The U.S. trade embargo against Cuba recently reached a milestone: it's 55th anniversary. With the decades-long trade restriction coming to an end, albeit slowly, companies are lining up to profit off of the trade and investment potential that will come with an open relationship between the two countries.
As the U.S. and Cuba march, with baby steps, toward the lifting of the embargo, companies are carving out footholds in areas such as a port at Mariel Bay, 28 miles west of Havanna, according to the Journal of Commerce (JOC). The new $957 million container port, designed as a stop for the large container ships expected to pass through the newly-expanded Panama Canal, is set to become a significant transfer point for cargo, and recently hosted the U.S. commerce secretary, Penny Pritzker, during a visit to the country.
Companies making their presence known at Mariel Bay
Pritzker isn't the only guest to have stopped at the planned free trade zone recently, though. Over the summer the Associated Press reported that numerous companies were working to get in on the action at Mariel Bay. At the time, five foreign and two domestic firms had been approved for operations at the in-progress port.
"We're in July and we have approved almost one company per month," Ana Teresa Igarza, director of the Special Development Zone at Mariel, told the AP. "The pace is what we expected from the beginning."
She added that initial approvals are the most difficult, and after that the process becomes easier for other firms hoping to establish a footprint at the port. She also told the news outlet that visiting businesspeople from the U.S. have expressed interest in setting up operations there.
The planned free trade zone should offer plenty of opportunity for businesses that are able to secure a place at Mariel Bay. The port at the bay sits in the middle of a 180-square mile free trade and development zone that will feature tax incentives and competitive customs, the JOC reported. With the purported advantages in place should the embargo be lifted as expected, numerous U.S.-based companies are keeping an eye on developments in Cuba.
Cuba's big plans for foreign investment
Havana has acknowledged how important foreign investments will be for the country when the trade embargo is removed. Cuba hopes to attract between $2 billion and $2.5 billion in foreign investments annually, after only hauling in around twice that throughout the entirety of the 1990s. Despite hopes for such large investments, the strategy regarding foreign activity in Cuba will likely be long-term.
"This is a long-haul, strategic, patient market that is evolving in front of our eyes – at a very Cuban pace," Mark Entwistle, a former ambassador from Canada to Cuba, told the JOC. "You need a longer-term vision. The companies that have been successful in Cuba have that long-term vision that allows them to ride the fluctuations of the daily ups and downs of doing the actual business. My advice: Do less pitching and more listening, and if your business is in areas where they are Cuba's priorities, then you have a real good chance."
Though the process to lift the U.S. trade embargo on Cuba is slow-moving, companies' efforts to prepare for the eventual reestablishment of a relationship between the two countries are humming along.