 

networking platform to how many times 

a month blackouts happen. Within a few 

days, he had hundreds of responses. 

The results offer a rare data-focused 

examination of daily life on the island. 

They say how many Cubans are likely to 

have bank accounts and what kinds of 

goods they would like imported into the 

country, with data broken down by age, sex 

and province. 

“It’s really hard to get representative 

samples based on the traditional means, 

because Cubans don’t have cell phones or 

telephones in a systematic way,” said Ted 

Henken, a Baruch College professor who 

specializes in entrepreneurship in Cuba. 

Now, Pascual hopes businesses 

and organizations eyeing Cuba will use 

Apretaste to conduct market research. 

“They need more information in order to 

minimize risk,” he said. 

Of course, like all surveys, Apretaste’s 

approach has its drawbacks. Pascual and 

his team are limited to the 42,000 Cubans 

who use the app, only a small portion of 

the population that uses email. The app 

may also need to re-invent itself if the 

government adds more wi-fi hotspots and 

lowers the prohibitive $2 per hour price of 

using the web. 

Despite its drawbacks, Pascual is 

confident Apretaste can offer organizations 

information they can’t get elsewhere; 

his questionnaires reach every province 

of Cuba, including the isolated Isla de 

Juventud. They also don’t require approval 

from the Cuban government, a process 

that consistently bogs down expensive and 

time-consuming field research. 

“Even if there are obstacles, this is 

one of the few ways to get information,” 

Henken said. “Like they say: in the land of 

the blind, the one-eyed man is king.” H 

Amplifying mobile phone access 

Continued from page 23 

tical reasons of capacity. A tunnel under 

Havana harbor, for example, limits the 

draft of entering vessels. And the longest 

of three berths in the port terminal 

building is only able to handle a 662-foot 

boat. That means it can only fit smaller 

cruise ships, such as Fathom’s Adonia or 

Norwegian’s (actually Norwegian subsidiary 

Oceania Cruise’s) Regatta. 

That means bigger ships, like Royal 

Caribbean’s nearly 1,200-foot-long 

Oasis-class ships or Carnival’s 1,000-footplus 

Dream-class, would have to, at best, 

anchor off shore and transport passengers 

to the city and back on tenders. 

“You’d have to have an infrastructure 

for all kinds of things,” says Peisley. “It’s 

not just being at the dock, it’s what are you 

going to do with all the passengers when 

they get off. You’ve got 6,000 passengers 

getting off, where are they going to go? 

How are you going to look after them? 

None of that is really there. You don’t have 

enough guides, taxis, people to take the 

tourists around.” 

One U.S.-based company, 

InsightCuba found a way to deal with 

the limitations of Cuba’s ports, and 

turned it into a unique offering. It uses 

two smaller, luxury vessels: A 177-foot 

sailboat that can carry 42 passengers, 

and a multi-level megayacht with room 

for 72. Capitalizing on the ships’ smaller 

dimensions, Insight takes Americans 

to ports the larger ships can’t reach, 

with stops at places such as Isla de la 

Juventud, Trinidad, Cayo Largo, and 

Maria La Gorda. 

The ships, however, don’t depart 

The Adonia passes Moro Castle at the entrance to Havana Harbor 

from or return to U.S. ports. Travelers 

must meet the boats in Cienfuegos, 

Cuba. In the end, what will be required 

is investment in port infrastructure, 

something that can’t come fast enough 

for U.S. cruise lines. “In my opinion, 

Cuba is still failing to hear from international 

investors that in business time 

is money,” says Teo Babun, president 

and CEO of consulting firm Cuba- 

Caribbean Development. H 

DEC 2016 

CUBATRADE 

25

BIOMED 

A New Global 

Footprint for 

CUBA BIOMED 

There isn’t another product in 

the world that is as effective 

as Heberprot-P. It is unique. 

Jorge Valdéz Hernandez 

New regulations mean 

Cuban drugs can be 

tested and imported. 

Diabetes, hepatitis and 

cancer medicines could 

be among the first 

By Michael Deibert 

Photo by Nick Swyter 

In a semi-rural suburb of Havana, where 

cows graze dozily by the roadside, a 

complex of nondescript buildings houses 

Cuba’s Centro de Ingeniería Genética y 

Biotecnología, the nation’s most important 

facility for medical research and production. 

The biotechnological and pharmaceutical 

group, known universally by its 

acronym CIGB, is the largest subsidiary 

of the state-run BioCubaFarma, created 

four years ago; it currently oversees 31 

companies and 64 manufacturing facilities 

around the island. 

Until 1990, the country’s biomedical 

industry concentrated largely on producing 

cheap domestic knockoffs of existing 

products. After the collapse of the Soviet 

Union, however, an increased need for 

economic diversification prompted an 

aggressive push by Cuba to modernize its 

biotech industry. 

With manufacturing facilities in the 

Zona Especial de Desarrollo Mariel west 

of Havana, BioCubaFarma currently 

produces around 1,000 products sold in 

48 countries and has 2,000 patents and 

technology transfer agreements granted in 

a variety of nations including Brazil, India, 

Venezuela, and Vietnam. Now the group 

is seeking to expand into heavily-regulated 

markets such as the United States, Canada, 

Europe, and Japan. 


One of CIGB’s flagship medications 

is a breakthrough treatment for diabetes 

called Heberprot-P, which thus far has 

treated tens of thousands diabetic-foot 

patients in 26 countries and is in trials in 

Europe, where it is known as Epiprot. Trials 

to date suggest the drug can reduce the 

risk of amputation––an all-too common 

problem with diabetes––by up to 

75 percent. 

“It is a unique global product that has 

been proven to be very safe and effective,” 

Jorge Valdéz Hernandez, the CIGB’s 

vice director, told Cuba Trade during a 

recent interview in Havana. As he spoke 

in the facility’s conference room, a wall of 

monitors broadcasted video of workers in 

biohazard suits moving materials around. 

“It has been used on more than 

50,000 patients in Cuba, and more than 

250,000 patients on the international 

level,” he said. “Out of 1,000 patients that 

are treated, more than 750 won’t need 

amputation. There isn’t another product 

in the world that is as effective as Heberprot-P. 

It is unique.” 

Another of the CIGB’s high-profile 

endeavors is its partnership with French 

venture capital firm Truffle Capital, with 

which they formed Paris-based ABIVAX 

in an attempt to become a global leader in 

therapeutic vaccines and antivirals. Thus far 

their most promising product is NASVAC, 

a medicine designed to combat hepatitis 

B. “At this moment [NASVAC] is being 

coordinated for Phase 3 clinical trials in 

Europe,” says Valdéz. “Conversations are also 

being conducted with different American 

companies for the possible introduction of 

the product to the United States.” 

Other projects in the development 

stage by BioCubaFarma include CIGB 

500, a medicine designed for the treatment 

of heart attacks, as well as Heberferon, 

an injectable skin cancer medication 

that researchers hope will reduce tumors. 

Until recently, these and other drugs 

produced by Cuba’s biopharmaceutical 

industry have been off limits for U.S. 

patients. In its most recent round of regulatory 

changes, however, the U.S. Office 

of Foreign Assets Control announced 

that Cuban-origin pharmaceuticals could 

be put through FDA trials for approval, 

importation, and sale in the U.S. 

“This is very significant,” says Olga 

M. Pina, a partner in the Tampa office of 

Shutts & Bowen LLP. “It allows revenues 

to be produced for Cuba via exports [to the 

U.S.]. It could potentially be a big revenue 

source for them.” CIMAvax, a lung cancer 

drug developed by CIGB’s sister organization 

Centro de Immunologia Molecular, is 

already being tested in the U.S. H

Doing Business in Cuba - Market Entry - Partner and Joint Venture Development 

CUBA OPPORTUNITIES 

In-country executive visits with 

investment and partners meetings 

CUBA BUSINESS STRATEGY 

Consultation on industry targets in the 

newest emerging market of Cuba 

CUBA IMPLEMENTATION 

Set-up, legal processes, and 

business development in Cuba 

Kruger International, LLC is a Cuba consulting firm providing market research, sales channel 

execution, B2B in-country trips, and investment services for Cuba. Judy Kruger is Principal at 

Kruger International. Her clients range from small family-owned companies to multi-national 

firms who are eager to capture business in a new exciting emerging market. 

Judy Kruger 

Phone: 616-450-6925 

Email: Jkruger@kruger-international.com 

Website: www.kruger-international.com 

LinkedIn: https://www.linkedin.com/in/judykruger

ENERGY 

ALTERNATIVE ENERGY FOR CUBA 

With limited oil production, the nation looks 

to renewable sources to energize its grid 

By Victoria Mckenzie 

Photos by Thos Robinson 

This fall the “Energizing Cuba” 

conference, sponsored by the America’s 

Society and the Council of the America’s 

Cuba Working Group, was held in New 

York. The conference, a gathering of 

intellectual and economic luminaries, 

provided a detailed snapshot of the more 

than $4.2 billion in foreign investments 

Cuba is soliciting in the wind, solar, 

and bioelectric fields to modernize the 

country’s energy sector. Here are some of 

the insights from the conference. 

and this will be especially important as the 

country goes through energy shortages, a 

changing relationship with Venezuela, and 

a contracting economy. Of course, I think 

the elephant in the room is that…We 

still have our U.S. embargo towards Cuba. 

So that has implications not only for the 

energy sector, but also for the financing 

that is needed for these crucial energy 

projects. And so despite some regulatory 

loosening in this area, I think the embargo 

is obviously something important that we 

also need to keep in mind.” 

This is a problem, and we need to change 

it. The renewable energy sources only have 

4.5 percent [of the energy sector]. This is 

very low. The problem is trying to change 

this number… At this moment we have 

4.5 percent, but, in 14 years, we [hope to] 

multiply this number by 6, obtaining 24 

percent." 

Alana Tummino, Director of the Cuba 

Working group, AS/COA: 

“Cuba’s priority will be to raise foreign 

investment for these different ventures, 

Dr. Antonio Sarmiento Sera, Professor, 

Center for the Study of Renewable 

Energy Technologies (CETER), Higher 

Polytechnic University of Havana: 

“Ninety five percent of [Cuba’s] electricity 

comes from oil… and this oil comes 

half from Cuban oil and half from other 

countries [Ed. note: Cuba’s main supplier 

of oil is Venezuela’s Petróleos de Venezuela, 

S.A. (PDVSA) which has reduced exports 

to Cuba by at least 40 percent this year.] 

Carlos Fernandez-Avalli, Chief Strategy 

Officer, Cuba Strategies Inc.: 

“Cuba expects to have 780 megawatts in 

the next 14 years, and I think it set the 

pace for 14 years because they wanted 

to be realistic. If they can do it in three, 

they’d also be happy, because these 


investments correspond to what the 

grid can physically incorporate without 

becoming unstable. They said, ‘If we don’t 

have to change anything in the grid today, 

what is the renewable energy input that 

we can incorporate?’ And that has been 

one of the main criteria in establishing 

the 24 percent figure… The current 

installed capacity in Cuba for wind is 12 

megawatts, but there is a national wind 

energy program, so Cuba is out there 

buying wind turbines and developing 

projects…. They’ve awarded 322 

megawatts already to foreign investment 

projects, and there’s another 295 

megawatts to be awarded. This is the size 

of the already available opportunity since 

what was published in [the investment] 

portfolio in 2015… so in a way there’s a 

sense of urgency for those who want to 

use the Cuban opportunity….” 

A 

COUNTRY 

OF 

ELECTRIC 

ISLANDS 

An interview with CETER’s 

Dr. Antonio Sarmiento Sera 

Jorge R. Piñon, Director, Latin America 

and Caribbean Energy Program, University 

of Texas at Austin: 

“Energy is the engine of growth as far as 

the Cuban economy is concerned…We 

have to talk about energy security, we have 

to talk about energy reliability, we have to 

talk about efficiency, we have to talk about 

clean and sustainable energy, we have to 

talk about conservation––which by the 

way is a huge job that Cuba has done beginning 

in 2005. If there’s a country that’s 

conscious about savings and conservation 

of energy, it’s Cuba. Let’s hope that as the 

economy grows we can maintain that level 

of consciousness…We’re talking about 

secure, reliable, efficient, clean, sustainable, 

conservative, and competitively priced 

economy…Today Cuba consumes 140,000 

barrels a day of petroleum products, and 

68 percent of these petroleum products are 

heavy fuel oil, with 3.5 percent Sulphur, 

which is a very high pollutant…” H 

While at the Energizing Cuba conference in New York, Cuba Trade had the opportunity to 

speak with one of Cuba’s leading experts in the field of solar energy, Dr. Antonio Sarmiento 

Sera, professor at the Center for the Study of Renewable Energy Technologies (CETER) and 

member of the National Renewable Energy Group. CETER is one of at least a dozen working 

groups formed in Cuba following the Soviet collapse, when severe energy shortages spurred 

development of a National Energies Development Program and research into wind, solar, and 

bioelectric energy sources. 

“The CETER was created 24 years ago, and it came to be a center of research inside the 

Polytechnic University of Havana, dedicated to studies of new technology, especially renewable 

energy,” Sarmiento explained. “Because the oil that came from Russia had disappeared.” 

One of several institutions that has worked on the national development plan for Cuba’s 

renewable energy sector, CETER established a target of 24 percent inputs from renewables by 

2030, up from the current contribution of 4.5 percent. 

“[First we had to] calculate how much more energy we’ll need in 14 years,” says Sarmiento. 

“We’re going to have more industry, more tourism, more consumption, so we’ll need 30 percent 

more energy. The 24 percent attempts to meet that increase. If we need more energy, is 

the solution to look for more oil? No, we’ll look for more renewable energy, reduce [reliance 

on] oil, and improve efficiency.” 

Two of CETER’s most prominent programs involve solar (especially low-cost solar panels) and 

wind energy. Both have their advantages. While sun is available everywhere it “never lasts more 

than half a day,” says Sarmiento. Wind power is not limited to daylight hours, but is feasible 

only in the northeast of Cuba. The key strategy, says Sarmiento, is to patch the island’s relatively 

fragile power situation by decentralizing Cuba’s energy grid. 

“Sometimes, hurricanes would knock down the energy towers, and it could take days to fix. 

We’d be without electricity for a week,” he says. “The idea is to divide the territory into 

sections—here, have a plant that serves this region, here, a plant that serves a different region— 

to make 15 Cubas! Each province has the capability of working in isolation. We’re creating a 

country made up of electric islands, so that every section has independent energy.” H 

DEC 2016 

CUBATRADE 

29

RECREATION 

Racing to Cuba 

Photos Courtesy of Conch Republic Cup 

In the wake of last year’s exemptions for U.S. 

sporting events in Cuba, Florida regattas have 

resumed their yacht races to the island. 

By Doreen Hemlock 

Yachts from Key West approach the northern coast 

of Cuba during the Conch Republic Cup 

When Karen Angle sailed from Key 

West to Cuba’s resort city of Varadero in 

January, she wasn’t expecting what she 

found: A modern marina with quality 

docks, consistent electricity and water 

service, internet availability, and nearby 

hotels with rooms decked out in marble 

and stainless steel. 

Not every marina that Angle visited 

on her first trip to Cuba was quite so 

Karen Angle, executive director of 

the Conch Republic Cup 

up-to-date, yet overall, “the infrastructure 

was, amazingly, pretty good,” said the avid 

sailor. “It was far more advanced than I 

anticipated.” 

A forbidden destination for decades, 

the Caribbean’s largest island now is capturing 

the attention of the U.S. yachting 

community. New rules under the Obama 

administration eased maritime visits in 

September of last year, and U.S. ventures 

from racing groups to marina consultants 

are starting to tap the once off-limits 

market. 

Angle took part in the largest sailing 

race between the United States and 

Cuba since Obama liberalized yachting 

rules: The Conch Republic Cup. A Key 

West couple started the race in 1997 

without U.S. government approval and 

the venture was stopped under the Bush 

administration (they were arrested but the 

case was later dropped). Now authorized 

under rules that permit visits to Cuba for 

sporting events, the 2016 race featured 

60 boats with 435 people from some 25 

states and five countries––its biggest tally 

yet, said Angle, executive director for the 

organizing group. 

The Conch Republic Cup stopped 

first in the northern tourist hub of 

Varadero, where Cuba’s state company 

Gaviota recently built a new marina with 

French assistance, slated to top 1,000 slips. 

Next, the racers docked outside Havana 

at the iconic Hemingway Marina, built in 

the 1950s and now upgrading facilities for 

some 400 berths. 

In all, Cuba today still has fewer than 

2,000 slips at some 15 marinas, a small 

number by Caribbean standards, according 

to marina consultants. But the island 

has big plans to add another 20 marinas 

and at least 5,000 slips—including more 

berths in Varadero. 

That expansion will require significant 

foreign investment, but many investors 

are waiting first for Washington to end its 

embargo on Cuba. They want to make sure 

that in the long-term, Americans will be 

able to travel freely to Cuba, since visitors 

from the neighboring USA are sure to be 

the biggest source of traffic. 

There’s no denying the potential for 

U.S. boating. In addition to the Conch 

Republic Cup, regattas to Cuba in the past 

year have included races from Sarasota and 


THE VIP GUIDE 

Modern Facilities: The new 1,000-slip Marina Varadero 

In Poppa’s Shadow: At rest in Marina Hemmingway, just outside of Havana 

As soon as President Obama liberalized 

U.S. ties with Cuba, Maria Romeu saw 

her niche: Arranging yacht trips. 

Active with Cuba since the 1970s in 

cultural exchanges (including visits by Cuban 

bands to the U.S.), Cuban-American entrepreneur 

Maria Romeu had a strong network 

of contacts in her native land. In recent years 

she’d also built a solid base in yachting, serving 

first as assistant manager of a Miami Beach 

marina and then as crew on mega-yachts. 

Romeu immediately sensed the potential and 

flew to the island, met with yachting leaders, 

and within months partnered with specialist 

agency Cuba Tours and Travel to launch her 

new venture, Cuba VIP Yachts. 

In June, she welcomed her first client in 

Cuba: A U.S. family on a 147-foot yacht. The 

family flew to an airport in southern Cuba, 

met their boat there and enjoyed scuba-diving 

around the island, among other activities. 

