President Barack Obama has opened the window for improved relations with Cuba, the subject of a long-held American embargo, but local business owner Jack Maybank Jr. says at least 150 companies in 35 states are already doing business with Cuba. Due in large part to President Bill Clinton’s loosening of the embargo for agricultural products in 2000, the opportunity is already there for the right products.
From 2002 until 2007, when Maybank Industries sold off its shipping interests, the company effectively cornered the Cuban market with monthly shipments (mainly lumber and newsprint).
“Given the location of our operations, Cuba was a natural place for us to grow,” Maybank says.
The day Maybank’s first vessel arrived at the Port of Havana on July 11, 2002, an American flag flew over El Morro Castle, adjacent to the harbor — the first time the Stars and Stripes had flown there since 1961.
Maybank spoke recently of his company’s Cuban experience at a forum hosted by the business school at the College of Charleston and the South Carolina World Trade Center. The audience included more than three dozen entrepreneurs ranging from property developers to entertainment industry consultants.
Southeastern ports have the infrastructure in place to take advantage of the Cuban market if the embargo is loosened, says Maria Conchita Mendez, director of Latin American trade and development for the Alabama State Ports Authority, which considers Cuba one of its top customers for Alabama’s poultry products.
President Obama has lifted longstanding restrictions on family travel and remittances to Cuba — a significant shift in U.S. policy — but he’s waiting to see how Cuba responds to human rights and other issues before making further changes to the embargo.
“That saddens me, and it’s not just because I am a Cuban-American,” Mendez says. “I honestly believe that we are sacrificing our economies, jobs, and economic development to a policy that has not worked.
“Once the embargo is lifted there are going to be tremendous opportunities in textiles, construction materials, electronics, communications, and appliances,” she adds. “You’re going to see a country go through a massive reconstruction process, and one for which they’ll need many goods and many products.”
It doesn’t come easy
But that’s not to suggest that getting involved in trade with Cuba — even under the auspices of selling or moving agricultural humanitarian aid — is easy now or will be later.
Maybank says despite President Clinton’s loosening of trade policy with Cuba, it was still enormously difficult to actually carry out a trade transaction.
U.S. rules forbid companies doing business with Cuba to extend credit to trading partners. The U.S. government does not want American companies in a credit arrangement with Cuba because if there’s a dispute or disagreement over payment, there’s no way to enforce it through American courts.
So, everything must be handled on a cash-on-delivery basis, and unlike traditional trade shipping, where ships ideally discharge cargo and pick up some more at each port of call, nothing can be moved from Cuba — even if it is destined for someplace other than the United States.
“There’s no question, you have to be committed,” Maybank says.
Some challenges could be resolved and consigned to experience, but others recurred. One of those was the matter of documentation. The United States has strict rules when it comes to documenting a shipment to Cuba, and requires that reams of papers be filed with multiple federal agencies.
Before sailing to Cuban, Maybank Shipping had to secure a temporary export license. Then the shipping line had to secure a State Department license to cover the ship’s crew, and only then could it begin filing documentation for the voyage with the U.S. Department of Commerce and Coast Guard.
“And you absolutely have to have all of your documentation in order at all times,” Maybank says.
Jake Colvin, vice president for Global Trade issues at the National Foreign Trade Council, a national think tank and trade advocacy organization, says these requirements are part and parcel of “the most comprehensive group of sanctions the U.S. places on trade with any country in the world.”
Know the culture
The complicated logistics and the embargo’s sharp teeth are daunting enough, but Douglas Friedman, director of the College of Charleston’s Latin American and Caribbean Studies, says those still wanting to do business with Cuba need to overcome another hurdle as well: understanding Cuba’s complicated and delicate history and culture.
Jack Maybank Sr. first learned of the slight loosening of the longstanding embargo over Easter weekend in 2000. Within days, and not knowing a soul in the Communist country, Maybank set out for Cuba, connecting with Pedro Alvarez, chairman of the Cuban food import company Alimport and the government official in charge of trade.
Maybank’s decision to jump on the opportunity was a master stroke. Cubans generally place a tremendous amount of weight on doing business face to face.
“When it comes to doing business in Cuba, everything revolves around friendship,” the younger Maybank says. “The folks at Alimport know their clients, know their clients’ wives, remember birthdays.
“The other thing is that you can’t do anything over the phone or through e-mail, in large part because the communications network is not the best there. They like to see you, and they love to negotiate,” he continued.
Colvin also says an immediate and full lifting of the embargo is too much to expect in any event. For the moment, it would be enough for President Obama to send a message to Congress that he wants to lift the travel ban.
“Cuba is an easy opportunity to show that there has been a change in U.S. policy, and the prospects for change have never been better,” Colvin says.
“Right now we have people like Republican Congressman Henry Brown (R-Hanahan) co-sponsoring a freedom-to-travel bill, and he’s not the usual suspect. The fact he’s more receptive to a thawing is a signal of the direction we’re moving in.”
Business owners looking to offer something to the Cuban market need to visit the country first, Maybank says.
“It’s easy to romanticize a market that most U.S. companies have been shut out of, but the reality is, while the United States doesn’t have an open trade relationship with Cuba, many other countries do.
“Our niche, if you will, is our proximity,” Maybank says.