Monday, May 4, 2015

Russia, Japan and others want to do business in Cuba

The US is interested in doing business with Cuba, but we are far from alone and we are late to the party. Cuba has a history of trade with Vietnam, China, Spain, France, etc. and visits from trade delegations have picked up.

The Cuban and Soviet economies were deeply intertwined before the Soviet breakup and on April 22 Russia and Cuba signed a five year deal for trade in the aeronautics, metallurgy, medicine, railway transportation and other sectors.

Russian and Cuban delegations met in Moscow.

The emphasis in US-Cuba trade discussions seems to be on the sale of US goods and services to Cuba rather than the other way around, but the Russian agreement includes the sale of Cuba-made pharmaceuticals to Russia, if they are found to be satisfactory in testing. Note that Russia is willing to purchase goods and services from Cuban-state enterprises while the US allows the purchase of goods and services from private Cuban enterprises, but not state firms.

Japan is also interested in doing business in Cuba. Japanese Foreign Minister Fumio Kishida and on May 2 some thirty business people met with representatives of a dozen Cuban state firms to discuss possible business deals at The Cuba-Japan Business Forum.

Cuban and Japanese foreign ministers and their delegations met in Havana. Foto: ain.cu

Cuban debt came up as a possible barrier to trade. Forum President Tomoyoshi Kondo said that "once the issue of the Cuban debt is solved, the two countries will be able to discuss and talk about the future.” The issue of Cuban debt also arose around the financing of the ALBA undersea cable. I don't know the current situation, but a Wikileaked memo from 2010 stated that:
Payment problems continue for all countries. Despite once again restructuring all of its official debt in 2009, Japan has yet to see any payments.
Many nations are looking for business and trade opportunities with Cuba now that detente with the US appears likely. In the short run, Cuban debt and poverty may limit that trade, but improved relations with the US and Cuban economic reform will surely improve the Cuban economy.
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