Since then, Cuba VIP Yachts has welcomed 

vessels at marinas across the island, arranging 

for guests to partake in everything from 

swimming with dolphins to touring Havana in 

a 1950s convertible. 

Romeu’s VIP services don’t come cheap. 

They can run $2,000 to $5,000 per person 

per week, including meals, ground transport, 

lodging and special entry to museums, night 

clubs, shows and other spots in Cuba, like the 

restaurant San Cristobal where the Obamas 

dined. And that doesn’t include the cost of the 

yacht, should guests charter one instead of 

bringing their own. 

“This is a brand new market in Cuba,” 

Romeu says. “And with the right people on 

the ground, it can really take off.” H 

Miami. The St. Petersburg Yacht Club 

announced that it will resume its annual 

regatta to Havana in February 2017. The 

284-mile run from St. Pete to Morro 

Castle in Havana Bay originally ran from 

1930 to 1959. It aims to top the Conch 

Cup, with 70 sailboats participating. 

The regattas are just the tip of the 

iceberg, however. A University of Florida 

study estimates that 60,000 U.S. vessels 

over 25-feet long would visit Cuba in the 

first year after restrictions are fully lifted. 

(As recently as 2010, Cuba welcomed 

only about 2,000 foreign pleasure boats 

from all nations, officials said.) 

Already, Jose Miguel Diaz Escrich, 

the commodore of the yacht club at the 

Hemingway Marina in Havana, can 

quantify the impact of looser U.S. boating 

rules. He told Cuban media that in the 

first half of this year, membership at the 

Hemingway yacht club jumped by 195, 

including 164 new members from the 

United States. 

“Once this travel embargo is finished, 

it’s going to be a madhouse,” says marina 

consultant Richard Graves of Fort 

Lauderdale after a recent visit to the 

island. “There won’t be enough marinas to 

handle all the boats that are going to go 

to Cuba. And it will put a dent in boating 

in the Bahamas.” H 

Cuban VIP Yachts founder Maria Romeu 

Photo courtesy of Cuba VIP Yachts 

DEC 2016 

CUBATRADE 

31

BANKING 

For Americans who 

visit Cuba, cash has 

been a requisite. That 

is now changing, as 

credit cards begin to 

be accepted. 

CARD PLAY 

By J.P. Faber 

Prior to June of 2016, no credit cards 

issued by U.S. banks were accepted in 

Cuba. That was when the president and 

CEO of Florida-based Stonegate Bank, 

David Seleski, decided to become the first. 

“We’ve had about 750 people sign up for 

the card since then,” says the banker. “We 

did it as a convenience for our customers, 

and because it saves money when you 

make cash withdrawals in Cuba. But I had 

no idea of the reaction to come.” 

As the pioneer U.S. bank with credit 

cards usable in Cuba, Seleski became an 

overnight media celebrity, at least in the 

business world, with reports appearing 

everywhere from the Wall Street Journal 

and the New York Times to Forbes and 

CNBC. “We were getting phone calls 

left and right and media requests from 

everywhere. I don’t think anybody really 

anticipated Cuba being such a hot commodity.” 

In addition to being able to use the 

cards at an estimated 10,000 points of sale 

on the island, including major hotels and 

hotel restaurants, the Stonegate Master 

Cards can be used to withdraw cash—in 

Cuban currency—at ATMs in Havana. 

“There is still going to be a service fee of 

a few dollars, but you don’t have to pay 

the 10 percent,” says Seleski. As travelers 

to Cuba know, when you exchange U.S. 

dollars for Cuban CUCs, a 10 percent 

charge is taken off the top; this is the 

government’s fee for the expense of having 


I think we need 

more banks to get 

involved. It’s not 

healthy to have 

one bank that’s 

doing most of the 

heavy lifting... 

David Seleski, 

CEO of Stonegate 

to use foreign banks to deposit the dollars, 

since the U.S. Treasury Department will 

not allow Cuban banks to have accounts 

with U.S. financial institutions. 

“We still can’t send those dollars outside, 

we can’t use them for our payments 

and we can’t even change them to another 

currency,” Irma Martínez Castrillón, First 

Vice President, Central Bank of Cuba, 

explained at a recent U.S. Chamber of 

Commerce conference in New York. “For 

that reason alone our country has implemented 

the 10 percent [penalty on dollar 

exchanges].” Thanks to its direct—albeit 

one way—relationship with Cuba’s Banco 

Internacional de Comercio, however, 

Stonegate is able to avoid those charges. 

The good news is that Stonegate 

Bank no longer has to stand alone. In 

August, Banco Popular of Puerto Rico 

began issuing MasterCards that work in 

Cuba, with Florida-based Natbank (the 

U.S. subsidiary of parent National Bank of 

Canada) following suit in October. Even 

more significantly, predictions are that JP 

Morgan Chase, Citibank, Bank of America, 

and American Express will authorize 

their cards for use in Cuba by the end of 

this year, says John Kavulich, president 

Continued on page 35 

Photo by Matias J. Ocner

SCIENCE 

Swimming with the 

(Cuban) sharks 

The key to protecting Florida’s 

sharks may lie in Cuban waters 


Photo by Noel Lopez Fernandez 

Caribbean reef sharks swim in Cuba's Gardens of the Queen 

One of the attractions for tourists 

traveling to Cuba is the island’s pristine 

coastline, largely unscathed by the kind 

of development that nearby Florida has 

witnessed. Marine life in Cuban waters 

has flourished, including the ocean’s apex 

predator, the shark. 

Now Cuban and U.S. marine scientists 

are working together to conserve these 

hunters and their ecosystems, which are 

expecting strains from the influx of visitors 

and doubled-down efforts to find domestic 

oil reserves. According to the Environmental 

Defense Fund (EDF), some shark 

populations have declined by as much as 

90 percent of their original levels. 

Dan Whittle, Senior Director of the 

EDF’s Cuba Program, has been preparing 

for these threats for the last 16 years. 

He says about 20 percent of the world’s 

shark species live in or near Cuban waters. 

Long before the U.S. and Cuba restored 

diplomatic relations in 2014, Whittle was 

working under a Treasury Department 

license to team up with Cuban scientists 

for shark protection in the Florida Straits 

and the Gulf of Mexico. 

“Neither country working alone can 

sustain these migratory shark species,” 

Whittle said, which move freely across 

the Florida Straits and beyond, playing an 

important role as top predator in Cuban 

and American waters. 

Whittle is optimistic that Cuba can 

strike a balance between conservation and 

economic development. In 2015, the EDF 

helped Cuba finalize a national action 

plan to conserve sharks. The plan calls on 

scientists to track migration patterns and 

identify breeding areas. It also calls on 

fishermen to scale back shark fishing on 

vulnerable species and keep a detailed list 

of their catches. 

“We see good numbers of sharks in 

these places,” said Robert Hueter, senior 

Cuban and American scientists prepare to measure and tag a hammerhead shark 

in the Gulf of Babatano, Cuba 

Photo by Valerie Miller 


esearcher at the Mote Marine Laboratory 

in Sarasota, Florida. “They remind me of 

the places I dived in the 1970s.” 

For Hueter, Cuba is a fresh slate for 

conservation. With a national plan in 

effect, the country has a shot at addressing 

environmental threats before they become 

irreversible. “We have a really good 

opportunity to get things right, instead 

of waiting for things to collapse and then 

fix it,” he said. “It’s almost like going back 

in time and fixing all the things we know 

will break down.” 

Even though U.S.-Cuba science 

exchanges are loaded with logistical challenges, 

each exchange is another opportunity 

to further train Cuban scientists while 

giving Americans access to rare pristine 

ecosystems. 

“We really value the collaboration and 

cooperation from other institutions,” said 

Jorge Angulo Valdes, a University of Havana 

marine scientist and visiting scholar 

at the University of Florida. “It is in the 

best interest of both countries to preserve 

the resources for our people.” H 

Cuban and American scientists discuss shark monitoring strategy during a scientific exchange in Cuba 

Photo by Kendra Karr 

Continued from page 32 

of the U.S.-Cuba Trade and Economic 

Council, Inc. “The change is being driven 

by the airlines [many now authorized to 

make direct flights], because they have 

so many transaction-based operational 

issues,” he says. 

Seleski welcomes the additional players. 

“I think we need more banks to get 

involved. It’s not healthy to have one bank 

that’s doing most of the heavy lifting,” says 

the CEO of Stonegate, which has also 

issued more than 100 debit cards that can 

be used in Cuba. “I think a lot of people 

wanted to see how successful we were with 

it and see if there were any issues.” 

Those ‘issues’ include a few minor inconveniences. 

To be able to use the cards 

in Cuba, for example, Bank customers 

must sign a form affirming that they fall 

into one of the 12 categories the United 

States authorizes for travel there. 

There is also an absence in Cuba of 

the omnipresent retail credit card culture 

you find in the U.S. and Europe. While 

Seleski says that “there are a lot more 

ATMs in Havana than you would think,” 

for the time being it will be primarily 

mainstream hotels and restaurants accepting 

the card. Smaller retailers prefer to 

accept payments in cash. 

Even the higher end hotels in Havana 

are still adjusting to the idea of credit 

cards. For several months after they were 

authorized, Starwood’s Four Points Hotel 

refused to accept the cards until Cuban 

banking officials made it clear that they 

were indeed authorized. 

As for Seleski, the use of Stonegate 

credit cards is just the beginning of banking 

opportunities in Cuba. He is already 

looking to future opportunities, including 

servicing U.S. businesses looking for “the 

ability to transfer money, letters of credit, 

and trade finance.” Those direct interactions 

between U.S. and Cuban banks 

are still prohibited, however, by the U.S. 

government. 

“To get the financial services working 

correctly you really need the embargo 

to be lifted,” says Seleski. “It’s very 

cumbersome going through a third-party 

country.” H 

Florida's Stonegate: The first to issue cards 

DEC 2016 

CUBATRADE 

35

MANUFACTURING 

A NEW FURROW 

How a much celebrated plan to build 

a U.S. tractor factory in Cuba failed to 

gain approval, and what happens next 



Saul Berenthal, co-founder of farm equipment manufacturer Cleber. Inset: Cleber's simple Oggun tractor. 

When Saul Berenthal, co-founder of 

Alabama-based farm equipment manufacturer 

Cleber, shipped one of his tractors to 

last year’s Havana International Trade Fair, 

he could only hope the U.S. government 

would give his company the go-ahead to 

assemble and sell those tractors in Cuba. 

In February, the U.S. government 

finally granted Cleber permission to build 

the first U.S. factory in Cuba in more than 

half a century, slated for construction in 

the Mariel Special Economic Zone. What 

Cleber did not count on was the Cuban 

government turning down its proposal. 

That decision was announced just before 

this year’s Fair in November. 

Why Cuba decided not to move 

forward has been the subject of extensive 

commentary since then. The Associated 

Press reported that the government may 

want to slow down direct investment from 

the U.S. until the embargo is lifted. The 

Miami Herald explained how new deals to 

import tractors from China may have had 

a chilling effect, since Cleber would have 


been a competitor (indeed, large Chinese 

tractors were prominently displayed at the 

entrance to this year’s Fair). 

According to Spanish news agency 

EFE, the simplicity of Cleber’s design was 

a big reason why it won’t be assembled in 

Mariel. “Mariel is looking for very hightech, 

advanced manufacturing, and our focus 

is a simple, basic tractor,” said Cleber partner 

Locky Catron. Another reason: Cuban 

farm gear uses diesel fuel, whereas the 

Cleber tractor uses gasoline. 

Regardless, Cleber hopes to export 

tractors and other products to Cuba 

through the U.S. license it has obtained. 

Berenthal is confident his small tractor, 

named “Oggun” after a Santeria spirit, is 

something that Cuban farmers still need, 

even if it isn’t assembled on the island. It is 

relatively cheap and easy to repair, and uses 

simple components—a necessity in Cuba 

where spare parts are rare. Currently there 

are an estimated 60,000 tractors in Cuba, 

mostly Soviet made, but some 500 are 

being lost each year, cannibalized for parts. 

“It is difficult because the structure 

of how they do business is different than 

ours, and we need to understand how it 

works,” Berenthal told Cuba Trade when 

asked if he was frustrated by the Mariel 

decision. “If we stop self-inflicting ourselves 

through the embargo, it will be less 

difficult and risky.” 

Jodi Bond, President of the U.S. 

Chamber’s U.S.-Cuba Business Council, 

says the failure of such deals to materialize 

in the short term is not unusual. “It’s too 

bad about the tractors, and it’s too bad 

about some of the other commercial deals, 

but business negotiations do take time, 

especially when they are in brand new 

territory,” said Bond. 

Even with the loss of the deal, the 

silver lining was the widespread publicity 

Cleber received during the many months 

it was pursuing approval. The profile it 

raised to build its Mariel assembly plant 

helped it raise funds for a new U.S. factory, 

which was scheduled to open in northeast 

Alabama on November 30. H

R 

STILL THE ONLY CUBE OF ITS KIND. 

Long-Standing Brands that Set the Standard 

www.TheLegacyCompanies.com

LEGISLATION 

The 

Legislative 

Outlook 

The next steps forward 

are already in the Senate, 

waiting for the House 

By Lee Ann Evans 

Ever since the U.S. announced that it 

would begin normalization of relations 

with Cuba on December 17, 2014, we 

have seen some remarkable progress. 

Embassies have reopened. Memoranda of 

Understanding (MOU) have been signed 

in areas such as civil aviation, maritime 

cooperation, agriculture, environment, 

homeland security, and health. The U.S. 

and Cuba have begun to strengthen bilateral 

cooperation on environmental issues, 

public health, and counter-narcotics. 

Discussions have commenced on renewable 

energy, intellectual property, and trade 

and investment. And the bilateral dialogue 

continues on tough issues such as property 

claims, human rights, and fugitives. 

Many of these initiatives have come 

from the executive office of government. 

While such actions are exemplary, the 

stage must shift to the legislature, so that 

the opening with Cuba becomes permanent—and 

deeper. 

The good news is that legislative 

initiatives are now in the works, following 

earlier legislation to remove restrictions on 

trade and investment with Cuba. Equally 

encouraging is that these initiatives are 

bipartisan. Republicans and Democrats 

alike have recognized the enormous 

potential that will come from a normal 

relationship with Cuba—in line with their 

constituents. Poll after poll shows that 

an overwhelming majority of Americans 

are in favor of opening up travel and 

trade with Cuba. Importantly, among Cuban-Americans 

in Miami-Dade County, 

63 percent are now in support of lifting 

the embargo, according to the most recent 

poll from Florida International University. 

Finally, the tides are turning in Congress. 

We have made huge strides in the 

Senate: On June 16, the U.S. Senate 

Appropriations Committee overwhelmingly 

voted to include four pro-engagement 

Cuba amendments in a must-pass 

fisccal year 2017 appropriations bill. Those 

amendments included one offered by U.S. 

Sens. John Boozman (R-AR) and Jon 

Tester (D-MT) to allow American farmers 

to extend private financing for the export 

of agricultural commodities to Cuba, 

which passed by a vote of 22-8, with the 

support from Committee Chairman Thad 

Cochran (R-MS). The amendment would 

also repeal a requirement that any U.S. 

vessel entering a port in Cuba must obtain 

a license to load or unload freight in the 

U.S. within 180 days. 

Another amendment offered by Sens. 

Patrick Leahy (D-VT) and Jerry Moran 

(R-KS) to end the travel ban on Cuba then 

passed by voice vote. Additional amendments 

offered by Sen. Tom Udall (D-NM) 

and Sen. Susan Collins (R-ME), allow for 

the exportation of telecommunication services 

and the refueling of planes at Bangor 

Airport for international flights en route to 

or from Cuba, respectively. Both amendments 

were passed by voice vote. This will 

be the subject of negotiations in the lame 

duck session omnibus bill. 


PENDING CUBA LEGISLATION 

On the House side, support for 

changing Cuba policy is growing. Even 

the most outspoken opponents of ending 

the Cuban embargo have realized that 

their position is no longer tenable. In July, 

Rep. Rick Crawford (R-AR), a leader 

in opening up trade and travel to Cuba, 

reached an agreement to find a long-term 

solution to provide credit for the export 

of agricultural commodities to Cuba 

with the Republican Leadership (including 

members from Florida) who have 

previously resisted changes to U.S.-Cuba 

policy. During the appropriations process, 

Crawford withdrew his bill with a promise 

from the opposition to negotiate. As a 

result of this compromise, there was no 

vote on the appropriations amendments 

offered by Reps Rick Crawford and Rep- 

Mark Sanford (R-SC) to remove restrictions 

on agricultural exports and to lift the 

travel ban, respectively. A hearing was held 

in the House Agriculture Committee on 

September 14, 2016. As of now, we will 

wait to see whether the Senate provision 

will prevail in conference. 

Our failed unilateral sanctions have 

caused great economic hardship for the 

people of Cuba and continue to put 

American businesses at a competitive 

disadvantage. The world is increasingly 

looking to Cuba as a key player in international 

affairs, through advanced medical 

aid, regional conflict mediation, and its 

re-entry in the global market. Our policy 

of isolation not only weakens our international 

credibility, but also threatens our 

national security, as well as our economic 

and human rights interests in the region 

and around the world. On the floor of 

the 32nd Plenary Meeting of the U.N. 

General Assembly, representatives from 

the international community cited the 

embargo as a glaring inconsistency with 

the recent changes in U.S. policy toward 

Cuba, including the reestablishment of 

diplomatic relations. H 

Lee Ann Evans is a senior policy advisor 

for Engage Cuba, a national coalition of 

private companies, organizations and state 

and local leaders working to lift the embargo. 

www.engagecuba.org. 

