Hola, Cuba! Have We Got Some Goods For You

It will be a while before the Pepsi starts flowing freely in Havana or your Uncle Willy will be able to get legal Cohiba cigars at the local luncheonette, but the administration’s moves to open political relations with Cuba has everyone from fast-food purveyors to hoteliers to farm supply manufacturers smacking their lips at the prospects of reopening trade with a market just 90 miles from the coast. 

“Within hours of President Obama’s historic move to restore full diplomatic relations with Cuba, companies in the United States were already developing strategies to introduce their products and services to a market they have not been in for the better part of 50 years — if ever,” Julie Creswell points out in the New York Times.



Cuba was, after all, “one of the most advanced and successful countries in Latin America” prior to the revolution of 1959, as a PBS “American Experience” segment reminds us.

But first, Congress will need to lift a trade embargo first enacted by the Kennedy administration and later written into federal law, along with a ban in travel, by Congress. “Winning over members of Congress is key,” writes Bloomberg’s Carter Dougherty in a story about a forthcoming trade mission to Cuba by Commerce Secretary Penny Pritzker.

“I believe greater engagement will help more and more Americans understand the economic potential of Cuba and the incredible entrepreneurial capacity of their people,” Pritzker tells Dougherty by e-mail. 

“We are going to engage in areas like telecommunications,” Pritzker said on CNBC’s “Squawk Box” yesterday. She “[added] that only 5% of the Cuban population currently has access to the Internet and only 2 million of the 11.4 million people in Cuba have a cellphone,” writes CNBC’s Matthew J. Belvedere.

“In terms of travel, we've got 12 groups that will be able to have greater access,’ Pritzker said, including families, religious groups, researchers, academics, journalists and government.”

Choice Hotels, which franchises more than 500,000 rooms in 6,300 facilities under brands such as Comfort Inn, Quality and Clarion in more than 35 countries and territories, welcomed the warming relationship between the two countries. 

“We have no trepidation by entering the Cuban market,” Choice Hotels CEO Steve Joyce told Fox Business Network. “We think it’s going to be a huge opportunity. We have been locked out unlike the other European hotel companies … but the opportunity is significant.”

“But the first companies that are likely to actually generate some real increased revenue from tapping Cuba are the cruise operators, says UBS analyst Robin Farley,” writes Matt Krantz in USA Today. “Farley points out it could be several years before a U.S.-branded hotel operator could have a moderate or upscale property in Cuba.”

Meanwhile, both farmers and tractor makers see opportunity in a country that is famous for rum, sugar and cigars but imports “80% of the food it rations to the public,” according to a 2008 CNN story cited by Wikipedia.

“The reopening of diplomatic relations between the U.S. and Cuba is a welcome development, a move of which Caterpillar has been a long-standing proponent,” Bill Lane, global government affairs director for the heavy equipment manufacturer, said in a statement reported by the Washington Post’s Michael A. Fletcher.

The Lincoln (Neb.) Journal Star editorial board applauded the move, pointing out that “Nebraskans have first-hand experience with the benefits of expanded trade with Cuba” as the result of a 2001 act of Congress that exempted agricultural and medical products from the embargo on trade with Cuba.

“Since then, Gov. Dave Heineman has led three trade missions,” the editorial reports. “A tally of goods exported to Cuba several years ago put the value at more than $70 million worth of products such as dry beans, corn, wheat, pork and beef.”

Yet, not everyone will be greeted with open arms, apparently.

“For a company like McDonald’s, the Cuban government is going to ask, ‘How does McDonald’s coming in and selling hamburgers help the economy of Cuba?’ Alamar Associates founder Kirby Jones tells the NYT’s Creswell. “It’s just not going to be like other regions where you see a McDonald’s on every corner.”

There have already been significant economic changes in Cuba since Cuban President Raúl Castro took control of the country from his ailing brother Fidel in 2008, Alan Gomez reports in USA Today. For example, he “shifted more than 500,000 workers from the state-run economy to private enterprises. For the first time, Cubans can buy and sell their homes and their cars.”

There’s no telling what will happen to the roadscape should Detroit regain its tirehold in the country, but Business Insideris running a 22-slide look at some of the “rolling relics” from the ’40s and ’50s that make a strong case for fins on back ends, port holes on front fenders and two-tone paint jobs such as lilac and white.

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