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    Businesses on both sides of the Florida Straits get to know each other

    Businesses on both sides of the Florida Straits get to know each other
    BY MIMI WHITEFIELD
    mwhitefield@MiamiHerald.com

    Early on a recent Friday morning, four entrepreneurs visited the Greater
    Miami Chamber of Commerce to give a briefing on their business journeys.
    But the chamber breakfast in Miami, capital of Cuban exiles, was a bit
    unusual: All four were from Cuba, members of the island’s growing
    private business class.

    One entrepreneur — Vanessa Pino, whose family business is selling
    brightly packaged sweets — even laid out a tray of her shortbread
    cookies among the breakfast offerings.

    The visit was a first for the Miami chamber, said Barry Johnson, chamber
    president and chief executive.

    Earlier that week, Guillermo Santa Cruz — a vice president with IMG, the
    global sports, management and media company — told an audience of tech
    entrepreneurs at the eMerge Americas conference in Miami Beach: “If
    you’re in business, you need a Cuba plan in the next six to 12 months.
    It will move that fast.”

    President Barack Obama announced a rapprochement with Cuba just five
    months ago, on Dec. 17. Diplomatic relations still haven’t been
    reestablished, and there are still no established rules on the Cuban
    side for many of Obama’s initiatives to increase trade with the island’s
    small private sector. But there’s jockeying and movement on both sides
    of the Florida Straits as everyone from Cuba’s entrepreneurs to large
    American corporations try to get to know each other and scope out
    business opportunities.

    Such activity would have been inconceivable a year ago when USAID
    subcontractor Alan Gross was still in a Cuban prison and U.S.-Cuba
    relations appeared solidly frozen. But “appeared” is the operative word:
    Since mid-2013, the United States and Cuba were involved in secret
    negotiations that led to the decision to renew diplomatic relations. Now
    even Gross, who came to Miami Beach on May 4 for a fundraiser for the
    New Cuba political action committee, has said he would like to return to
    Cuba and play a constructive role in building the relationship between
    the two countries.

    At the recent Chamber breakfast, one goal was to develop a conversation
    with the Cubans about future opportunities with Miami-based businesses.
    Their trip was part of an entrepreneurial exchange organized by the Cuba
    Study Group — an organization that favors increased engagement with Cuba
    — and financed by the Knight Foundation. The Cubans had come to learn,
    visiting local businesses that corresponded to their interests.

    For Pino, who runs Dulces Detalles (Sweet Details) in Havana, that meant
    visiting local bakeries. Victor Rodriguez, proprietor of Victor Bikinis,
    another Havana business, met with swimsuit designers. One gave him a big
    bag of materials, another coached him on how to get his suits into
    stores in the United States, and another helped him polish up his
    promotional materials with a photo shoot featuring professional models.
    Caridad Limonta, whose Guanabacoa-based company PROCLE makes women’s
    apparel and home goods such as bedspreads, and Rubén Valladares,
    proprietor of Adorgraf, a Havana firm that sells and prints promotional
    materials, also met with their local counterparts.

    Niuris Higueras, who joined the group for some of its activities, runs
    Atelier, a popular Cuban fusion restaurant in Havana’s Vedado section.
    She has already felt the impact of the new U.S. opening: About 85
    percent of her customers these days are Americans, she said. It just
    feels different, she said, than before Dec. 17.

    Meanwhile, post-Dec. 17 also feels different for Miami attorney Richard
    Montes de Oca. Before, “an island only 90 miles away from Florida seemed
    like it was a million miles away,” he said. “But it’s getting closer.”
    Montes de Oca, who chairs the chamber’s international relations
    committee, said a possible chamber trade mission to Cuba is under
    discussion.

    While many U.S. companies explore the niches they might occupy under the
    Obama’s administration limited opening toward Cuba, the big play for
    business won’t come for many others until the embargo is no longer in
    place. “The embargo has to be lifted and when it is, everyone will be
    there,” said Carnival Corp. Chief Executive Arnold Donald. “We can move
    pretty quickly.”

    Some Cuban ports will need work to accommodate cruise ships, and
    Havana’s port is shallow so only smaller vessels will be able to call,
    Donald said. But he added, “There’s a huge pent-up demand. The reality
    is Cuba is an interesting place.” Because Cuba will be considered a new
    destination, he said, “it will bring in guests that might not choose the
    Caribbean as their first destination.”