S. 299/HR 664 Freedom to Travel to Cuba Act: 

H Lead co-sponsors in Senate are Sens. Jeff Flake (R-AZ) and Patrick Leahy (D-VT); 

51 co-sponsors (40 D, 9 R, 2 I) 

H Rep. Mark Sanford (R-SC) leads the bill in the House; 131 Co-sponsors (111 D, 20 R) 

H.R. 3687 Cuba Agricultural Exports Act: 

H Lead co-sponsors are Reps. Rick Crawford (R-AR), Michael Conaway (R-TX), and 

Ted Poe (TX-2); 48 co-sponsors (25 R, 23 D) 

S. 1049 Agricultural Export Expansion Act of 2015: 

H Lead co-sponsors are Sens. John Boozman (R-AR) and Heidi Heitkamp (D-ND); 


S. 491 Freedom to Export to Cuba Act of 2015: 

H Co-sponsored by Sens. Amy Klobuchar (D-MN) and Mike Enzi (R-WY); 


S. 1543/HR 3238 The Cuba Trade Act of 2015: 

H Lead sponsors are Sens. Jerry Moran (R-KS) and Angus King (I-ME) in the Senate; 

3 co-sponsors (2 R, 1 I) 

H Reps. Tom Emmer (R-MN) and Kathy Castor (D-FL) in the House; 

25 co-sponsors (14 D, 11 R) 

LEGISLATIVE OUTLOOK: SENATE 

H June 16, 2016: U.S. Senate Appropriations Committee overwhelmingly votes to include 

four pro-engagement Cuba amendments in a must-pass FY 2017 appropriations bill: 

• An amendment to allow American farmers to extend private financing for the export of 

agricultural commodities to Cuba and repeal the requirement that U.S. vessels entering a 

port in Cuba must obtain a license to dock in the U.S. in less than 180 days 

• An amendment offered to end the travel ban on Cuba 

• An amendment to allow for the exportation of telecommunication services to Cuba 

• An amendment to allow refueling of planes at Bangor Airport for international flights en 

route to or from Cuba 

LEGISLATIVE OUTLOOK: HOUSE 

H June, 2016: Representative Rick Crawford (R-AR) submits an amendment to allow 

agriculture financing for Cuba in the must-pass FY 2017 appropriations bill. 

H July, 2016: Rep. Crawford withdraws the amendment in exchange for a promise to 

find a long-term solution to provide credit for agricultural commodity exports to Cuba 

• As a result of this compromise, there will be no vote on the appropriations amendments 

offered by Rep. Crawford (R-AR) and Rep. Mark Sanford (R-SC) 

• A hearing was held in the House Agriculture Committee on September 14, 2016, but 

no new amendements were intiated 

• If the Senate amendment prevails then it will go to conference in the House for possible 

inclusion in the FY 2017 appropriations bill 

DEC 2016 

CUBATRADE 

39

TRADE 

Importing 

the 

Forbidden 

Fruit 

In a first crack to the embargo against imports, 

how Cuban coffee made it to the U.S. 


U.S. supermarkets have stocked Cubanstyle 

coffee, like Café Bustelo’s popular 

espresso, for years. But the coffee itself? 

That came from Colombia. Now, for the 

first time in more than half a century, 

Nestle’s Nespresso is selling coffee from 

Cuba in the U.S. market. 

Pent-up interest in the coffee was 

so high that the first batch of Nespresso’s 

Cafecito de Cuba espresso capsules 

sold out almost as soon as they debuted 

in August. Since then, the capsules have 

sporadically returned to Nespresso’s online 

store. Each one sells for $1.25, which is 

much higher than the 70 to 80 cent price 

tag of most Nespresso capsules. 

Cafecito de Cuba reached the U.S. 

thanks to an April 2016 State Department 

decision to add coffee and textiles to 

the list of products that, if made by Cuban 

entrepreneurs, can be imported. Under the 

rules, entrepreneurs must have documents 

to prove they are not owned or controlled 

by the Cuban government. 

“Nespresso is committed to working 

with independent smallholder farmers, 

and has obtained certifications from the 

Cuban government and the importer 


with whom we worked, that the coffee 

we bought was grown by smallholder 

farmers in Cuba,” Nespresso told to Cuba 

Trade. Cuba has increasingly embraced 

private agriculture since 2008, when thenrecently 

appointed President Raúl Castro 

allowed private farmers to use idle land 

owned by the government. Even though 

farmers are required to sell most of their 

crops to the state at prices set by the 

state, some products can be sold on the 

private market. Those moves have helped 

put Cuba’s coffee future into the hands 

of private farmers. Nespresso says more 

than 90 percent of the coffee grown in 

Cuba comes from 20,000 to 30,000 small 

independent farmers. “With coffee, the 

benefits of large-scale production are not 

clear,” said Frederick Royce, a University 

of Florida faculty member who specializes 

in Cuban agriculture. He says small 

independent farms are better suited to 

grow coffee because it doesn’t require 

heavy machinery. 

The Cafecito de Cuba beans were 

grown in the Granma and Santiago de 

Cuba regions of the country. However, 

they only reached Nespresso in Europe 

after the coffee giant bought them from 

Cuban state-enterprise CUBAEXPORT 

and U.K. company Cubana. The beans 

were roasted and packaged in Switzerland 

before they were shipped to the U.S. 

Even though the State Department 

allows the importation of some Cuban 

coffee, it may take a while for more to 

pour into the U.S. market. Nespresso says 

Cafecito de Cuba is being introduced as a 

limited edition product due to the limited 

quantity available. “We plan to explore the 

opportunity to make this coffee a part of 

the permanent range in the future,” 

wrote Nespresso. H

CFI 

US-Cuba Trade Relations & 

Investment 

“As proud members of the USACC, 

we support improved trade relations 

and thank the efforts of the coalition.” 

We aim to create stable and synergistic consensus, 

trade, and foreign direct investment 

partnerships. 

Established 2008 

www.ChicagoFoodsInternational.com

FLYING

HIGH 

A Tale of the Long Game: How 

Havana Air took off to become 

the largest provider of passenger 

traffic to Cuba 

Text by Michael Deilbert 

Photos by Jon Braeley

The Boeing 737 glides over the powdery beaches and 

condos of Miami Beach before heading south above the 

necklace-like string of islands that are the Florida Keys, 

glittering in the turquoise waters like jewels. The plane, packed 

with Cuban-Americans and tour groups heading to Havana, 

quickly traverses the Straits of Florida before descending over 

rolling farmland petering out at the tumbling Caribbean surf. 

Beneath the fiery afternoon sunset, Havana, the Caribbean’s 

largest city and Cuba’s pulsating capital, appears below. 

These are heady times for air carriers heading to Cuba from 

the United States. Since the U.S. normalized diplomatic relations 

with Cuba in December 2014, more and more U.S. citizens have 

been traveling to the country, eager to sample the charms of the 

long-forbidden Communist island. During 2015, Cuba’s government 

said the number of U.S. visitors increased by 77 percent, totaling 

161,233 for the year; estimates for 2016 more than double 

that figure. And with scant seafaring options, these tourists are 

arriving by air. 

For decades, there was no regularly scheduled commercial air 

travel between the United States and Cuba, with charter companies 

stepping into the breech to provide service. That 

is now changing, with numerous American 

commercial airlines being granted routes 

to Cuban cities. But the dominant player in 

air travel between the U.S. and Cuba, with 

regular daily flights, remains charter airline 

Havana Air. “We are a scheduled service airline 

trapped in a charter company’s body,” says 

President and COO Mark Elias. “We operate 

three or four flights a day.” 

Elias, partnering with his friend of 30 

years CEO David Nesslein, started the company 

in early 2009. The pair were inspired while 

watching President Barack Obama’s inaugural 

address in January of that year, during which the 

president spoke of a new opening to the world 

and working alongside “old friends and former 

foes.” The new administration was also more open 

to doing business with Cuba than the previous Bush 

presidency. 

“Under Bush, no one was getting any new licenses from 

OFAC (the Office of Foreign Assets Control),” says Elias, a 

U.S. travel industry veteran with experience in the corporate 

and leisure markets. "We thought it might be possible under the 

new administration." Even so, it would take him and Nesslein 

years to get the proper permits, a testimony to the long-game 

approach that U.S. companies need to take when doing business 

with Cuba. 

In the end it took nearly two years to obtain a coveted 

license from OFAC, and that was followed by years of persistent 

efforts in Cuba. “The OFAC license was difficult to obtain and 

took more than a year and a half,” says CEO David Nesslein, 

who ran a successful healthcare company for 33 years before 

selling it in 2006. “And it took almost 4 years to hammer out 

agreement on the Cuban side.” 

Throughout those negotiations the duo flew to Havana 

repeatedly, working out the intricacies of the deal with Celimar, 

a division of Havanatur, the state company that oversees tourism 

in Cuba. “When we went to Cuba and were proposing to begin 

flights, we told them we wanted to open our services to the U.S. 

non-Cuban audience as well as Cuban-Americans,” Elias says. 

“We were constantly telling them we were going to bring them 

the U.S. audience.” Which they did, leveraging Elias’s travel industry 

background. During the long process of acquiring licenses, 

they also honed their market intelligence by acting as sales agents 

for other charters. 

Once the company received permission to operate, another 

set of hurdles arose: The decades-old U.S. financial restrictions that 

make it difficult to transfer funds to Cuba, in this case for aircraft 

landing fees and ground operations. In the end, like other U.S. 

companies doing business with Cuba, Havana Air solved this by 

using third-country banks for transactions with the island nation. 

Finally, on Thanksgiving Day 2013, Havana Air carried its first 

load of passengers from Miami to Cuba’s capital. “It was trial by 

fire,” says Elias. “But we were fully booked on that day and passenger 

loads have continued to increase since then as the number 

of flights have grown.” 

Today, Havana Air averages more than two dozen 

flights a week heading to Cuba and carries 

more than 12,000 passengers a month. The 

company now encompasses a fully-automated 

online booking site, ticket purchasing, and 

applications for visas, all directly on line. In 

addition to Havana, they fly to the regional cities 

of Santiago, Santa Clara, Holguín and Camagüey 

utilizing 737-800, 160-seat aircraft operated by 

Eastern Airlines. Departures include Miami and 

Tampa, and they operate the only flights departing 

from Key West to Havana. They also have a ground 

operation, Cuba Explorations, that provides cultural 

tours around the island. 

While Havana Air is now the largest carrier of passengers 

between the U.S. and Cuba, however, the aviation 

landscape they pioneered is about to dramatically change. 

As of early November, ten commercial airlines had received 

U.S. approval to fly to Cuba, routes that are slowly being approved 

by the Cuban government—beginning with Jet Blue’s 

inaugural Santa Clara flight last August. Other airlines approved 

include American, Delta, United, and Alaska Airlines, with 

routes to Havana, Holguín, Cienfuegos, Santiago, Varadero, 

Camagüey and the aforementioned Santa Clara, flying from U.S. 

cities that include Los Angeles, New York, Miami, Tampa, and 

Newark. 

By and large, most analysts see the expansion of air service to 

Cuba as a positive development, including for the Cuban people 

and their economy. “We’re very encouraged by what’s happening 

because it’s an opportunity for the market and the economy to 

grow in a country that’s been closed off from the United States,” 

says Peter Cerda, regional vice president at the International Air 

Transport Association. “By being able to put into effect scheduled 

service, this is a game changer.” 


It was trial by fire, but we were fully 

booked and we’ve been full ever since. 

Mark Elias, president and COO, Havana Air 


Havana Air passengers arriving at 

José Martí International Airport

Havana Air has carved out a uniquely competitive niche in the U.S.-Cuba 

travel market, based on their understanding of the passengers they serve. 

While few observers predict that U.S. air service to the island 

will be rescinded, the industry vis-à-vis Cuba is not without challenges. 

In September, Sens. Marco Rubio (R-Florida) and Robert 

Menendez (D-New Jersey) co-sponsored legislation designed to 

halt commercial flights from the United States to Cuba, at least 

until the U.S. Transportation Security Administration (TSA) can 

complete an analysis of airport security in Cuba and ink a deal 

that allows the TSA to regularly inspect them. 

There are also concerns that Cuba’s aviation infrastructure, 

especially José Martí airport in Havana, will be hard pressed to 

handle an influx of new passengers. This may be alleviated in the 

long term by contracts signed by the Cuban government with 

French firms Bouygues S.A. (to upgrade the facility) and Aéroports 

de Paris (to operate the airport). In the short term, however, 

facilities will be strained as Americans fly with increasing ease to 

Cuba. Though tourism to Cuba per se is still prohibited, OFAC 

grants visas for 12 categories of travel, including family visits, 

educational activities, religious activities, and the open-ended 

‘people-to-people’ trip. Unlike in previous years, travelers can now 

self-certify, rather than go through a formal approval process. 

For both the short and the long term, the founders of Havana 

Air are not particularly worried about the new competition. 

“They are the ones who are going to have to compete with us,” 

says CEO Nesslein. Pricing, for example, won’t be an issue. 

Historically, charter companies have been forced to pay substantially 

higher landing fees than commercial carriers, but recently, 

Havana Air succeeded in reaching a deal with Cuba’s government 

that brought these rates to parity. 

Indeed, Havana Air has in some ways carved out a uniquely 

competitive niche in the U.S.-Cuba travel market, based on 

their understanding of the passengers they serve. “We were both 

frequent flyers and airline customers for years, so we knew exactly 

what we wanted to do and what we didn’t want to do,” says Elias. 

Among those initiatives is Havana Air’s policy of accommo- 


dating over-sized items that Cuban-Americans want to bring to 

relatives, such as large boxes, televisions, and bicycles (especially 

popular on the Camagüey route), things that commercial airlines 

are reluctant to take aboard. For any given flight, a long line snaking 

from Havana Air’s check-in counter at Miami International 

Airport––with travelers pushing overloaded carts––is a common 

site. “Simply put, we often take luggage types on board that other 

companies won’t,” says Elias. 

Another competitive advantage, he says, is scheduling. “We 

offer early morning flights. The scheduled airlines opt for later 

flights waiting for connections from other cities. But our passengers 

want to get down there early in the day.” Havana Air is also 

planning to compete with the influx of competition by catering 

to a more upscale market. With terminal facilities in Havana 

soon to be stretched to capacity, Nesslein and Elias are betting 

that corporate and affluent passengers will want to avoid the mess 

and travel by private plane. Nesslein has made substantial gains in 

acquiring private aircraft landing rights, and Havana Air currently 

facilitates about 15 private jets a month, from Hawker 850s to 

Gulfstream G4s, including regularly scheduled flights from Key 

West three times a week. 

The company also believes that its extensive connections on 

the ground in Cuba, and the personal service of Havana Air, will 

help them compete in the increasingly diversified Cuban aviation 

landscape. The company’s expertise in Cuba has been utilized by, 

among others, the Rolling Stones, who employed the company 

to move their support staff for their heralded concert in Havana’s 

Ciudad Deportiva this past May. A few days earlier, Havana Air 

had flown in the Tampa Bay Rays when they played their historic 

game against Cuba’s national team in front of Barack Obama and 

Raúl Castro. The company also sponsors Cuban reggaeton group 

Los Quatros for their U.S. tours and participates in several pro 

bono efforts to bring Cuban artists to the U.S. 

“I think the difference between us and a scheduled carrier 

is that we fly every day, 7 days a week, to Cuba,” says Elias. “We

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PUERTO RICO: 

THE U.S. BRIDGE TO CUBA? 

As the Caribbean island that the U.S. never left, Puerto Rico has 

existed in a kind of parallel universe to Cuba. Now it wants to 

position itself as a conduit to its Hispanic soul mate——if it can. 

Story and photos by Larry Luxner 

The Capitol building sits in front of the San Juan Inlet

In a once-fashionable Havana suburb today known for 

leafy banyan trees and crumbling mansions, a handful of 

independentistas struggles to maintain the closest thing 

Puerto Rico has to an embassy in Cuba. 

Here, along Calle 22, right off Miramar’s stately Quinta 

Avenida, is the Misión de Puerto Rico en Cuba Juan Mari Brás. A 

Puerto Rican flag out front and a bronze plaque nailed to the 

freshly painted house attest to that fact. 

Inside, a cook peels potatoes for lunch, while in the living 

room—decorated with Marxist memorabilia from the time of 

Pedro Albizu Campos—58-year-old Edwin González Vázquez 

discusses his beloved island’s changing relationship with Cuba. 

“In the two years since diplomatic relations between the U.S. 

and Cuba were established, we’ve seen a lot of progress,” he told 

Cuba Trade. “Things are much more advanced now. I think this is 

only natural. And the number of Puerto Ricans visiting Cuba has 

increased dramatically—even without direct flights between San 

Juan and Havana.” 

González said his so-called “embassy,” established in 1966 

“to promote the cause of independence for Puerto Rico,” recently 

celebrated its 50th anniversary with speeches, art exhibits, 

concerts—even the unveiling of a new commemorative postage 

stamp. But this decidedly unofficial mission won’t be Puerto 

Rico’s sole outpost in Havana for much longer. 

Last June, the island’s pro-commonwealth governor, 

Alejandro García Padilla, announced that Puerto Rico would 

establish a trade office in Havana—similar to offices it has 

opened in the Dominican Republic, Panama, Peru and Colombia—in 

order to take advantage of new business opportunities 

following the resumption of diplomatic ties between Cuba and 

the United States. 

“Cuba represents a significant potential market for Puerto 

Rican companies in diverse industries,” declared García Padilla, 

the first sitting Puerto Rican governor ever to visit Cuba. He 

spoke on the sidelines of the 7th Association of Caribbean 

States summit in Havana, following a friendly meeting with 

Raúl Castro. “The opening of a commercial office in Havana 

will boost business opportunities for our entrepreneurs… 

connecting them to potential clients, business partners and 

industry representatives.” 

Added Héctor Ferrer, a pro-commonwealth politician who 

lost the Nov. 8 race to become Puerto Rico’s nonvoting resident 

commissioner in Washington: “We have what Cuba needs—engineers, 

chemists, contractors, architects, entrepreneurs, lawyers. 

Most of them are educated or trained in the States. So if the U.S. 

is going to start a relationship with Cuba, they should look to us.” 

Puerto Rico and Cuba are often referred to as “dos alas del 

mismo pajaro”—two wings of the same bird—because of their 

shared history under Spanish colonial rule. Both came under U.S. 

domination following the Spanish-American War of 1898; Cuba 

got its independence four years later, while Puerto Rico remained 

a colony and achieved commonwealth status in 1952. 

The two islands’ flags are of the same design, but with the 

blue and red reversed; Cubans and Puerto Ricans share cultural 

similarities as well, including their affection for everything from 

salsa to baseball. There’s even a sugar-mill town named Puerto 

Rico Libre in the Cuban province of Matanzas—tangible evidence 

of socialist Cuba’s longtime support for the cause of Puerto 

Rican independence. 

