Developments in U.S.-Cuba Normalization

As noted in a prior post, on September 12, 2015, the U.S. and Cuba established an agenda for their bilateral commission to address various issues relating to normalization of relations. Since then there has been limited progress on that agenda.

On September 18, the U.S. Departments of Treasury and Commerce issued new regulations to ease sanctions related to travel, telecommunications and internet-based services, business operations in Cuba, and remittances. The new rules will allow U.S. companies to establish offices and subsidiaries in Cuba, permit joint ventures between U.S. and Cuban firms and make it easier for airlines and cruise ships to import parts and technology to Cuba to improve the safety of their operations.[1]

Secretary Penny Pritzker in Cuba
Secretary Penny Pritzker in Cuba
Secretary Pritzker with Cuban children
Secretary Pritzker with Cuban children

 

 

 

 

 

On October 6 and 7, U.S. Commerce Secretary Penny Pritzker was in Cuba to launch a new Regulatory Dialogue between the U.S. and Cuba focused on the impact of new U.S. regulations by her Department and by the Department of Treasury’s Office of Foreign Assets Controls (OFAC). The Dialogue also gave Secretary Pritzker and additional U.S. officials from the Departments of Commerce, State, and Treasury the opportunity to hear from their Cuban counterparts on the structure and status of the Cuban economy. Secretary Pritzker also visited the Mariel Special Development Zone with U.S. charge d’affaires Jeffrey DeLaurentis.[2]

On October 27-30, high-ranking officials of the U.S. Department of Homeland Security visited Cuba to meet with leaders in the Cuban Ministries of Interior, Transportation and Foreign Relations. Issues discussed included aviation security, combating drug trafficking, cybersecurity and resumption of passenger ferry services between Havana and Florida.[3]

Secretary Mayorkas in Havana
Secretary Mayorkas in Havana

The DHS delegation was led by the Department’s Deputy Secretary, Alejandro Mayorkas, who as an infant left Cuba with his family in 1960. On the last afternoon of his DHS trip, he visited a family cemetery, where his grandmother, great aunt and great uncle are buried as well as his father’s elementary school and steel-wool factory. His Cuban hosts, Mayorkas said, were aware of his personal history and “could not have been more gracious and kind” in presenting him with a gift: his family’s original Cuban government immigration file.[4]

The last week of October also was the occasion for the annual Havana International Fair. Attending was an U.S. Chamber of Commerce delegation of 40 U.S. companies including Caterpillar, Amway, Sprint and Cargill for meetings with Cuban officials and the first board meeting of the U.S.-Cuba Business Council, a group dedicated to trade between the two countries. Jodi Bond, the Chamber’s vice president of the Americas, said the council was optimistic that trade will begin to flow between the U.S. and Cuba as each country figures out how to harmonize clashing sets of byzantine regulations. “We want to see U.S. products as part of that beautiful build-out of Cuba,” Bond said. “We’ve done this in so many markets around the world we know that it just takes time.” One of the U.S. companies in the delegation, Sprint, signed an agreement with Cuba to broaden its service to the island[5]

The U.S. and Cuba also are discussing cooperation on baseball, including making it easier for Cuban players to join U.S. professional baseball organizations and for U.S. major league teams to play spring games in Cuba.[6]

Despite these developments, there are voices of disappointment that the process of normalization is not leading to more business transactions. Another post will explore possible reasons for the slow pace of such transactions.

==================================================

[1] U.S. Announces Concrete Improvements in Relations with Cuba (Sept. 18, 2015).

[2] Dep’t of Commerce, Secretary Penny Pritzker’s Trip to Cuba (Oct. 15, 2015)  Davis, U.S. Commerce Chief Makes a Pitch in Cuba, N.Y. Times (Oct. 6, 2015).

[3] Dep’t of Homeland Security, Readout of Deputy Secretary Mayorkas’ Trip to Cuba (Oct. 30, 2015).

[4] Markon, ‘I went with a nervous heart’: Top Cuban American DHS official makes emotional return to Cuba, Wash. Post (Nov. 4, 2015).

[5] Assoc. Press, US Companies in Cuba for Week-Long Celebration of Commerce, N.Y. Times (Nov. 3, 2015); Reuters, Cuba Signs Deal with Sprint, Says It Is Open for More Business, N.Y. Times (Nov. 2, 2015).

[6] Schmidt & Davis, U.S. and Cuba in Trade Talks, for Ballplayers to Be Named Later, N.Y. Times (Oct. 31, 2015).