U.S. business faces game of catch-up if Cuba sanctions are cut

Mon Dec 22, 2014 7:38pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Marc Frank and David Adams

HAVANA/MIAMI Dec 22 (Reuters) - International rivals have a clear head start in Cuba but U.S. companies could catch up quickly if the economic embargo that has kept them away is dismantled in a new era of cooperation between Washington and Havana.

Cuba's inhospitable regulatory environment under communist rule has made doing business difficult and costly for foreign businesses, limiting investment.

The domestic economy is also small with low salaries severely limiting retail businesses and inefficient state-run companies a drag on productivity and growth.

Nevertheless, hotel companies such as Spain's Melia Hotels International and France's Accor, Canadian miner Sherritt International Corp, Britain's Imperial Tobacco and French beverage giant Pernod Ricard have survived and profited.

"We've found it to be quite a stable and good place to do business and have had a lot of success there," said David Pathe, the chief executive at Sherritt, which has been in Cuba for 20 years and has joint ventures with the government in nickel, oil, gas production and electricity generation.

He, like others, declined to comment on the problems facing investors, saying only that "there's always been some noise around Cuba because of the U.S.-Cuban relationship."

Experts say the restoration of diplomatic relations with the United States and a gradual dismantling of the U.S. economic embargo could open opportunities in areas from financial services and telecommunications to agriculture and oil.

"The interest is pretty widespread, pretty much every multinational," said Jodi Bond, vice-president for the Americas at the U.S. Chamber of Commerce, whose top executives made an exploratory trip to Cuba in May, their first in 15 years.   Continued...