Yet economically and politically, the two islands could hardly 

be more different. Poor by U.S. standards, Puerto Rico nonetheless 

has a per-capita income of $28,500 and nearly two million 

vehicles choke its streets and highways. 

Even so, Puerto Rico is in an economic free-fall, while Cuba 

is staggering forward. The U.S. commonwealth struggles under a 

$68 billion mountain of debt, which comes to $15,700 per-capita—more 

than 10 times the average per-capita debt in the 50 

U.S. states. This summer Congress had to pass emergency legislation 

to keep the island from defaulting, including a rescue plan 

with an oversight board that has stirred deep resentment among 

many residents and revived calls for Puerto Rico to secede from 

the “colonist” mainland. 

Meanwhile, the island’s unemployment rate stands at 11.3 

percent. Its GDP declined by 1.6 percent in 2015 and is projected 

to shrink another 2 percent in both 2016 and 2017. By 

comparison, Cuba saw its economy grow by 4 percent last year 

(though predictions for oil-strapped 2016 are for 1 percent.) 

Violent crime and drug abuse, virtually absent in Cuba, are high 

in Puerto Rico, while life expectancy is now slightly lower than 

that of Cuba. In one telling sign, the Pew Research Center noted 

that the surge of Cubans arriving on U.S. shores last year (43,159 

compared to 24,278 in 2014) was about half the number of Puerto 

Ricans (83,844) entering the U.S. mainland during the same 

time period. 

It wasn’t always this way, however. 

Changing Times 

Following the 1959 revolution, Puerto Rico’s relative prosperity 

and Spanish-speaking culture attracted many Cuban exiles. At 

least 20,000 of them now live in Puerto Rico, where they have 

dominated certain sectors of the economy, most notably in advertising, 

radio stations and newspapers. 

We have to insert our professional sector 

throughout Cuba because for the Cubans, 

it’s better to deal with Puerto Ricans than 

with Americans. 

Puerto Rican businessman Manuel Cidre 

One such exile is Manuel Cidre, who recently made an 

unsuccessful bid for governor of Puerto Rico as an independent, 

self-made millionaire (he got 5.7 percent of the popular vote, 

coming in fourth out of six candidates; the winner was politician 

Ricardo Rosselló of the pro-statehood New Progressive Party). 

Born in the Havana suburb of Tarará, Cidre left Cuba in 

1962 as a young boy, settling with his parents in Puerto Rico. 


In one telling sign, the Pew Research Center 

noted that nearly twice as many Puerto Ricans 

relocated to the US last year (83,844) as did 

Cubans (43,159). 

Edwin González Vázquez, the unofficial ambassador for Puerto Rico's independence movement 

DEC 2016 

CUBATRADE 

51

Self-made millionaire Manuel Cidre 

Cidre launched his company, Los Cidrines, in 1978 with his 

brother Guillermo. Today their factory of 20,000 square feet 

produces frozen baked goods for supermarkets in Puerto Rico 

and the U.S., with $23 million in annual sales. Now fully retired 

(the business is run by his sons and sister), Cidre wants to devote 

himself to bringing prosperity back to Puerto Rico. 

Last year, Cidre returned to Cuba for the first time in 54 

years, spending three months on the island. He drove from 

Havana to Pinar del Río, then back to Havana and from there to 

Cienfuegos, Camagüey and Santiago de Cuba. 

“For the last two weeks of my journey, I walked in Havana 

every evening from 5 p.m. to midnight,” he said. “If you’d 

make some small changes to Havana—maybe with its energy 

and water systems—it would be ready to receive a big chunk of 

immigrants.” 

Cidre, who opposes the U.S. trade embargo, said it would be 

hard to export bread products from Puerto Rico to Cuba. But he 

noted that the island remains lucrative for other Puerto Rican 

firms. “From Pinar del Río to Santiago you will have opportunities 

for the next 20 years in everything from roads to condos 

to hotels,” said Cidre. “We have to insert our professional sector 

throughout Cuba because for the Cubans, it’s better to deal with 

Puerto Ricans than with Americans. The U.S. can use Puerto 

Rico as a bridge to get into Cuba, though we have to recognize 

that we are part of the United States.” 

That’s why Cidre does not believe that having a Puerto 

Rican trade office in Havana will accomplish much. 

“It would be better to have a small office at the U.S. Embassy 

[in Havana] representing Puerto Rico,” he said. “We need 

representation in Cuba as part of the federal government. We can 

take initiatives on our own, like opening an office in Cuba. But 

two years ago, when President Obama started improving the relationship 

between the U.S. and Cuba, that was the right moment 

for the resident commissioner to insert himself into the process. 

But they didn’t do anything… If we’re part of the United States, 

we have to be with the U.S. in their initiative.” 

Back in Havana, the socialist González agrees with the 

capitalist Cidre that such an office would be relatively useless— 

assuming the State Department allows it to be established in the 

first place. 

“Puerto Rico is a colony of the United States, so all U.S. 

restrictions on doing business with Cuba apply to Puerto Rico 

as well,” he told Cuba Trade. “Officially, I think the U.S. government 

will not permit this, especially now after these last elections, 

in which the ‘Estado Libre Asociado’ government lost to a 

pro-statehood party that promotes the annexation of Puerto Rico 

to the United States.” 

Excess Capacity 

For years, Puerto Rico’s economy was based on Section 936 of 

the U.S. Internal Revenue Code, which exempted U.S. firms from 

paying federal income taxes on profits earned by their Puerto Rico 

manufacturing subsidiaries. As a result, more than 2,000 factories 


Signs of protest against U.S. “colonialism.” 

were set up to produce everything from canned tuna to Viagra. 

While Section 936 is long gone, many of the plants 

have remained—especially in capital-intensive industries 

like pharmaceuticals. With that in mind, the Puerto Rico 

Manufacturer’s Association (PRMA) has already conducted 

two missions to Cuba through Manchester Trade Ltd., a 

Washington-based consulting firm. “In 2013, we started taking 

business missions to Cuba,” said David Lewis, Manchester’s 

vice-president. “Once Obama opened things up, we were able to 

piggyback on that because we were already prepositioned in the 

Cuban market. What we found was that people are very focused 

on all the permits and allowances from the U.S. side, but they 

don’t realize that, like with any other foreign country, you need to 

comply with Cuban rules and regulations too.” 

Despite three subsequent PRMA missions to Cuba, 

however, Puerto Rican firms are still just scratching the surface. 

“Last year, Puerto Rican companies had only $415,000 in 

sales to Cuba—and that’s mostly people who have been doing 

food and beverages. It’s an uphill battle, but there’s traction,” 

said Lewis, whose next Puerto Rico mission to Cuba is set 

for mid-February 2017. “We’re not talking about investment 

because we don’t see that happening. At best, you have a couple 

of U.S. companies whose distributors in Puerto Rico have had 

responsibility for all the Caribbean islands. So when Caterpillar 

announced earlier this year they’d be doing business in Cuba, it 

will be through [local distributor] Rimco.” 

Lewis observed that Cuba’s import agency Alimport just 

bought 3 million cases of Presidente beer from the Dominican 

Republic and 1 million cases of Banks beer from Barbados. 

“They have a deficit for everything––rice, beans, oil, packaged 

foods and cereals. It’s a matter of who can strike up a deal with 

Alimport and be guaranteed payment. So for $415,000, why 

open a trade office in Cuba when Virginia sells $2 million a 

year—and Arkansas and Louisiana even more than that—and 

they haven’t opened offices?” 

Regardless of how many outposts Puerto Rico may set 

up in Cuba, things are likely to improve once direct flights are 

launched from San Juan to Havana’s José Martí International; 

San Juan already has DOT approval for the route, but so far a 

request from Panama’s Copa Airlines has not received Cuban 

approval. 

Leading communications consultant Alex Díaz has his 

own theory about what needs to happen. “As long as Puerto 

Rico remains a U.S. territory, the winning formula is for 

American companies to set up shop in Puerto Rico, partner 

with local firms for the talent and cultural affinity with Cuba, 

and take advantage of Puerto Rico’s huge export incentives–– 

Law 20 for services and Law 73 for manufacturing,” said Díaz, 

president of the San Juan-based export-marketing boutique 

firm AlexDiazEco. 

“Puerto Rico is the only place in the world under U.S. law 

that is foreign for taxation, so your product is ‘Made in the USA’ 

but without the federal taxes,” he added. “That’s the wave I’ll be 

looking for in the years ahead.” H 

DEC 2016 

CUBATRADE 

53

Customers waiting for the 

doors to open at a central 

Havana ETECSA office 

AT&T CALL 


When AT&T launched roaming coverage and direct 

mobile phone service for its customers in Cuba 

this past October, the move marked the latest in 

a series of agreements inked by U.S. telecom providers with 

Cuba’s state-run telecommunications company, the Empresa 

de Telecomunicaciones de Cuba S.A. (ETECSA). 

“The AT&T deal sort of completes the stable of service 

providers from the U.S.,” says Pedro Freyre, a partner at the 

international law firm of Akerman LLP and a specialist on 

U.S. business operations under the embargo in Cuba. 

As an AT&T customer himself, Freyre added that the 

new service is already making a difference, as he can now use 

his iPhone on the island. Previously he had to switch to an 

ETECSA mobile with spottier coverage. 

Despite the agreements—all since the announcement 

that the U.S. and Cuba would normalize relations in December 

2014—Cuba remains one of the world’s most expensive 

countries for accessing telecommunications services. This is 

true for telephony or internet use, for incoming international 

calls, or the domestic use of mobile phones. Currently, the 

cheapest way to call Cuba offered by a major U.S. carrier is an 

IDT Corporation plan that costs $.65 a minute. 

“The high cost associated with the revenue sharing deal 

is not likely to diminish in the near future, especially as the 

Cuban government looks for more liquidity,” Reuben Smith- 

Vaughan, executive director of the U.S. Chamber of Commerce’s 

US-Cuba Business Council, told Cuba Trade. Each 

participating telecom provider has to sign an independent 

agreement with ETECSA for sharing revenue from roaming 

and mobile services. Those revenues, Reuben-Smith notes, 

could fund infrastructure investments. And while short-term 

costs will remain high, with the full array of big U.S. telecoms 

now offering services on the island there could be more direct 

competition between the companies in the years ahead. 

“In that sense, it’s good,” says Freyre. “When you have 

big players coming in, you would expect improvement in

HOME 

WITH HELP FROM U.S. COMPANIES, CUBAN 

TELEPHONY GRADUALLY UNFOLDS 

By Sean Goforth 

Photo by Jon Braeley

services and costs to eventually come down.” Internet access is 

also far more expensive in Cuba than most other countries in the 

region. Over the last year, ETECSA, which has a monopoly over 

telephony and the internet in Cuba, has expanded the number of 

wifi hotspots where Cubans can access the internet. The stateowned 

firm also cut the cost of access at these locations by more 

than half, to 2 CUC (about $2) per hour. But in a country where 

the average worker makes about $25 a month, every minute 

online is precious time. 

Coming to Terms with the Pace of Change in Cuba 

In announcing the normalization of relations with Cuba, 

the White House diagnosed telecommunications and internet 

services as a priority area for U.S. exports. This fueled speculation 

that Cuba was poised to advance into the 21st century world of 

telecommunications, especially with regard to the internet, as 

loosened U.S. restrictions on sales gave way to rapid installation 

of a modern internet infrastructure. 

“As a virtual internet greenfield, Cuba has the possibility 

of ‘leapfrogging’ to a modern internet in service of the people,” 

says Larry Press, a professor of information systems at California 

State University-Dominguez Hills and longtime student of the 

internet in Cuba. “But doing so would require creative use of 

current technology as a stopgap measure while planning for the 

installation of next-generation equipment.” 

Press points out, however, that infrastructure improvements 

and clear regulations would be needed for Cuba to realize this 

potential. During 2015, others were more bullish, as telecom analysts 

touted Cuba’s amenable geography, as well as the large talent 

pool of Cuban engineers and computer scientists who could carry 

out a modernization plan. Key Cuban officials have also played 

up the potential for rapid improvements in internet connectivity. 

On the sidelines of a World Economic Forum meeting in Mexico, 

Cuban finance minister Lina Pedraza said that Havana was 

in advanced talks with the Chinese telecoms equipment maker 

Huawei. It seemed like a kindred pairing. Huawei is one of the 

few companies that could make good on a pledge to modernize 

an entire nation’s telecommunications sector by coupling expanded 

mobile and fixed-line broadband, and had previously signed 

a deal allowing it to sell smart phones and parts in Cuba. There 

also appeared to be a mutual understanding, as the Chinese were 

sympathetic when Pedraza expressed concern over “negative parts 

of the internet.” 

Weeks later detailed ETECSA plans, including diagrams for 

installing a fiber-optic “backbone” for high-speed internet across 

more than 20 towns on the island, were leaked onto the web. 

Excitement grew that the nation was on the cusp of a rapid rollout 

of modern internet infrastructure. And last October, ETECSA 

announced that it would be piloting an in-home internet 

program in the tourist mecca of La Habana Vieja for about 2,000 

households with fiber-optic technology supplied by Huawei. 

In an illustration of the two-steps-forward-one-step-back 

nature of connectivity on the island, however, ETECSA has 

begun routing all internet traffic through the submarine cable 

named ALBA-1, says Doug Madory, director of internet analysis 

at Dyn Research in Manchester, New Hampshire. The ALBA- 

1 cable connects Cuba to its close ally Venezuela. Before then 

ETECSA had split the volume of Cuba’s internet traffic between 

satellite transmission and ALBA-1. The earlier division was “both 

slower and more expensive,” explains Madory. With the full 

switch from satellite transmission to ALBA-1, Cuba could enjoy 

exponential increases in internet connection speeds. 

Hurdles to Connectivity 

But while the opening of new wifi hotspots has brought plenty 

of fanfare—along with the phenomenon of Cuba cell phone 

users clustering around such hotspots—the net gains in internet 

connectivity have been small. Though there are now 1,006 

More Cubans are enjoying wifi 

on their smartphones 

Mobile Subscribers in Cuba 

(in millions) 

4* 

*estimated year end 

Source: based on data from TeleGeography 

.3 

.62 

1 

1.3 

1.6 

2 

2.5 

3 

2008 2009 2010 2011 2012 2013 2014 2015 

2016 


An internet hotspot in a park in Santa Clara; connectivity is often better outside of Havana 

Employees of state phone company ETECSA repair a switching box in Havana

Fixed Telephone Lines 

Per Capita 

While the use of mobile phones is increasing, many citizens still use 

the far less expensive fixed lines 

Bahamas .4 

Uruguay .3 

Aruba .3 

Grenada .25 

Dominica .23 

Coast Rica .19 

Panama .15 

El Salvador .15 

Ecuador .14 

Guatemala .12 

Peru .11 

Cuba .11 

D.R. (Dominican Republic) .11 

Jamaica .08 

Bolivia .08 

Honduras .07 

Paraguay .06 

Nicaragua .05 

Source: based on data from ITU

public access points for internet across Cuba, that figure includes 

ETECSA navigation rooms, public wifi hotspots, hotels, airports, 

post offices, and some government ministry offices. 

Connections speeds remain 2G, however, while the cost 

remains prohibitive for most Cubans. Given this, Larry Press 

calls the changes “a small drop in the bucket for an island of 11 

million people.” While ETECSA has expanded the number of 

wifi hotspots, and earlier this year Google very publicly installed 

a hotspot at the studio of a Havana artist, overall access to the 

internet in Cuba has barely improved. As of November there 

were only 54 wifi hotspots in Havana, with many sites operating 

at a crawl during peak hours. Surprisingly, Cuba’s provincial 

cities have fared better. “Sometimes the geographical balance is 

so much that it is not practical,” says Nelson Rodriguez Proenza, 

the founder of Casabe, a software programming enterprise in 

Havana. “The [internet] navigation experience on public hotspots 

is far better in other provinces than in Havana.” 

The 3 Classes of Telecom and Internet Users in Cuba 

Cost is the main tool for controlling access to telecom and 

internet services in Cuba, and it separates users into three classes. 

The first is made up of tourists and foreigners who are willing 

and able to pay the price for the convenience of enjoying reliable 

international contact to and from the island. These visitors pay a 

premium that has encouraged hotels to upgrade their connectivity. 

As a result, Cuba’s hotels are thought to rival its universities 

when it comes to offering high-speed DSL access. 

The premium that foreigners pay may offer further indirect 

benefits. One high-level State Department official who asked 

to remain anonymous said that a possible pathway of expanded 

telecom services might involve a “cross-subsidization” of costs. 

Doing so would allow ETECSA to lower costs on domestic 

users in step with the extra revenue it collects from roaming 

charges incurred by travelers. 

The second group of users is made up of Cubans who manage 

to pay for daily internet access and who also generally have a 

mobile phone with coverage from Cubacel, the ETECSA-owned 

mobile carrier. Until 2015, this group was mainly comprised of 

Cubans whose family members abroad provided the money to 

purchase internet access at an ETECSA room or hotspot. 

While this is the smallest class of telecom and internet 

users, it’s also the fastest growing thanks to a new set of entrants: 

Cuba’s budding community of tech entrepreneurs. “We started 

with almost zero connectivity,” says Rodriguez, recalling Casabe’s 

experience. “We were only connecting using very slow public 

access to the internet on very restricted hours.” 

Then, as the company grew over the past year, Rodriguez and 

his colleagues started using the internet rooms run by ETECSA. 

For a time, the growth of the business forced Nelson to go to 

hotels in order to secure internet access. Connection speeds at the 

hotels were faster than those offered by the ETECSA rooms, but 

the cost was extremely high, $6-10 an hour. Now Rodriguez and 

his team tend to use the new wifi hotspots. They manage their 

time well, working on large portions of programming jobs offline, 

saving their time online for the internet-intensive “testing” phase 

of software development. “Testing requires a lot of connectivity 

in order to simulate different scenarios,” he explains. 

