By the end of 2016, I traveled to
Cuba three times to learn about,
experience and observe the politi-
cal, economic and business reforms
implemented by the United States
and Cuba. My experiences in 2016
differed slightly from that of 2012,
when I first visited Cuba, due to
changes in U.S. and Cuban policies,
the increased growth of the Cuban
private sector, and expanded oppor-
tunities for U.S. businesses. Cuba is
a small market with a population of
11.4 million and a GNI per capita
of about US$6,000. Then, why
should U.S. companies consider
exporting to Cuba?
One reason is that Cuba is a rela-
tively untapped market that is not
oversaturated with U.S. competitors
or foreign companies, for that matter.
However, Cuba’s trading activities
have increased in recent years. Cuba
has already prepared for a jump in
cargo shipments with the develop-
ment of the US$957 million Mariel
port, which is located 28 miles west
of Havana on the northern coast and
designed to attract larger container
ships moving through the Panama
Canal. The port is a part of a longer
plan to develop a free trade zone.
Shortly after the re-opening of the
U.S. embassy in Havana, Cuba in
2015, discussions among economists
and investors, among others, focused
on the increase in economic activity
with the lifting of the U.S. embargo
against Cuba. Now is the time to
at least begin developing a well-
researched and thought-out strategy
to enter the Cuban market.
Another point to consider is that
Cuban citizens have limited access
to products and services that we take
for granted, which is the result of a
tightly controlled economy for over
50 years. In other words, there is
a need and demand for numerous
products and services. As one person
showed me in her home, some of the
clothes and electronic items, which in-
cluded U.S. brands, were purchased
in the United States and brought back
to her family in Cuba. Imagine being
able to expand sales to consumers in
this market.
While U.S.-Cuban economic rela-
tions have progressed in a positive
manner, it is still worth noting the chal-
lenges that companies will encounter
in the Cuban market. Some of those
challenges pertain to continued
restrictions on what the United States
can export to Cuba, increased com-
petition from exporters and investors
from other countries, and the pace of
change in Cuba. For this reason, it is
imperative that companies, regardless
of size, develop a realistic short, me-
dium, and long-term export strategy
to Cuba. The list below includes three
key points to get companies, particu-
larly in the state of California, started.
Policy Matters
Policy is an important part of the day-
to-day operations of a business, be-
cause policy either creates or hinders
the ability for companies to engage
and compete in the global economy.
The U.S. embargo against Cuba
remains in place. However, several
policies going as far back as 2000
have eased restrictions on U.S.
trade with Cuba. Thus, Californian
exporters have been able to tap into
this market, as evident by the trade
figures collected from the International
Trade Administration.
The Trade Sanctions Reform and
Export Enhancement Act, signed by
former President Bill Clinton in 2000,
permits the export of certain agri-
cultural commodities, medicine and
medical devices. Since this legislation
took effect, Californian agricultural
product exports increased from US$0
in 2000 to US$228,000 in 2015.
California’s agricultural exports
reached its peak of $1.2 million in
2011. In 2015, agricultural products
accounted for 75.6 percent of Cali-
fornia’s total exports to Cuba.
In 2014, President Barack Obama
expanded U.S. exports to Cuba to
include other products and services
such as agricultural equipment and
travel services. California’s export
Three Factors to Turn Interest in the Cuban
Market into a Viable Plan of Action
Scenes from today’s Cuba...