    Meanwhile, ferry companies champ at the bit to begin service between
    Florida and Cuba. Treasury’s Office of Foreign Assets Control recently
    gave out at least six licenses to companies that want to begin offering
    ferry service to Cuba. Now it’s up to the companies to negotiate port
    access with the Cubans. The U.S. Coast Guard also needs to inspect any
    port that will be used by ferries coming from the United States.

    José Ramón Cabañas, chief of the Cuban Interests Section in Washington,
    suggested earlier this month that cruise ships home-ported in the United
    States might come to Cuba sooner rather than later. He noted that the
    OFAC license received by the potential ferry operators contained wording
    that might be interpreted to include other types of vessels. The
    licenses give permission “to provide carrier services by vessel to,
    from, or within Cuba in connection with travel or transportation between
    the United States and Cuba of persons, baggage, or cargo authorized
    pursuant to the Cuban Assets Control Regulations.”

    To date, the opening is most evident in the hospitality industry as
    American visitors crowd the streets of Havana.

    A recent poll released by San Francisco-based Airbnb, which added Cuba
    to its destinations last month and is the most visible U.S. player in
    the market since the opening, and YouGov found that 30 percent of U.S.
    adults are planning or would consider a trip to Cuba in the next two
    years and the percentage was even higher among Hispanics (40 percent).

    When Airbnb launched in Cuba, it listed some 1,000 Cuban homes that
    would host travelers. Now that number has doubled, and Cuba has become
    Airbnb’s most searched site in Latin America: More travelers are
    searching for Cuba accommodations than for Airbnb lodging in Rio de
    Janeiro, Buenos Aires or Mexico City, said Kay Kühne, Airbnb’s regional
    director for Latin America.

    “They are creating value for Cubans and their company,” said Secretary
    of Commerce Penny Pritzker during a visit to Miami earlier this month.
    She also praised Airbnb President Brian Chesky for helping Cuba’s
    “entrepreneurial ecosystem.”

    Airbnb wasn’t even founded when Caterpillar, the Peoria-based
    manufacturer of mining, construction and other industrial equipment,
    first began calling for a new policy toward Cuba in 1998 after Pope John
    Paul II’s visit to the island seemed to indicate change might be afoot.
    “We were wrong,” said Bill Lane, Caterpillar’s director of global
    government affairs.

    But Caterpillar persevered, and it is now among the U.S. manufacturing
    companies testing the waters in Cuba. During a recent trip to the
    island, “we found there was a lot more demand for American products than
    we expected,” Lane said.

    New U.S. rules allow the export of U.S. telecom equipment, construction
    materials to build private structures and the export of products
    destined for private entrepreneurs as well as U.S. importation of a
    limited number of products produced by Cuba’s cuentapropista or
    self-employed sector. But it will be up to the Cuban government to
    decide how fast the opening will go and whether it wants to facilitate
    such commerce.

    Because the state controls the economy, Cuba’s commercial and financial
    system isn’t really set up for U.S. trade with private individuals or
    cooperatives. “Cuba will become a much more robust market if they make
    changes. Now that we’re trying engagement, let’s see what happens,” Lane
    said.

    “You actually need the Cubans to want you to come in and do business,”
    said Yosbel Ibarra, co-chairman of Greenberg Traurig’s Latin American
    and Iberian practice. He said it appears Cuba does want to engage with
    U.S. companies — even though it is moving at “an incredibly slow,
    measured pace.”

    Some Cuban watchers say part of the problem is that Cuba is overwhelmed
    by all the delegations that want to visit and lacks capacity to deal
    with all the changes necessary to mesh with the business opportunities
    opened up by a new relationship with the United States. “The physical
    and legal infrastructure doesn’t exist yet in Cuba,” said Peter Quinter,
    a lawyer with GrayRobinson.

    The embargo also puts a brake on U.S. investment and most major business
    opportunities. Companies in industries still blocked from entering Cuba
    might want to engage in philanthropic work in Cuba to build brand
    recognition for the future, Lane said.

    That seems to be the path taken by some business executives in Miami who
    support an 80-hour training program, called Cuba Emprende, that’s run by
    the Catholic Church in Cuba. The program teaches management skills, the
    entrepreneurial spirit and best business practices. Among its graduates
    are the Cubans who visited Greater Miami Chamber of Commerce as part of
    the entrepreneurial exchange.

    Limonta, for example, learned how to develop a business plan and has
    registered her PROCLE name and trademark. Now the women’s apparel, beach
    bags and household goods she makes are sold in state dollar stores,
    local markets and a few hotels.

    Source: Businesses on both sides of the Florida Straits get to know each
    other | Miami Herald Miami Herald –
    http://www.miamiherald.com/news/business/biz-monday/article21747486.html