Finally, the third class is made up of Cubans whose digital 

footprint is restricted primarily to use of Cuba’s domestic intranet, 

as well as unauthorized internet. Intranet offerings include 

Nauta, the system-wide email; a Wikipedia-style site called 

EcuRed, which has 161, 218 articles and counting; and access to 

a smattering of other sites launched from Cuba and other friendly 

countries like Venezuela. In addition to Nauta for email, many 

Cubans in this category utilize mobiles for calls and texting on 

the island. It’s a thin set of offerings, and it drives many to seek 

access through one of the unauthorized internet connections that 

have proliferated throughout Cuba. 

Forecasting the Expansion of Internet 

Foreign companies, be they from China or elsewhere, are needed 

to modernize Cuba’s internet infrastructure, and while such 

cooperation has long been rumored it is unclear to what degree 

ETECSA is working with these companies to build such an 

infrastructure. Most analysts acknowledge the delay is at least 

partly due to the Cuban government’s reluctance to embrace an 

open internet. At present, Cuba’s sole internet provider does not 

appear eager to rapidly expand connectivity. However, ETECSA’s 

circumspect approach to the internet may well mirror Havana’s 

initially cautious embrace of mobile telephony back in 2008. 

Shortly after Raúl Castro officially assumed power from his 

brother, Fidel, the Cuban government first permitted ownership 

of mobile phones. Then it permitted mobiles to be included in 

gift boxes sent from the United States. Soon mobile phones were 

a fixture on the island. Even when the phones were inoperable, 

because they didn’t have minutes on them, they served as a sort 

of accessory among students and other younger Cubans. 

As the government grew more comfortable with the spread 

of mobile telephony, ETECSA began introducing promotions on 

mobile plans. They cut the cost of activating a new mobile line. 

“Top-up” promotions that offered bonus minutes became more 

and more frequent; eventually ETECSA introduced “double topups” 

that dramatically increased bonus minutes as an inducement 

to buy a phone. As a result, from 2008-2015 the number of mobile 

phone subscriptions on the island increased from only 300,000 to 

more than 3 million. Nearly three-quarters of Cubans ages 18 to 

49 now have a mobile phone, according to a survey conducted last 

year by Bendixen & Amandi; predictions are that nearly 4 million 

mobile phones may be in use by year-end 2016. 

As the expansion of mobile telephony on the island makes 

clear, the decision to improve access is likely to be executed 

gradually at first, before it accelerates. Rather than ambitious 

modernization plans, however, experiments in greater internet 

access are likely to remain the norm for now, including the launch 

of more hotspots. Meanwhile, ETECSA can be expected to 

monitor internet use as it simultaneously works behind the scenes 

to build out the infrastructure needed for a more modern network. 

Price cuts could be introduced to pep up access at the hotspots 

and other ETECSA-run locations. One thing is certain: As the 

cost of connectivity comes within reach of more Cubans, it will 

further whet the appetite for internet access in more homes 

and businesses. H 

DEC 2016 

CUBATRADE 

59

Devry Boughner Vorwerk, 

chair of the USACC

THE 

SEEDS 

OF 

CHANGE 

The Agriculture Community in the U.S. Wants the 

Embargo Against Cuba Lifted. Here’s Why It Makes 

Sense for Both Sides. 

By J.P. Faber 

In mid-September, the House Agriculture Committee 

held what has become an annual event—its public 

hearing on U.S. agricultural trade with Cuba. This 

year, in spite of growing public support for ending a 

half-century of trade sanctions against the island nation, 

Agriculture Committee Chairman Mike Conaway 

(R-Texas) kicked off the hearing with a strident 

reaffirmation of his total opposition to lifting the U.S. 

trade embargo. “While I am very hopeful that we can 

find a path forward on expanding agricultural trade with 

Cuba, I remain firmly opposed to lifting the embargo or 

restrictions on travel,” Rep. Conaway said in his opening 

DEC 2016 

CUBATRADE 

61

Photo courtesy of USACC 

Photo courtesy Kansas Wheat Commission 

A Meeting of Minds: USACC chair Devry Boughner Vorwerk talks with 

Alimport president Alejandro Mustelier Zamora 

statement. Conaway instead maintained that United States has 

“secured too little in return” for the trade normalization proposals 

offered by the Obama administration since 2014. 

Few in attendance at the Congressional hearing shared those 

sentiments, however, including other members of the committee. 

“I disagree with the chairman. I would like to see the embargo 

lifted,” said Ranking Member Collin Peterson (D-Minn.), 

quickly adding, “but I am doubtful that it is politically possible to 

do so.” 

Conaway’s opening statement—and Peterson’s response— 

bring into focus one of the main obstacles standing in the way 

of trade normalization with Cuba: The refusal of a handful of 

lawmakers in key committees to budge on the issue, despite 

recent surveys that show that three-quarters of Americans want 

to see the embargo end. 

Working for Change 

Devry Boughner Vorwerk is one of those Americans. Vorwerk, 

who until recently worked in the Cuba Practice at legal powerhouse 

Akin Gump in Washington, D.C., also chairs the U.S. 

Agriculture Coalition for Cuba (USACC). 

“The most compelling case is that the full embargo has been 

in place for 55 years, and it is not serving its purpose,” says Vorwerk, 

who attended the Sept. 14 hearing. “That goal was to change 

the regime.” 

Counting on Greater Demand: Doug Keesling, Kansas farmer and former 

chairperson of the Kansas Wheat Commission 

Instead, says Vorwerk, the embargo has simply hurt the 

Cuban people. 

“When you travel to Cuba and go out to the depths of the 

countryside, and see the conditions that the Cuban citizens are 

up against—it’s shocking because the sanctions have everything 

to do this,” she says. “The Cuban people deserve the opportunity 

to unleash their creativity, to unleash their entrepreneurial spirit, 

and to engage in commercial relationships with the U.S. and the 

rest of the world.” 

And U.S. agriculture is all in favor of it, Vorwerk says. The 

organization she chairs, USACC, is the largest agriculture coalition 

in the country—and its more than 120 members, ranging 

from state agriculture associations to some of the biggest agribusinesses 

in the world, are pushing to end not only restrictions 

on U.S. food exports to Cuba, but also the entire embargo. 

“First and foremost, we—our farmers and agricultural businesses—are 

basically being told we are not allowed to freely trade 

with a willing customer,” Vorwerk says. “This is an ethical issue 

and sets back food security in Cuba.” 

The Finer Grain 

Being a relatively small market, it may seem surprising that Cuba 

should be such a focal point for American agriculture. Even Rep. 

Peterson—while a proponent of ending the embargo—made a 

point of downplaying the impact of possible market opportunities. 


The Cuban people deserve the opportunity 

to unleash their creativity, to unleash their 

entrepreneurial spirit, and to engage in 

commercial relationships with the U.S. and 

the rest of the world. 

Devry Boughner Vorwerk, chair of the USACC

The California 

CUBA CONNECTION 

The Napa Valley may be a long way from Havana, but vintners 

there see an opportunity in the hospitality industry in Cuba. “I fell 

in love with Cuba the first time I went there,” says Darius Anderson, 

speaking of his earliest trip there as a college student. “Cuba 

was a unique place and I fell in love with everything Cuban.” 

By his count, Anderson has been to Cuba 68 times, establishing 

relationships with “artists, musicians, and people on the 

ground,”—including restauranteurs and sommeliers who understood 

the business of wine in his native northern California. 

Once diplomatic relations were restored between the U.S. 

and Cuba, Anderson and wife Sarah formed the non-profit Californians 

Building Bridges, a group dedicated to strengthening 

cultural and economic ties between Cuba and California. Among 

their outreach programs was a visit to Sonoma and Napa by 22 

wine-savvy Cubans in the summer of 2014. This was followed last 

year by a first-ever California Wine Symposium in Havana, organized 

in partnership with the California Wine Institute and the 

Napa and Sonoma vintner associations. Also in 2014, Anderson 

founded U.S. Cava Exports to assist US companies in their quest 

to sell various food products in Cuba. But his focus has remained 

on California wine, which he believes will find a strong market in 

Cuba as tourism there expands. “We want U.S. wines to compete 

with the rest of the world in the Cuban market,” he says. 

A big part of CAVA’s mission is educational. Alimport, the 

Cuban government import agency, is used to importing inexpensive 

wine from Spain and other countries at the $4 to $10 price 

range. “There is not a lot in California for that price,” he says, 

but the tourism-driven food and wine market is moving upscale. 

“Americans and Canadians consume California wines, and as travel 

to Cuba increases there is a demand for higher quality ones.” 

Anderson’s first container of California wines is scheduled 

to ship by January, purchased by Palco, a division of Alimport that 

supplies diplomatic stores, diplomatic houses and other tourism 

related activities for diplomats. “We could do 75 containers of 

quality California wines over the next five years,” he says. 

Napa Valley grapes: Cultivating a taste for California wines in Cuba 

“With the exception of rice, wheat, maybe dry edible beans, 

lentils, the potential benefits are limited in my opinion in the 

short term, because Cuba is a small country and most people living 

there have a very limited income,” he noted at the September 

hearing. “So we need to keep things in balance here.” 

That perception may be a bit deceptive, however. With annual 

agriculture imports of $2 billion—Cuba imports between 75 

percent and 80 percent of its food needs—any opening for U.S. 

products could quickly result in hundreds of millions of dollars 

in sales. Those are not tiny numbers for farmers in the U.S. South 

and Midwest, especially when you consider how a small shift in 

demand can make a big difference in price ceilings. 

Doug Keesling, a farmer from Chase, Kan., and former 

chairman of the Kansas Wheat Commission, notes that even 

a slight uptick in demand for an agricultural commodity can 

mean a critical shift in pricing—especially when supply exceeds 

demand. “Right now farmers in the U.S. are in an economic 

collapse because prices are so low,” says Keesling, who has traveled 

to Cuba six times. Keesling pointed to wheat, which had a 

bumper crop this year, producing 90 bushels per acre compared to 

45 bushels per acre last year. But farmers are only grossing $180 

per acre, compared to $260 an acre last year. By his reckoning, a 

fully open Cuba, with its 11 million consumers, could absorb 10 

percent of the Kansas wheat crop. 

“It’s all about supply and demand,” says Keesling, who has 

also farmed soybeans, corn, and grain sorghum. “Take 10 percent 

[of our wheat] and ship it to Cuba, and it will raise the prices. If 

it moved prices up 10 or 20 cents [a bushel] it would make the 

difference between being in the red or the black. So when we 

talk about selling 10 percent to a new market, it could make the 

difference between profit and loss. That is very important to the 

farmers and producers of America.” 

Like other members of USACC, Keesling is in favor of fully 

lifting of the embargo, if for no other reason than this would give 

Cuban farmers the ability to sell what they are best at growing— 

tropical fruits, for example—into the U.S. market, thereby giving 

them the income to buy more U.S. farm goods. 

USACC co-chair Paul Johnson, one of the founders of the 

coalition, also serves as executive director of the Illinois Cuba 

Working Group. Johnson’s company, Chicago Foods International, 

began shipping container loads of supermarket goods to Cuba 

in 2008—everything from canned meat to peanut butter. Since 

then, he has shifted his efforts to agriculture infrastructure projects 

aimed at helping Cuban farmers become more productive. 

“The approach we should take is one of comparative 

advantage,” Johnson says. “We should export what we do most 

efficiently, and import from Cuba what they do best.” Right now, 

60 percent of Cuban farming is devoted to sugar, tobacco and 

coffee, he notes. But Johnson suggests that shifting some of that 

farming to fruit and vegetable production could supply the winter 

needs of East Coast U.S. households. He also sees aquaculture as 

another source for Cuban export. 

“Illinois farmers are saying two things. The first is that I can 

bring my product to Cuba,” says Johnson. “The second is, ‘That


Paul Johnson, one of the founders of the USACC, in Cuba: Two-way agriculture trade would be a win-win 

[Cuban] farmer reminds me of how our operations were 50 years 

ago. I can help that guy.’” 

As a businessman who benefitted from the Trade Sanctions 

Reform and Export Enhancement Act—the law that permitted 

food exports to Cuba after 2001—Johnson was deeply impressed 

with the power of the U.S. agriculture community. 

“A lot of the ag companies used their muscle to get the 

TSRA passed,” he says. “That’s what allowed me to export food 

products. If we could bring the power of agricultural interests and 

the states’ power together, we could really get something done.” 

Using that power 

That same rallying of forces described by Johnson also led to 

the creation of USACC in June 2014, about one year ahead of 

the re-establishment of diplomatic relations between the United 

States and Cuba. 

USACC’s Vorwerk has had a major role in pushing those 

efforts forward. A native of California’s Salinas Valley, and holder 

of degrees in agricultural economics from U.C. Davis and Cornell, 

Vorwerk began her career as an analyst at the World Bank, 

where she worked with in-country negotiators to implement 

agriculture agreements from the Uruguay Round of GATT (the 

General Agreement on Tariffs and Trade). That led to a position 

as an agriculture analyst with the International Trade Commission, 

where she helped produce a report in 2000 that examined 

the impact of removing U.S. sanctions against Cuba. 

“That’s where I got my first introduction to Cuba policy,” 

says Vorwerk. “I was a sugar analyst at the time, so I worked on 

the sugar chapter, which was significant.” She took that policy 

background to Cargill, where years later she was tasked with 

exploring Cuban markets as vice president for corporate affairs. 

Now, after a brief stint at Akin Gump, she is back at Cargill— 

where USACC got its start. 

“After having taken several trips down to Cuba, and having 

recognized how difficult it was to sell food to Cuba, and also 

understanding that the moment was right, I called a few people 

in the ag community and we decided that we wanted to form a 

coalition,” Vorwerk says. 

Today that coalition consists of more than three dozen 

national agriculture associations, agriculture councils from more 

than two dozen states, ag research centers, and a who's who of 

prominent agribusiness players such as ADM, Butterball, Sun- 

Maid, Smithfield Foods, and of course, Cargill. 

“Our interest is twofold,” says Van Yeutter, vice president of 

corporate affairs for Cargill. “One is on the policy level. We care 

about good policy at Cargill, and the notion of including food in 

a sanctions regime is inappropriate. Food should never be used as 

a foreign policy tool.” 

The second concern, Yeutter says, is economical. “Even 

though the Cuba market is small, it is a very logical market and 

the U.S. is a natural supplier,” he says. “To have U.S. farmers and 

ag producers cut out from that market doesn’t make sense… For 

many years Cargill was a supplier to Cuba, but when Helms-Bur- 

DEC 2016 

CUBATRADE 

65

The Lessons of 

CUBA 

One area where U.S. farmers can learn from their Cuba counterparts 

is in organic farming. When Mimi Arnstein visited the 

organic farms of Cuba, what stunned her most was how self-sufficient 

the farmers were. 

“They really have a much higher level of sustainability 

than what we call organic. They make U.S. farmers look like 

consumers,” says Arnstein, who runs a five-acre certified-organic 

spread in Vermont called Wellspring Farm. Whereas a 

U.S. organic farmer may require as much as half their ‘inputs’ 

from outside the farm—everything from organic fertilizer to 

tractor parts to black plastic—the Cuban farmer draws from 

the farm itself. “It goes beyond organic to low-input agriculture,” 

says Arnstein. “They can’t go out and buy supplies, so they 

have to produce all their own fertilizer, and supply all their own 

mechanical effort. Basically, they have to provide 90 percent of 

their agriculture inputs from the farm. That is hard to do.” 

In addition to joining the USACC on its fact-finding 

missions to Cuba, Arnstein has led other groups to meet with, 

and learn from, Cuban farmers. “The farmers I have met are 

very welcoming, very willing to share their knowledge with 

farmers from the outside, and proud of what they have accomplished,” 

she says. 

Margarita Fernandez, director of the Vermont Caribbean 

Institute, has led more than 20 delegations to Cuba over 

the years. She also believes that small U.S. farmers have a lot 

to learn from small Cuban farmers, who have mastered the 

art of adapting to limited resources. “Cuba is a very special 

case, isolated as it has been from the global economy for so 

long,” she says. As far as their products go, Fernandez notes 

that Cuban farmers produce organic citrus, coffee, chocolate 

and honey, all of which are currently exported to Europe as 

certified organic products. 

US Agricultural Exports to Cuba. 2005. $326 million 

16% Wheat 

15% Corn 

20% Poultry Meat 

& Products 

US Agricultural Exports to Cuba. 2015. $150 million 

52% Poultry (78m) 

1% Other (2m) 

11% Rice 

11% Other 

3% Corn (5m) 

11% Soybeans 

7% Dairy 

Products 

5% Soybean 

Meal 

4% Soybean Oil 

36% Soybean meal 

(55m) 

6% Soybeans (10m) 

World Agricultural Exports to Cuba. 2014. $1.9 billion 

Photo courtesy of Mimi Arnstein 

14% Dairy Products 

10% Rice 

11% Corn 

13% Wheat 

10% Poultry Meat 

& Products 

8% Soybean 

Meal 

5% Soybean 

Oil 

5% Feed & 

Fodder 

24% Other 

Mimi Arnstein (bottom) at an organic farm in Cuba 

Source: FAS Global Agricultural Trade System; US Trade Representative 


World and U.S. Agricultural Exports to Cuba 2005-2014 

1799 

1873 

2000* 

1704 

1731 

1674 

World 

911 

947 

1114 

1350 

1175 

Source: FAS Global Agricultural Trade System, 

Global Trade Atlas 

All figures in millions. *Estimated 

326 

336 373 

658 

570 

394 

346 

417 415 

U.S. 

300 

150 

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

ton [the 1996 law that strengthened the embargo] came about, 

Cargill’s ability to supply Cuba was basically taken away. That was 

not a good thing.” 

The Helms-Burton Act, signed into law by President Bill 

Clinton as he campaigned to win votes in Florida, not only 

tightened the embargo against Cuba but made it permanent, to 

be lifted only by an act of Congress. 

What’s at Stake 

Proponents of lifting the embargo note that while the size 

of the agricultural market in Cuba is not immense, it is sizeable 

enough to make an impact for specific agricultural sectors. 

Among these, few would see a more immediate impact than rice. 

Although U.S. rice production is dwarfed by that of China, India, 

Indonesia and Vietnam, those countries consume most of what 

they grow, while a huge percentage of U.S. rice is exported. 

