Cuba already land of opportunity

Cuba already land of opportunity
Local business owner speaks of shipping success, regardless of embargo
by Dan McCue

President Barack Obama has opened the window for improved relations with
Cuba, the subject of a long-held American embargo, but local business
owner Jack Maybank Jr. says at least 150 companies in 35 states are
already doing business with Cuba. Due in large part to President Bill
Clinton's loosening of the embargo for agricultural products in 2000,
the opportunity is already there for the right products.

From 2002 until 2007, when Maybank Industries sold off its shipping
interests, the company effectively cornered the Cuban market with
monthly shipments (mainly lumber and newsprint).

"Given the location of our operations, Cuba was a natural place for us
to grow," Maybank says.

The day Maybank's first vessel arrived at the Port of Havana on July 11,
2002, an American flag flew over El Morro Castle, adjacent to the harbor
— the first time the Stars and Stripes had flown there since 1961.

Maybank spoke recently of his company's Cuban experience at a forum
hosted by the business school at the College of Charleston and the South
Carolina World Trade Center. The audience included more than three dozen
entrepreneurs ranging from property developers to entertainment industry
consultants.

Southeastern ports have the infrastructure in place to take advantage of
the Cuban market if the embargo is loosened, says Maria Conchita Mendez,
director of Latin American trade and development for the Alabama State
Ports Authority, which considers Cuba one of its top customers for
Alabama's poultry products.

President Obama has lifted longstanding restrictions on family travel
and remittances to Cuba — a significant shift in U.S. policy — but he's
waiting to see how Cuba responds to human rights and other issues before
making further changes to the embargo.

"That saddens me, and it's not just because I am a Cuban-American,"
Mendez says. "I honestly believe that we are sacrificing our economies,
jobs, and economic development to a policy that has not worked.

"Once the embargo is lifted there are going to be tremendous
opportunities in textiles, construction materials, electronics,
communications, and appliances," she adds. "You're going to see a
country go through a massive reconstruction process, and one for which
they'll need many goods and many products."

It doesn't come easy

But that's not to suggest that getting involved in trade with Cuba —
even under the auspices of selling or moving agricultural humanitarian
aid — is easy now or will be later.

Maybank says despite President Clinton's loosening of trade policy with
Cuba, it was still enormously difficult to actually carry out a trade
transaction.

U.S. rules forbid companies doing business with Cuba to extend credit to
trading partners. The U.S. government does not want American companies
in a credit arrangement with Cuba because if there's a dispute or
disagreement over payment, there's no way to enforce it through American
courts.

So, everything must be handled on a cash-on-delivery basis, and unlike
traditional trade shipping, where ships ideally discharge cargo and pick
up some more at each port of call, nothing can be moved from Cuba — even
if it is destined for someplace other than the United States.

"There's no question, you have to be committed," Maybank says.

Some challenges could be resolved and consigned to experience, but
others recurred. One of those was the matter of documentation. The
United States has strict rules when it comes to documenting a shipment
to Cuba, and requires that reams of papers be filed with multiple
federal agencies.

Before sailing to Cuban, Maybank Shipping had to secure a temporary
export license. Then the shipping line had to secure a State Department
license to cover the ship's crew, and only then could it begin filing
documentation for the voyage with the U.S. Department of Commerce and
Coast Guard.

"And you absolutely have to have all of your documentation in order at
all times," Maybank says.

Jake Colvin, vice president for Global Trade issues at the National
Foreign Trade Council, a national think tank and trade advocacy
organization, says these requirements are part and parcel of "the most
comprehensive group of sanctions the U.S. places on trade with any
country in the world."

Know the culture

The complicated logistics and the embargo's sharp teeth are daunting
enough, but Douglas Friedman, director of the College of Charleston's
Latin American and Caribbean Studies, says those still wanting to do
business with Cuba need to overcome another hurdle as well:
understanding Cuba's complicated and delicate history and culture.

Jack Maybank Sr. first learned of the slight loosening of the
longstanding embargo over Easter weekend in 2000. Within days, and not
knowing a soul in the Communist country, Maybank set out for Cuba,
connecting with Pedro Alvarez, chairman of the Cuban food import company
Alimport and the government official in charge of trade.

Maybank's decision to jump on the opportunity was a master stroke.
Cubans generally place a tremendous amount of weight on doing business
face to face.

"When it comes to doing business in Cuba, everything revolves around
friendship," the younger Maybank says. "The folks at Alimport know their
clients, know their clients' wives, remember birthdays.

"The other thing is that you can't do anything over the phone or through
e-mail, in large part because the communications network is not the best
there. They like to see you, and they love to negotiate," he continued.

Colvin also says an immediate and full lifting of the embargo is too
much to expect in any event. For the moment, it would be enough for
President Obama to send a message to Congress that he wants to lift the
travel ban.

"Cuba is an easy opportunity to show that there has been a change in
U.S. policy, and the prospects for change have never been better,"
Colvin says.

"Right now we have people like Republican Congressman Henry Brown
(R-Hanahan) co-sponsoring a freedom-to-travel bill, and he's not the
usual suspect. The fact he's more receptive to a thawing is a signal of
the direction we're moving in."

Business owners looking to offer something to the Cuban market need to
visit the country first, Maybank says.

"It's easy to romanticize a market that most U.S. companies have been
shut out of, but the reality is, while the United States doesn't have an
open trade relationship with Cuba, many other countries do.

"Our niche, if you will, is our proximity," Maybank says.

Cuba already land of opportunity | Features | Charleston City Paper (10
June 2009)

http://www.charlestoncitypaper.com/charleston/cuba-already-land-of-opportunity/Content?oid=1209507