“Having export markets is critical for American rice farmers, 

because half our rice is exported,” says Alice Gomez, a consultant 

for the U.S. Rice Producers Association (USRPA). “That is why 

we need to feed people like Cubans, because that means a new 

market. We may be number eleven worldwide in terms of acres of 

rice produced, but we are sending a lot of rice everywhere.” 

The USRPA has been working toward lifting trade restrictions 

on Cuba since it was formed 20 years ago, and helped push 

for the Trade Sanctions Reform Act that permitted food and 

medical shipments to Cuba. 

“During the first four years, when Cuba was able to buy, they 

bought enough rice to bring shipments back to high levels,” says 

Gomez. “But because of the reinterpretation [of TSRA] under 

the Bush Administration, we saw those rice shipments drop to 

zero.” That critical reinterpretation in 2005 required Cuba to pay 

cash up front—even before products were loaded—along with 

restrictions on using American banks. 

“We [the U.S.] extend credit all over the world, its part and 

parcel of trade,” says Gomez. “It’s an arcane provision that Cubans 

have to pay cash in advance, and use third-country banking 

institutions to pay.” That last element is particularly onerous, 

because Cuban banks are not allowed to have accounts in U.S. 

financial institutions. 

“Cuba was the top destination for U.S. rice pre-embargo,” 

notes Michael Kline, vice president for communications at USA 

Rice, which advocates for most of the industry, including millers, 

merchants and farmers. “We have always looked forward to the 

day we could return to this market. Why this hasn’t happened is 

the 600,000 metric ton question … you’d be hard-pressed to find 

someone who says the embargo has worked.” 

Lost to the Competition 

What riles many U.S. farmers is how foreign competitors are 

supplying Cuba with products they feel should be their sale. U.S. 

Wheat Associates estimates that Cuba imports 75 percent of its 

wheat from Europe and 25 percent from Canada. Total annual 

imports: Somewhere around 800,000 metric tons, currently 

valued at about $200 million a year. 

“We’ve been working on this issue for almost two decades 

as an organization, trying to do business in Cuba,” says Ben 

Conner, deputy director of policy for U.S. Wheat Associates, 

which develops export markets for wheat farmers. When TSRA 

DEC 2016 

CUBATRADE 

67

Illinois soy farmer Mark Albertson on a USACC trip to Cuba: We can regain the market 

was implemented in 2001, sales of U.S. wheat to Cuba, like rice, 

began to grow—until the Bush Administration changed the 

payment rules. 

“Prior to 2005 ‘cash in advance’ meant you could ship the 

product and once it got to the port, before unloading, the Cubans 

could pay for it,” says Conner. “Then in 2005 OFAC said that 

cash in advance meant that cash had to be paid even before the 

wheat got on the ships. That is highly unusual and increases commercial 

risk. It also exacerbated their cash problems.” Couple that 

with the U.S. prohibition on financing and, by 2011, wheat sales 

to Cuba had hit zero, where they have remained. 

Conner was part of a USACC delegation that went to 

Cuba in March of 2015, “a good will and fact finding mission, 

taking the first steps toward seeing the possibilities for trade in 

both directions.” In Cuba, Conner, Vorwerk and other USACC 

delegates met with the president of Alimport, Cuba’s state import 

agency, as well as farm groups. 

“Cuba is the largest wheat importer in the Caribbean,” says 

Conner. “Of all the U.S. commodities looking to get into Cuba, 

wheat has the most opportunity for growth, especially in the 

short term. There could be big demand for it in Cuba.” 

U.S. Advantage 

Wheat and rice are not the only U.S. ag products that Cuba 

needs. There is also a big demand for poultry and soy, so much 

so that despite the financial restrictions, they continue to buy 

these products from the United States. 

Mark Albertson is an Illinois soy farmer who participated in 

the USACC trips to Cuba, and who also directs strategic market 

development for Illinois Soybean Growers. “Chicken is the No. 1 

thing that Cuba imports from the U.S. right now, and soy is No. 

2,” says Albertson. Last year, Cuba imported $78 million worth 

of U.S. poultry and $65 million worth of soybean meal and oil. 

While those are not inconsequential numbers, they could be 

higher; Cuba imported in excess of $250 million worth of soy 

products last year, for example. “As soon as we can extend credit 

we think we can regain all of that market share,” says Albertson. 

“The industry standard is up to 180 days, but right now we can’t 

extend one day of credit.” 

Like other USACC members, Albertson’s soy association is 

in favor of ending the embargo, since that also would allow Cuban 

imports into the United States. Albertson says this is vital, because 

without products coming back in the shipping containers, cost goes 

up. “We don’t have back hauls,” Albertson says. “When we sell 

products to Cuba, those ships come back empty. And that means 

that you are paying for the freight twice. When you are dealing 

with ag products like soybean, freight is a big part of the cost.” 

Even with the added cost of empty containers coming home, 

proximity still provides advantages to the United States, including 

freshness and delivery on demand. “One consideration is the 

lack of storage capacity in Cuba,” says USA Rice’s Klein. “When 

they unload a boat from Vietnam, 15,000 to 20,000 tons of rice 

may be more than they can deal with—versus when they call us 

and say, ‘Send 1,000 or 2,000 tons,’ and can have it in a few days 

instead of three weeks.” 


Chicken is the number one thing that 

Cuba imports from the U.S. right now, 

and soy is number two. 

Mark Albertson, strategic market development, 

Illinois Soybean Association 

Soybean harvest in the Autumn


Tobacco farmers in Cuba attend a meeting with members of the USACC 

A Cooperative Effort 

One of the hallmarks of the push to lift the embargo against 

Cuba has been its bipartisan nature. In the divisive political 

climate of the Obama years, few legislative initiatives have been 

supported by both major parties. Cuba is an exception. 

On both a state and national level, the move to lift the embargo 

has engendered a spirit of bipartisan cooperation. When 

Paul Johnson spearheaded the Illinois Cuba Working Group, it 

was endorsed unanimously by the state legislature, as Johnson 

put it, “bringing together downstate Republicans and downtown 

Chicago Democrats. They all agreed.” 

When Arkansas’s Republican Rep. Rick Crawford sponsored 

a bill to eliminate the financial restrictions, it was co-sponsored 

by Democratic colleagues. 

“I think it is important for Americans to know that this is 

an American issue, not a one-party issue or a one-state issue,” 

says Vorwerk. “For so long, we have yielded this policy to a 

narrow group. I am not a Cuban American, I am an American, 

and as an American I want us to be able to work toward reconciliation.” 

For the USACC, the idea of cooperation extends beyond 

the bipartisan politics in Washington. The opening of agricultural 

trade is also a cooperative effort between U.S. and Cuban 

farmers, in a way that is unprecedented between U.S. and foreign 

growers. “I think the opportunities are mutually beneficial,” says 

Mike Espy, who served as secretary of agriculture during the 

Clinton administration, and who was part of the USACC team 

which negotiated a memorandum of understanding (MOU) with 

the Grupo Empresarial Agricola, Cuba’s farm industry association, 

in May of this year. 

“We are in a position to deliver food and ag products to 

Cuba at a tremendous savings,” Espy says. “They can benefit from 

our value-added foods, our technology, and our equipment. In a 

reciprocal way, we could import their fresh fruits and vegetables, 

and learn what they can teach us about sustainable farming.” 

The MOU that Vorwerk and her team hammered out covers 

a common agenda, including devising solutions for finance credits 

and two-way trade, as well as for exchanges involving direct 

investments, sustainability, research and development, and farmer 

training. “When we signed the MOU, we set up a framework to 

continue the dialogue,” Vorwerk says. And USACC shared its 

success with members of Congress. 

“In everything we do, whether it’s a trip or a speech, or 

whether it’s going up to the Hill, we are using our collective 

experience, that collective force of the private sector, that knows 

how to do business,” Vorwerk says. “We use all of that to inform 

Congress, so that they can make the right decision. This embargo 

needs to end.” H 


ARKANSAS 

LEADS THE 

CHARGE 

How One State is 

Spearheading the 

Effort to Open 

Agriculture Trade 

with Cuba 

Gov. Asa Hutchinson's 

historic trip to Havana 

Sen. John Boozman’s 

bill to lift restrictions 

Rep. Rick Crawford’s 

push in the House 

Arkansas Governor Asa Hutchinson

Arkansas: Outfront on Cuba Trade 

Arkansas is leading the U.S. in economic and agricultural collaboration with Cuba. And because 

Arkansas is the nation’s number one producer of rice as well as a national leader in poultry, we’re 

a natural for sprinting to the front of the pack when it comes to food-source trade with Cuba. 

In Arkansas, we’re proud to help our neighbors to the south by sharing our resources and our 

expertise — which in the end will help both economies to grow and prosper. 


ARKANSAS 

AGRICULTURE 

DEPARTMENT 

aad.arkansas.gov 

DEC 2016 

CUBATRADE 

73

ARKANSASREPORT 

If you are not from Arkansas, you might not understand why Asa Hutchinson 

was the first U.S. governor to visit Cuba after the resumption of diplomatic 

relations in December 2014. If you are from Arkansas, then you get it 

immediately. “Between 30 and 40 percent of the commodities we raise in 

Arkansas are exported,” says Randy Veach, president of the Arkansas Farm 

Bureau. “And agriculture is the largest industry in our state. That is why we have 

paid a lot of attention to Cuban trade opportunities.” 

For Mark Isbell, a fourth generation Arkansas rice farmer, 

the logic is inescapable: Half of the rice in the U.S. is produced 

in his state, and the island of Cuba—with the highest per capita 

consumption of rice in the Americas—should be its natural 

market. In fact, it once was. Before the U.S. embargo began in 

1960, Cuba was Arkansas’ largest export market. 

“As a farmer you don’t typically export rice yourself, that’s 

done through the mill and the distributor,” says Isbell, whose 

family farms 3,000 acres outside of North Little Rock. “But 

based on the quantities Cuba was buying pre-embargo, I’m sure 

that some of the rice my grandfather grew made it there through 

the supply chain.” 

Taking back that Cuban 

market, with its annual demand of 

some 600,000 metric tons of rice, 

would make a critical difference for 

Arkansas rice farmers now facing 

their lowest prices in years. “We have 

seen price reductions as much as 

40 percent over the last three years, 

down to $4.50 a bushel. A few years 

back you could sell it for $7.25,” says 

Isbell. 

The fact that an increase in 

demand could mean the difference 

between profit and loss for thousands 

of rice farmers was a big reason that 

Gov. Hutchinson visited the island in 

the spring of 2015. A second reason 

was poultry, Cuba’s top import from 

the U.S., and a leading commodity 

produced in Arkansas. 

“It’s an opportunity for Arkansas 

to open up the market in Cuba, 

and I also think reengagement 

with Cuba is right from a political 

standpoint,” says Gov. Hutchinson. 

While he supported the embargo as 

a Republican congressman, “I have 

a different view as governor,” says 

Hutchinson. “You see it over time 

and you see the opportunities.” 

For Michael Preston, Arkansas’ 

director of economic development, the search for global markets 

stretches as far as China. But Cuba, says Preston, holds a special 

place for the state. “We’ve had a historical trade relationship with 

Cuba, a strong history of trade with Cuba, and we can bring 

that back,” says Preston, one of the architects of the Governor’s 

precedent-setting trip. “Arkansas is one of the leading states in 

the country for agriculture production, number one for rice, and 

number two for poultry. Cuba just makes a lot of sense.” 

The fact that Arkansas is a staunchly red state made no 

difference to Gov. Hutchinson, who transcended party politics to 

support the Obama administration’s efforts to reopen trade with 

Cuba—one reason that Hutchinson, with a 62 percent approval 

rating, is among the most popular 

governors in the country. 

Agriculture is the largest 

industry in our state. It's a 

huge, huge economic engine. 

“We were very proud of the 

Governor for making that trip,” says 

Ben Noble, executive director of the 

Arkansas Rice Federation. “It was a 

bit of policy change for Hutchinson, 

since he served [as DEA director] 

under the Bush administration, whose 

policies were in the other direction.” 

Noble projects that if the Cuban 

market for rice were to reopen that 

Arkansas could realize $100 million 

in sales within a year. “It’s significant. 

It could easily put us in a position 

where they are right back as one of 

our top markets,” says Noble, himself 

a third generation rice farmer. “I 

remember when my dad used to talk 

about rice sales to Cuba.” 

Statewide Push 

Hutchinson is not alone among 

Arkansas politicians pushing 

to roll back the most damaging 

elements of the embargo, including 

the prohibitions against financing 

agriculture sales. Also spurring 

Congress to action are Arkansas Sen. 

John Boozman and Arkansas Rep. 


Randy Veach, President, Arkansas Farm Bureau

We had a historic trade relationship 

with Cuba… we can bring that back. 

Michael Preston 

Executive Director Arkansas Economic 

Development Commission 

Mel Torres, head of Latin America for the Arkansas World Trade Center, 

at the Hotel Nacional: We have excellent relations with the government 

Gov. Asa Hutchinson at a Cohiba factory in Havana: 

Trade with Cuba has to be two way so that both the 

U.S. and Cuba can benefit 

DEC 2016 

CUBATRADE 

75

Out in Front 

Gov. Asa Hutchinson has made it his 

mission to open new markets abroad for 

the highly productive farmers of Arkansas. 

We spoke with him about that endeavor 

in Cuba, and what it means for the state’s 

agriculture industry. 

Cuba Trade: Before your trip to Cuba, did you have an 

epiphany where you said, "The embargo is not working 

anymore. We have to change our policy"? 

Gov. Hutchinson: What I've said is the first step that we 

ought to take is to lift the credit restrictions… I believe 

that the legislation sponsored by Rep. Crawford and Sen. Boozman, which is directed at 

the credit side, is our best opportunity. So that's what I pushed. I was not pushing 

for a full lifting of the embargo. Let’s do this first step 

and let's see what the response is by Cuba. 

Cuba Trade: As a Republican governor you were fairly out front on this issue. Did you 

face any sort of blowback for supporting the initiative of a Democratic president? 

Gov. Hutchinson: Minimal. It was well received in Arkansas, because Arkansas has always 

had a worldview on trade... You asked me a minute ago whether there was any epiphany. 

I think it was just a studied response to history and where we need to go as a nation. 

Cuba Trade: On your trip to Cuba, how were your meetings with government officials? 

Gov. Hutchinson: The Cuban government officials are still talking about the revolution 

and the principles of the revolution, and how they want the embargo [unilaterally] 

lifted… [however] beyond them making their points to us, they were very constructive 

meetings. 

Cuba Trade: Do you think we should require political concessions from Cuba before 

lifting the embargo? 

Gov. Hutchinson: Well, there are a lot of underlying issues that have to be resolved… I 

think that before the embargo would be [fully] lifted there needs to be some sort of 

resolution of the Cuban claims against the United States and vice-versa. 

Cuba Trade: Has there been any net change since your visit, in terms of shipments or 

commodities coming out of Arkansas. 

Gov. Hutchinson: Within one month of my return to the United States, Cuba purchased 

4,500 tons of [Arkansas] poultry, which was with Simmons Foods who was 

with me on the trip and Tyson. So that was a very tangible success. I haven't had any 

other reports of sales, but hopefully it will continue. 

Cuba Trade: What does the future hold for Arkansas and Cuba? 

Gov. Hutchinson: We are aggressively continuing our efforts to have a presence there… 

Arkansas wants to be in a position to be first in line to market our rice and poultry and 

have exchanges. But it’s not just that. We've got business people looking at opportunities 

there. And we want to make it a two-way street so that Cuba can benefit from it, as 

well. 

Cuba Trade: Do you think more open trade will liberalize the Cuban regime? 

Gov. Hutchinson: Well that's our hope, and certainly, it has to be acknowledged that the 

Cuban regime has been oppressive. And we should not ignore that side of the equation. 

So the objective is not just to open up our trade to benefit ourselves, but the objective 

is also to create an environment with more freedoms for the Cuban people. 

Rick Crawford. Both introduced bills 

to Congress to change the restrictions 

that make it all but impossible to do 

business with Cuba. 

“Nationwide, the rice industry 

accounts for 125,000 jobs and 

contributes more than $34 billion the 

U.S. economy,” said Boozman on the 

Senate floor earlier this year. “Rice 

farmers all across America would 

benefit from a change in policy with 

Cuba.” 

While rice is the poster child for 

trade between Arkansas and Cuba, 

it is far from the only player. On the 

agriculture side there is also chicken, 

a big ticket item for a state with a 

chicken population of 123 million. 

Even with the embargo in place, 

Cuba bought $147.5 million worth of 

chicken in 2014 from the U.S.—and 

$1 billion worth over the past 15 

years—mostly in the form of ‘broilers’ 

for consumption, versus poultry for 

breeding or egg laying. 

Accompanying the governor 

to Cuba was Mark Simmons, the 

president and CEO of Simmons 

Foods, one of Arkansas’ top poultry 

producers. At the time of the trip 

Arkansas was still on the list of banned 

providers, a holdover from the days 

of the avian flu. “We met with their 

importers and got that ban removed,” 

says Simmons. “Shortly thereafter we 

were able to ship a boatload of product 

into Cuba, and subsequently we made 

two more shipments.” 

In all, Tyson sold Cuba about 

18 million pounds of chicken worth 

approximately $5 million. But don’t 

assume you’ll be eating any Arkansas 

chicken if you travel to Cuba, says 

Simmons. “If you go into a private 

restaurant in Cuba, our product is 

not in those channels. Our product 

is primarily leg quarters going into 

national food distribution by the 

government. We are missing out on 

a huge segment of the consumption 

there that is going to grow as Cuba 

opens up to the U.S. [tourists].” 

Beyond agriculture there are other 

opportunities, such as technologies 

where Arkansas has competitive 

advantages that match Cuban 

demand. The state’s number one 

non-agricultural industry, for example, 


SAM WALTON 

DIDN’T DISCOUNT 

ARKANSAS. 

It wasn’t by accident that Sam Walton chose Arkansas to launch his idea of a store featuring everyday, 

low-priced goods. He knew that this was the perfect place to build what would become the world’s 

largest retailer. Now Arkansas is channeling the same pioneering spirit behind companies like Walmart 

as we lead the United States in building business relationships in Cuba. That forward-looking vision 

and an attractive business climate are enabling industries from around the globe to find themselves 

in Good Company here. 

Sam Walton, Founder 

Wal-Mart Stores, Inc. 

ArkansasEDC.com | 1-800-ARKANSAS 

DEC 2016 

CUBATRADE 

77

ARKANSASREPORT 

Rep. Rick Crawford (standing, right) talks to U.S. Ambassador-nominee to Cuba Jeffrey DeLaurentis (standing, left) during a meeting at the Embassy in Havana 

is aerospace equipment and services; here Arkansas could help 

with the upgrade of Cuba’s aviation facilities, currently being 

contracted to French and Russian companies. 

Another area of expertise is renewable energy—a priority 

for Cuba—which is why Bradley Mannis joined the governor’s 

mission to Cuba. Mannis is the CEO of Mannco Environmental, 

which installs wastewater treatment systems that turn the leftover 

sludge into organic fertilizers. “I saw multiple economic opportunities 

in Cuba,” says Mannis. “There is certainly a big opportunity 

for private investment because the infrastructure needs huge 

work.” 

Mannis has been invited back to Cuba several times, and has 

hosted Cuban officials in Little Rock, but so far has concluded no 

deals. The problem, he says, is the U.S. prohibition against using 

lines of credit. The inability to finance infrastructure projects— 

standard operating procedure in the U.S.—makes them almost 

impossible to execute. 

Even when capital is not an issue, the presence of the 

embargo—and all the legal, banking, and political challenges it 

imposes—is enough to kill most potential deals. 

Burt Hanna, CEO of Hanna’s Candle Company, traveled 

with the governor and has been back several times, including 

twice this year. Hanna’s firm manufactures up to 60 million 

candles a year in Arkansas, and can easily meet Cuba’s needs. 

“They make 10 million candles a year and they need 20 million 

more,” says Hanna. 

What Hanna proposed—and for which he signed an 

MOU—was to supply $1 million in manufacturing gear to a 

Cuban candle manufacturing company in exchange for half the 

profits. With his equipment, the factory could produce 6,000 

candlesticks an hour with two workers. “I don’t think anybody 

can change the world with candles, but we’d like to be a little part 

of it,” says Hanna. But until the embargo is lifted, he’s going to 

wait on the sidelines. 

Another frustrated investor who has traveled to Cuba 

repeatedly is Arkansas real estate developer Bruce Barrow, 

who launched a company called U.S. Cuba Holdings—only 

to find U.S. restrictions to be impenetrable. Beyond real estate 

development, he has lobbied the federal government to consider 

oil drilling off the coast of Cuba, only to be ignored. “I brought 

back maps and met with [various government officials],” says 

Barrow. “I never heard another word…. Someday you will wake 

up and there will be an oil derrick in the Gulf with the name of a 

Chinese or Iranian company on it.” 

A Warm Reception 

Barrow contends that most Americans are woefully ignorant 

about Cuba and its people. “I got down there and got off the 

plane and said, ‘Boy, have we been lied to.’ I expected sand bags 

and Beirut. But the reception was beyond belief.” Unlike his 

fellow Arkansans who want to open the market, Barrow says the 


Gov. Hutchinson (center) and Michael Preston 

(center front): At play with a Cuban team 

Wes Ward, Arkansas’ Secretary of Agriculture: Lifting the embargo is a step-by-step process 

View of the Capitol along the Arkansas River. 

DEC 2016 

CUBATRADE 

79

Crawford's Campaign 

Rep. Crawford (left, standing) at aCuban market. 

One of the leading proponents of changing the U.S. relationship 

with Cuba is Arkansas Congressman Rick Crawford 

The long march to lift trade restrictions with Cuba gained momentum 

earlier this year, when bill HR 3687—designed to lift the ban on agriculture 

credit purchases by Cuba—was successfully attached to a major house 

Financial Services appropriations bill with bipartisan support. While the 

bill was later withdrawn under intense pressure by Florida’s congressional 

delegation (with an agreement to bring it back next year), it was still a 

watershed moment for Arkansas Rep. Rick Crawford, who co-sponsored the 

bill. 

“I’ve been an advocate of this for a long time, working with Arkansas 

agriculture, and seeing the value proposition for our state,” says Crawford. 

“We are not trying to make a judgement in favor of Castro, or against 

Obama, this is just what is best for both countries.” 

Crawford is quick to point out the hypocrisy of the Cuban trade embargo. 

“It’s inconsistent with our relationship with China since 1972, even with 

the Soviet Union during the Cold War. In 1985 the US had $2.3 billion in 

exports to the Soviet Union, and that was at the height of the Cold War,” 

he says. “We fought a hot war with Vietnam for many years, but since 2001 

we have seen exports to Vietnam increase 1,200 percent. What has changed 

there? They are still a communist regime.” 

As for his withdrawn bill, says Crawford, “I will try to move it after the 

election in the lame duck section. Who knows? We might be able to get our 

heads together and push this across the finish line. I’m an optimist.” 

better play is to invest. “We have all these 

people running down there to sell things 

to Cuba, but they have no money to buy… 

My focus is not to go down and sell, but 

to create joint ventures that will create a 

new future.” 

Like Barrow, economic development 

director Preston did not know what to 

expect on the trip to Cuba. “Going down 

there for the first time myself I was a 

little apprehensive. What are we about to 

embark on? It’s not a country that we have 

dealt with. But I can’t say enough about 

the Cuban people and their friendliness 

and their welcome for us. The government 

officials as well… Everywhere we went we 

were greeted with good wishes and open 

arms.” 

As part of the Arkansas-Cuba 

diplomacy, Preston and the governor both 

played a game of basketball with a Cuban 

team. Despite the governor’s greying 

hair, he is in remarkable physical shape— 

something which allows him to maintain 

his punishing pace as a governor who 

likes to engage with people. Among his 

weekly routines is a 7 am Friday morning 

basketball game with staff, including 

Preston. 

“One of the fun things we did [in 

Cuba] was play basketball,” says the 

Governor. “I like pickup basketball but 

this was a little bit more of an organized 

game than I expected. And they were nice 

to me. They treated me like they thought 

a governor should be treated—a little 

too gingerly at first.” When Hutchinson 

noticed that they weren’t blocking his 

shots, “we actually called a timeout to say 

that it’s okay to foul me!” 

Long Term Relationships 

When Cuba held its annual International 

Fair in November, where companies from 

around the world set up shop at the vast 

ExpoCuba center outside of Havana, Arkansas’ 

representative was Mel Torres, the 

head of Latin America for the Arkansas 

World Trade Center. While his booth 

carried sample bags of the state’s coveted 

long-grain rice, Torres was in Havana primarily 

to continue the dialogue with Cuba 

which the Governor’s trip jumpstarted. 

“Right now, when we talk about 

doing business with Cuba, we are 

talking about doing business with the 

government,” says Torres, “And we have 


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Sen. Boozman’s Bill 

After years of trying, Arkansan Sen. John 

Boozman was able to attach his bill easing trade 

restrictions with Cuba to the 2017 Senate appropriations 

bill. Next comes the lame duck session. 

“I was elected to Congress in 

2001 and became a member 

of the Cuba working group, 

which was half Democrat and 

half Republican. We were of 

the belief that we should be 

able to trade with Cuba like 

the rest of the world,” says 

Arkansas Republican Sen. John 

Boozman. 

Flash forward 15 years, and 

Boozman’s conviction finally 

materialized. Earlier this year, an 

amendment to allow American 

farmers to use private financing 

for exporting commodities to 

Cuba successfully passed the 

Senate Committee on Appropriations 

by a 22-to-8 vote. 

“Everyone felt we were doing 

the same thing [the embargo] 

for decades and nothing was 

happening,” says Boozman. 

“I think the way to change 

the world is through person 

relationships,” including 

business relationships. “We 

trade with people with a lot 

worse human rights records 

[than Cuba].” 

Sen. Boozman 

I think too that 

if you lifted the 

embargo today 

Cuba would not 

be ready for it. I 

think it’s going 

now at a steady 

pace and we are 

moving in the 

right direction. 

What happens next with Boozman’s amendment, which 

was co-sponsored by Montana Democrat Sen. Jon Tester, 

is that it becomes part of the final appropriations bill for 

next year, hammered out between the Senate and the 

House. 

“It’s a good feeling in the sense that we have gotten this 

far,” says Boozman. “But it will come to a head before the 

new year.” 

While Boozman feels that the process of rapprochement 

with Cuba is now like “a snow ball going down a hill,” 

he also believes that it will take more steps before the 

embargo is fully lifted. “I think too that if you lifted the 

embargo today Cuba would not be ready for it. I think it’s 

going now at a steady pace and we are moving in the right 

direction.” 

an excellent relationship with the Cuban government. We both 

have products the other wants, and we want to do business 

immediately. But we can’t because of the embargo.” 

Having said that, Arkansas is intent on growing its 

relationship with Cuba for the time when the embargo is lifted. 

Having organized the private sector trade-mission part of the 

Governor’s 2015 visit, Arkansas’ WTC has since arranged a visit 

by Cuban embassy officials to Little Rock and has led other trade 

missions to the island; they have also engineered the signing of 

several MOUs between Arkansas and Cuba. 

“We encourage educational exchanges, including professor 

and student exchanges, in addition to commercial match making 

and trade,” says Torres. “And it’s far from one-sided. There are 

many things where Cuba can supply the expertise—they have 

done a lot of R&D on farming organically—and they have great 

products that would be very appealing to the U.S. market. There 

are multiple synergies.” 

When it comes to the technology of rice and chicken 

growing, however, the University of Arkansas is in a class of its 

own—and happy to share its expertise. 

Dr. Mark Cochran, vice president for agriculture at the U 

of A, travelled with the governor to Cuba last year and returned 

again this past summer. As the head of agriculture research at the 

university, he is a proponent of intellectual exchanges with Cuba. 

“We are eager to play a role in creating opportunities. We are 

looking at faculty and student exchanges, research collaborations, 

and a visit from Cuban poultry scientists to spend time in our 

poultry labs,” he says. With its Center of Excellence for Poultry 

Science, U of A has a lot to offer, says Cochran. “The science 

behind poultry production is quite sophisticated. The notion that 

you have chickens running around in the yard isn’t realistic.” 

On the other hand, says Cochran, U of A researchers 

would like to learn how Cuban poultry growers have done with 

fewer antibiotics, as well as fewer fossil fuel inputs into their 

farming methods. “We are interested in what we can learn from 

them about that, and they can learn from us, and that is a good 

foundation for building relations.” 

To that end, one of the university’s leading rice scientists, 

Dr. Eric Wailes, spent three weeks in Cuba this past spring 

researching the rice sector. Wailes said he looked at all aspects— 

from growers to millers to storage to open market stores—to 

see how the industry might be improved. While there could be 

bigger yields with better genetic stock, Wailes concluded that 

Cuba could not develop the same kind of competitive advantages 

with rice that it enjoys with sugar, tobacco, coffee and tropical 

fruits. 

The other thing he discovered was that, given the choice, 

Cubans prefer the kinds of rice grown in Brazil and Arkansas, 

rather than the rice that is currently being imported from 

Vietnam, thanks to its generous credit terms. 

“Vietnamese rice is not of the quality of U.S. rice,” says 

Wailes. “When it’s been on a boat for a couple of months, 

and milled months before that, there is a deterioration of 

quality. So we have two things going versus Vietnam—quality 

competitiveness and logistic competitiveness.” 

The real competition is coming from Brazil, however, which 

has not only been exporting to the Cuban market for years, but 

also paid for the buildout of the Port of Mariel and retrofitted 


Arkansas: The State of Agriculture 

State Agriculture Overview 

Number of Farms ................43,500 

Acres Operated .............13.8 million 

Total Value of Ag Products Sold: $9.7 billion 

Livestock: $4.9 billion 

Total Crops: ........ $4.8 billion 

Source: USDA National Agriculture Statistic Service, as of January 2016 

Livestock 

Chicken .....................962 million 

Turkeys. . . . . . . . . . . . . . . . . . . . . . 27.4 million 

Cows .........................2.7 million 

Hogs ............................166,000 

Crops Produced (2015, value) 

Soybeans $1.47 billion 

Rice $1.10 billion 

Corn $330 million 

Sorghum $187 million 

Cotton $136 million 

Wheat $70 million 

Sweet Potatoes $20 million 

VAN 

BUREN 

FORT 

SMITH 

POULTRY 

ARKANSAS RIVER 

LITTLE 

ROCK 

R 

I C E 

From the ports of Fort Smith, 

Little Rock and West Memphis, 

commodities can head down the 

Arkansas and Misssissippi Rivers to 

New Orleans and from there to Cuba. 

Top Agricultural Exports (2014, value) 

Soybeans $995.5 million 

Rice $809.3 million 

Broiler Meat $475 million 

Cotton $245.8 million 

Soybean Meal $229 million 

S O Y B E A N S 

MISSISSIPPI RIVER 

OSCEOLA 

WEST 

MEMPHIS 

Source: USDA National Agriculture Statistic Service, as of January 2016 

Source: USDA ERS 

DEC 2016 

CUBATRADE 

83

Gary "Baseball" Heathcott 

Gary Heathcott, accepts the Man of the Year award at the Habanos Festival . 

A long-time political advisor to the Governor, Gary Heathcott is 

Arkansas’ Mr. Cuba. 

For each of the last 18 years an audience of well-heeled business leaders 

from some 60 countries, along with celebrities from the worlds of film, art 

and fashion, have gathered in Havana for the Habanos Festival. The event is 

a celebration of the Cuban cigar—and a fundraiser for the Cuban healthcare 

system. In 2015, $540 million euros were raised, including from the auction of 

rare, handcrafted humidors. 

That year also marked another event: The first time an American won the 

presitigious Man of the Year award. Before an audience of 1,600 (including 

Paris Hilton and Naomi Campbell) the award went to Gary Heathcott, a marketig 

consultant for Arkansas. “I had no idea I was even nominated for that 

award,” says Heathcott. “It was really a surprise.” 

Not so surprising when you consider that Heathcott has been travelling to 

Cuba since 1990—some 78 trips by his count—and along the way has become 

a minor legend on the island for his charitable efforts. Known as ‘Gary 

Baseball’ because of all the gloves, balls and bats he donated to Cuban kids 

over the years, he has also contributed heavily to Cuban healthcare, including 

a $34,000 pediatric gastroscope that enabled a children’s hospital to operate 

its Olympus endoscopy system. 

The award, however, was for his years of promoting the Cuban culture in 

some 60 published articles and though documentaries such as Footprints in 

the Sand: Hemingway’s Cuba, El Ritual de Los Cohiba, and Cuba’s Daiquiri—the 

Original (yes, he knows how it was invented). 

Heathcott has also worked to promote business ties between Arkansas and 

Cuba, including a widely publicized event in 1995 where he played a role in 

orchestrating the delivery of a container of Riceland rice to Cuba via the 

Catholic Relief Services. “U.S. ag producers couldn’t legally sell anything to 

Cuba, but you could contribute a container of rice to a charity. We were 

trying to create a little detente between the countries.” 

A long time friend and consultant to Gov. Asa Hutchinson, Heathcott was 

an advocate for his state visit to Cuba—and the back channel for the Governor's 

basketball game there. “We set it up with a Cuban national team,” says 

Heathcott. “About ten minutes into the game the governor called a time out, 

and said, ‘Guys don’t stand out of the way when I come in for a layup. Play!’” 

most of the rice production plants in 

Cuba. 

“There is no guarantee that the 

lowest price and best quality will 

gain the market. Statecraft plays an 

important part of that,” says Wailes. 

“The Arkansas Congressional delegation 

realizes that and is trying with great 

tenacity to promote relationships, 

to have meetings with officials, and 

so forth. That is an element which 

should not be underestimated, and why 

Arkansas is looking for decisions out of 

Washington.” 

Those decisions, at least from Gov. 

Hutchinson’s point of view, do not need to 

include—indeed should not include—an 

immediate full lifting of the embargo. 

Rather, the state’s policy is that the U.S. 

should continue to gradually roll back 

restrictions, beginning in the critical area 

of finance. 

“Hutchinson’s message is that you 

are not going to kick the door open 

immediately, and that is fine, because they 

are not ready for a complete U.S. invasion. 

They are still trying to figure out how to 

get enough toilet paper into the country 

for Americans,” says Rush Deacon, CEO 

of the Arkansas Capital Corporation 

Group, which is prepared to finance small 

businesses interested in doing business 

in Cuba. “I have been to Vietnam, and 

they have figured out how to blend 

Communism with Capitalism. So has 

China. But Cuba has not yet.” 

Wes Ward, the Secretary of 

Agriculture for the State of Arkansas, 

traveled with the governor in 2015 and 

returned for a second visit this past 

June. “I’ve already seen pretty significant 

changes. There are cruise ships in Havana 

now, and more Americans are coming 

down,” he says. “The U.S. influence is 

already being seen; even if it’s non-U.S. 

companies investing, we are creating some 

of those changes.” 

For Ward, like the governor, the 

ground game is one of small advances 

and incremental gains. “From my own 

perspective it’s a step by step process. 

The first step is lifting the financing 

restrictions, so there is an opportunity to 

normalize that trade. Then we have to lift 

the travel restrictions. And then just follow 

common sense. I think all of agriculture 

will benefit, in both directions.”H 


DEC 2016 

CUBATRADE 85

ARKANSAS. 

WHERE 

LEGENDS ARE 

BORN AND 

FUTURES 

ARE MADE. 

As home to business and cultural icons like Sam Walton and 

Johnny Cash, Arkansas’s past is quite distinguished. However, 

it’s our future that we’re even more excited about. The 

pioneering spirit that yielded these and other legends is now 

powering our commitment to doing business in Cuba. We look 

forward to strengthening our relationship and leading the 

United States in this venture that’s good for our state, our 

country and for the people of Cuba. 

ArkansasEDC.com • 1-800-ARKANSAS 

Arkansas.com/CASH • 1-800-NATURAL

notebook 

The initial commercial flights to Cuba have been 

to provincial cities, far from Havana and far less 

expensive than the capital. 

By Larry Luxner 

A Visit to Santa Clara 

In rural Santa Clara, horse-drawn carriages are still a common sight 

Caterpillar may be one of several U.S. 

multinationals hoping to do business in 

a post-embargo Cuba, but for now, the 

island’s most famous Cat is a bright yellow 

bulldozer atop a concrete pedestal overlooking 

downtown Santa Clara. 

In late 1958, Ché Guevara’s rebel 

column used this Caterpillar to rip up 

railroad tracks and derail a train carrying 

government soldiers loyal to dictator 

Fulgencio Batista. The ambush led to the 

capture of Santa Clara and Batista’s overthrow 

(he fled Cuba days later) ensuring 

the bulldozer a prized place in the annals 

of the Revolution. 

Shortly before 11 a.m. on Aug. 31, 

2016, Cuba’s fifth-largest city made history 

again when a colorful JetBlue Airbus 

touched down at Santa Clara’s Abel 

Santamaría International Airport. Flight 

387 from Fort Lauderdale marked the first 

direct commercial air service between the 

United States and Cuba since 1961. 

DEC 2016 

CUBATRADE 

87

A new chapter: A U.S. tourist shopping in Santa Clara 

The Cuban government is very conscious that Havana’s 

hotels are already maxed out, and I think it would like to 

see more tourism dispersed to the province... 

Nine days later, I boarded that same 

flight. Although I could no longer book 

the $99 introductory one-way airfares 

widely advertised, my $436 round-trip 

ticket from Baltimore, Md.—with a onehour 

layover in Florida—was a relative 

bargain; only a few years ago such a trip 

would have cost $900 on a charter airline, 

not to mention the hassle of obtaining a 

license to travel from the Treasury Department’s 

Office of Foreign Assets Control 

(OFAC). 

While the arrival of U.S. commercial 

flights is supposed to trigger a surge 

in American tourists, none of my fellow 

passengers were tourists in the true sense. 

Most appeared to be Cuban-Americans 

returning––some for the first time in 

decades––to the land of their birth. 

Before boarding, each of us had to 

fill out applications for Cuban visas ($50 

each, payable by credit card) and complete 

a form explaining the purpose of travel; a 

Cuba travel expert Christopher Baker 

JetBlue employee told me this information 

is sent to Cuba before the flight lands. 

The flight from Fort Lauderdale took 

just 43 minutes, and when we touched 

down in Santa Clara the 100 or so passengers 

on board applauded loudly, a few of 

them overcome with emotion. Many took 

selfies as they clambered down to board 

buses for the arrivals terminal. 

It’s not clear why Santa Clara—a 

sleepy provincial capital of 200,000— 

was chosen to receive Cuba’s first direct 

commercial U.S. flight. Perhaps it’s the 

airport’s 9,900-foot asphalt runway, or 

because Santa Clara is located in the 

center of Cuba, about 175 miles east of 

Havana. Whatever the reason, one thing 

is clear: This city is not yet crawling with 

American tourists—or tourists of any kind 

—though that prospect is one Cuba would 

like to see unfold. 

“The Cuban government is very 

conscious that Havana’s hotels are already 

maxed out, and I think it would like to see 

more tourism dispersed to the provinces,” 

says Cuba travel expert Christopher Baker, 

author of the Moon Cuba guidebook. “That 

said, the majority of passengers on these 

provincial flights will undoubtedly be Cuban-Americans 

returning to visit family 

outside Havana.” 

Santa Clara’s top tourist draw is its 

sprawling Che Guevara Mausoleum, a 

shrine to Cuba’s iconic revolutionary. 

Here, visitors can see artifacts that include 

the porcelain enamel “Villa Chichita” 

street sign from the Argentine village 

where he grew up and the black field 

telephone he used in the 1958 battle of 

Las Villas. Not far away is Tren Blindado, 

the site of the famous train ambush, and 

Parque Vidal, Santa Clara’s downtown 

main square lined with museums and 

historic buildings; Jewish tourists will be 

intrigued by a small Holocaust memorial 

on the outskirts of town. But for now, it’s 

ethnic travel rather than foreign tourism 

that will generate revenue for Santa Clarabound 

aircraft. 

“We’re thrilled with the service. It 

couldn’t have gone better,” said JetBlue 

spokeswoman Danielle Sandars, who 

explained why only 100 passengers were 


Santa Clara's top tourist attraction is the 

Che Guevara Mausoleum 

aboard an aircraft with 150 seats: Excess 

baggage. “On some of the flights, we’ve 

had weight restrictions, so we have to keep 

it at a lower number of passengers.” 

Because of Santa Clara’s relative 

rural isolation, horse-drawn carriages and 

1950s-era Chevrolets, Fords, and Buicks 

are far more numerous on its streets than 

in more modern Havana. Prices are also 

much lower here as well. 

Many shops and restaurants list 

prices in both moneda nacional or Cuban 

pesos—which are worth 24 to the dollar 

—and in the much more valuable pesos 

convertibles or CUCs, worth slightly more 

than a dollar each. 

For example, at the Rincón del 

Sandwich restaurant just off Parque Vidal, 

you can enjoy a cheeseburger for 30 pesos 

($1.25) or a hot dog for only 10 pesos (42 

cents). Drinks are priced in convertible 

pesos: daiquiris or mojitos for 1.50 CUC, 

and a glass of sangria for 1 CUC. 

Lodging in Santa Clara is also much 

cheaper than Havana. I booked a lovely 

room at Hostal La Caridad, a private 

home in walking distance of Parque Vidal, 

for $18 per night, or $54 for my threenight 

stay—the same as Airbnb’s average 

rate of $54 a night for a room in Havana. 

Transportation is also inexpensive, as 

long as you don’t rent a car. The day before 

my departure, I traveled from Santa Clara 

to the coastal city of Cienfuegos—onehour 

south—in a red 1952 Hillman for 

the equivalent of $10. The morning of my 

flight back to Fort Lauderdale, I flagged 

down a beat-up 1978 Lada, whose driver 

charged $5 for the trip to the airport. 

Here, thanks to recent regulatory changes, 

I could buy an unlimited amount of rum 

and cigars for personal use. That’s a far 

cry from the previous $100 maximum in 

combined alcohol and tobacco products. 

But until the embargo is abolished, don’t 

expect retail sales at Santa Clara’s airport 

––or anywhere else—to take off. 

“Any American can legally just hop 

on a plane to Cuba and follow their own 

itinerary under the people-to-people 

category, and all they have to do is sign an 

affidavit, provided by the airline, that they 

are doing so,” says Baker. “The majority 

of Americans simply aren’t aware of this. 

It will be a gradual process of generating 

such awareness, but I don’t think we’ll 

see wholesale change until the travel 

restrictions are lifted entirely.” H 

Santa Clara's main square is lined with historic buildings 

DEC 2016 

CUBATRADE 

89

LIFESTYLE 

Cuba Ahora: 

The Next 

Generation 

Cuban artists born after 1980, unlike 

some of their predecessors, have no desire 

to leave the island. And why should they? 

Their work would lose its value. 

By J.P. Faber 

Gabriela García Azcuy 

Cuban art historian 

and curator 


The new generation of Cuban visual 

artists who came of age in the last decade, 

during the reforms that began when Raul 

Castro became president in 2006, are 

markedly different from their predecessors––and 

not just in their new sense of 

aesthetics. 

“Raúl [Castro] has been more focused 

on the economic scene and less on 

politics,” says Cuban art historian Gabriela 

García Azcuy. “Everyone thinks that 

everything is political in Cuba, but it’s not 

like that today. They [the artists] are thinking 

instead about how to become artist-entrepreneurs 

and improve their lives.” 

Another major contrast with earlier 

artists is that the new generation is not 

as interested in leaving the island, as did 

many artists in the 1990s. Instead of living 

abroad, they are staying home, and for 

good reason. International art collectors 

today prefer to buy art created by Cuban 

artists in Cuba, not by exiles. 

“This has been a recent complaint 

of artists [living aboard], so much so 

that Cuban artists who have been living 

outside Cuba since the 1990’s will 

maintain a studio in Cuba, even if they 

are not there all the time,” says Ariana 

Hernandez-Reguant, PhD, editor of 

CubaCounterPoints and an expert on the 

business of the arts in Cuba. “There is a 

mystique about Cuban artists, and that is 

what collectors want.” 

The young artists of Cuba are well 

aware of this, says García. The generation 

born in the 1980s, and which grew up 

in the rough times of the Special Period 

of the 1990s, came of age with the idea 

that their art could be sold, first in Cuban 

galleries, then in international galleries. 

“They grew up with the art market 

and are very comfortable with that,” says 

García “They speak English and use 

credit cards. They have visas [to travel] 

but it’s more strategic to live in Cuba. 

That is one difference between them and 

the older artists.” 

'Holding Oneself, Full of Faith and Hope' by Grethell Rasúa 

DEC 2016 

CUBATRADE 

91


There is also a big difference in visual 

style, which is what García sought to display 

with an exhibit she recently curated 

at Washington, DC’s Art Museum of the 

Americas: (Art)Xiomas – Cuba Ahora: The 

Next Generation. It was the first exhibit 

of Cuban art at the OAS museum since 

1962. A collection of works by 15 artists, 

all born in the 1980s, the show will be on 

display in various U.S. cities next year. The 

exhibit combines painting, photography 

and installations––all visually stunning. 

“In the last 10 years everything has 

changed in the visual arts,” she says. “The 

majority of their work is about who we 

are and our place in the world. It is very 

personal. But it is also devoted to the art 

itself. What is important are the aesthetics. 

All the elements of the piece have 

to be perfect. Earlier [Cuban] art was 

conceptual art.” 

Among the artists represented are 

Frank Mujica, a “traditional” painter 

who works only in black and white. His 

objective, says García, is to put the human 

element in otherwise non-human landscapes, 

such as the folded shrouds floating 

before a cold and distant mountain range 

in his 2016 “Sin título (Díptico)” – “Untitled 

(Diptych).” 

Another of the artists is Jorge Otero, 

who has a unique technique of sewing 

textures into photographs. His works in 

the show include three images from his 

2013 “War Hero” series, all depictions of 

the Cuban farm worker. 

“His series is about identity, about 

the new paradigm for the Cuban citizen,” 

says García. “The Guajiro [Cuban slang 

for a person from the countryside] in the 

popular imagination is an old person. But 

Otero transformed him into a strong, 

handsome person, a new identity.” 

The most arresting image of the show 

is a photograph by Grethell Rasúa, who 

provocatively “uses the parts of the body 

Frank Mujica’s “Sin título (Díptico)”

Two photographs (left and right) 

from Jorge Otero's “War Hero” series 

that nobody wants—blood, hair, mucous, 

sweat, nails—to make beautiful things, 

like jewelry and dresses,” says García. 

Her “Holding Oneself, Full of Faith and 

Hope” is a 2012 photograph of bloodied 

dance shoes being worn by Cuban ballerina 

Estheysis Menendez; it is a moving 

testament to the sacrifices made by individual 

artists in pursuit of perfection. 

García herself came from the same 

education system that produced the new 

generation of Cuban artists. While she 

graduated from the University of Havana 

with a degree in art history, all of the artists 

exhibited are graduates of the Instituto 

Superior de Arte (ISA). Founded in 1976 

by the government, ISA is considered the 

most prestigious arts academy in Cuba. 

It was García’s youth, she says, that 

led to the Cuba Ahora project. Three 

years ago García (now 27) was working 

as a curator for the Galliano Gallery 

in Havana. At the time her mother 

was working for the Spanish embassy, 

which also served as a cultural center for 

lectures, exhibitions and performances. 

I’m the youngest in the group - the artists are all older 

than me but somehow we are part of the same generation. 

The embassy held a weekly show by 

emerging artists entitled Los Jueves 

del Embajada, or Embassy Thursdays. 

During one of these events García was 

approached by cultural consul Pablo 

Platas, the event’s organizer. 

“You are a curator and very young,” 

García recalls being told by Platas, who 

had visited the gallery where she worked. 

“Do you want to create an exposition of 

these artists for us?” 

With funding from SPAIN arts 

& culture, a conduit for Spanish 

government grants to support the arts 

as a way to bridge gaps between nations, 

García put together a show entitled 

“Visitantes” (visitors). “That was the 

genesis of the current [Cuba Ahora] 

show,” she says. “I’m the youngest in 

Art historian and curator Gabriela García Azcuy 

the group—the artists are all older than 

me—but somehow we are part of the 

same generation.” 

It is that generation—those born 

in the 1980s, and who came of age after 

2000—which García believes represents a 

new wave of Cuban visual artists. 

For her show García coined a new 

word, Artxiomas, a variation of the word 

Axiomas, referring to the rubrics of 

philosophy. These works represent the 

axioms of art, she believes, reflecting 

the principles of medium rather than a 

political message. Prices for these works 

range from $3,500 to $6,000 for Otero’s 

“War Heroes,” to $8,000 for Rasúa’s 

ballet shoes (both are photographs 

limited to 7 editions), to $25,000 for 

Mujica’s painting. H 

DEC 2016 

CUBATRADE 

93

EVENTS 

Flags from scores of countries adorned the entrance of the 34th Havana International Fair. 

theFair 

A day 

at 


countries converged in Cuba for the 34th 

Havana International Fair, one of the 

largest general-interest trade fairs in Latin 

America, in early November. The fair is an 

annual event designed to attract foreign 

companies interested in trading and 

investing in Cuba, and as well as sourcing 

from the island. Cuba had the most exhibitors, 

followed by Spain, Italy and Germany. 

Although more American companies 

have shown interest in trading with Cuba 

in the last two years, only about two dozen 

U.S. exhibitors attended the fair. The U.S. 

delegation shared a pavilion with mostly 

Caribbean countries in the furthest corner 

of the fairgrounds. 

Fair attendees check 

out smartphones made 

by Chinese telecom 

giant Huawei. The 

company is working 

with Cuba’s telecom 

monopoly ETECSA to 

install the country’s 

internet infrastructure. 

After Cuba, Spain sent 

the most exhibitors to 

the fair. The country was 

given four pavilions. 

Mexico was given its own pavilion, where companies promoted 

the country’s food, energy and consumer products. 

Caterpillar’s Puerto 

Rico dealer Rimco 

promoted its 

construction vehicles 

at the fair. Rimco is 

looking to enter the 

Cuban market. 

Attendees check out 

the Havana Club booth 

in the Cuba pavilion. 

Recent changes to U.S. 

regulations now allow 

Americans to bring 

rum into the country. 

Myron Brilliant, executive vice president and head of international 

affairs for the U.S. Chamber of Commerce, speaks to 

journalists at the Chamber’s U.S.-Cuba Business Council booth. 

American exhibitors shared a pavilion with Caribbean countries. 


in closing 

A New 

Generation 

for U.S.- Cuba 

Relations 

By Jodi Hanson Bond 

Vice President, Americas, U.S. Chamber of Commerce 

President, U.S.-Cuba Business Council 

U.S. Chamber President and CEO, Tom 

Donohue, first visited Havana in the late 

1990s. At the time he was highlighting 

the Chamber’s opposition to unilateral 

U.S. trade sanctions. As Donohue said 

then, and as we’ve reiterated ever since, 

U.S. isolationist policy toward Cuba has 

failed. Cuba hasn’t been isolated from the 

world—just from America and its business 

community. 

The U.S. private sector has long 

sought a commercial relationship with 

Cuba that offers opportunities for Americans 

and Cubans alike, a commercial 

relationship with the power to bridge differences 

and put both countries on a path 

toward productive and friendly relations 

befitting such close neighbors. 

Twenty months ago, Presidents 

Obama and Castro began a process of 

rapprochement between our two countries, 

and it’s already spurred historic 

reforms. Embassies in both countries have 

re-opened, regulations governing U.S. 

sanctions have been adjusted, and Cuba’s 

growing private sector—now viewed as 

a strategic necessity and not a necessary 

evil—accounts for 40 percent of its labor 


force. The travel and tourism sector has 

emerged as a vibrant frontier, U.S. cruise 

ships are again making landfall at Cuban 

ports, and for the first time in over 50 

years, cities like Havana and Santa Clara 

appear as destinations on departures 

boards at U.S. airports. 

In spite of these constructive changes, 

there is much work left to do. It will 

take sustained effort from all stakeholders 

to make sure this historic opportunity is 

seized and not squandered. In this spirit 

the U.S. Chamber launched the U.S.-Cuba 

Business Council in 2015. Over the 

course of the last year, we’ve convened 

leading private-sector voices for in-depth 

discussions about opportunities in both 

markets, and we’ve committed ourselves 

to ambitious goals: Building a strategic 

commercial partnership; encouraging 

greater reform in Cuba; and creating a 

more robust bilateral trade and investment 

relationship. 

The Council has already led several 

business delegations to Cuba, hosted 

dozens of roundtable conversations about 

U.S.-Cuba policy with U.S. government 

officials, welcomed two Cuban ministers 

to the nation’s capital for the first time in 

over 50 years, and led dozens of educational 

meetings on Capitol Hill to explain 

the importance of removing U.S. sanctions 

on Cuba. 

It is now up to the U.S. Congress 

to lift the generations-old sanctions 

against Cuba. While we understand the 

challenges associated with advancing 

meaningful reform in the current political 

environment, it won’t dampen efforts by 

the U.S. Chamber and the Council to 

build a pragmatic conversation on the 

changing U.S.-Cuba landscape and the 

opportunities it presents for our businesses 

and entrepreneurs. At the same time, we 

continue to urge the Cuban government 

to build on the advancements of the 

past 20 months with a more ambitious 

economic reform agenda at home. 

Before us––just 90 miles off our 

coast––lies an extraordinary opportunity 

to bolster our American business 

community, grow our economy, and share 

with Cuba the principles of free enterprise 

that have made our nation, and our people, 

so strong. We invite you to join us in these 

historic efforts. H

EXPLORE CUBA. 

ALL OF IT. 

Now flying to six cities from Miami 

Whether you choose Havana, Cienfuegos, Holguin, Santa Clara, 

Varadero or Camaguey, now you can fly nonstop from Miami. 

With frequent daily flights, low fares and easy booking, 

American makes it easy to get there. 

Book today at aa.com or call your local travel agent. 

American Airlines and the Flight Symbol logo are marks of American Airlines, Inc. 

oneworld is a mark of the oneworld Alliance, LLC. © 2016 American Airlines, Inc. All rights reserved.

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