Monday, September 24, 2018
Business

Tampa company won’t give up on its dream to build a warehouse in Cuba

Florida Produce once symbolized the trade potential between the United States and Cuba.

In 2015, the Tampa-based company asked Cuban leaders for permission to erect or restore a 100,000-square-foot warehouse in Havana to house and sell American goods.

It was to be the first of its kind. Cuba seemed on board, the Obama administration wanted more U.S. commerce with Cuba, and exporters were interested.

But today, with the project in limbo, Florida Produce symbolizes something different: the failure of the United States and Cuba to capitalize on an opportunity to forge trade ties.

That’s according to John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council.

What was once a flurry of American companies excited to do business in Cuba is now a drizzle.

And with the current administration pushing against engagement with Cuba, some say it may remain that way for a while.

Still, said Manuel Fernandez, who is partners with Michael Mauricio in Florida Produce, "I am not giving up. I will continue to push my agenda."

He was in Cuba a few weeks ago for what he called "unofficial meetings" with his contacts in Cuba’s Ministry of Foreign Trade. He hopes those lead to another round of official talks. Overall, he said, he’s had six official and six unofficial meetings.

Still, when asked where the warehouse stands, Fernandez dejectedly replied, "I wish I could tell you. I just don’t know."

He used to be optimistic.

Agriculture and medical supplies were once the only American items the United States allowed to be sold to Cuba. Florida Produce traded the former to Cuba in the early-2000s. Later, they imported Cuban art.

Then, in 2015, President Barack Obama restored diplomatic relations with Cuba and expanded the list of exportable items to include telecommunications, restaurant equipment and construction supplies if those were sold to the Cuban private sector. He also permitted American companies to establish a brick-and-mortar presence on the island and hire Cubans.

In October of that year, Florida Produce pitched the distribution warehouse to officials at the Cuban Embassy in Washington D.C. Such a facility, they said, would entice Americans to import items.

"We concluded our presentation, and everyone said it is a great idea," Fernandez said.

He was told that an arm of the Cuban government would partner with them and that within 30 days they would learn details. It is a promise they’ve heard time and again since then.

Florida Produce’s attorney, Tim Hunt, said several clients were given that same assurance. Those included a grain producer that would have used the warehouse and a construction equipment manufacturer that wanted to build a plant. None heard back. All but Florida Produce gave up.

"There was a flurry of activities" from businessmen around the country who were excited to enter the Cuba market, Hunt said. "It all went nowhere and most lost interest.

"The Cuban government is interested in airlines and cruise ships bringing tourists," he said. "When it comes to normal trade, Cuba doesn’t seem to have interest."

According to John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, only John Deere and Caterpillar have distribution centers on the island. And he believes Cuba uses those more as bargaining chips.

"It enables the Cuban government to say to China, Japan and Russia among others that Caterpillar and John Deere are in Havana, so those countries better hurry and provide longer-term financing and government guarantees to maintain their position in the marketplace," he said.

Neither Caterpillar nor John Deere have confirmed that any of their equipment has been sold in Cuba, Kavulich said. And while Cuba continues to buy American agriculture, no U.S. company reported the paid sale of products from Obama’s expanded list.

Blame does not fall solely on Cuba, Kavulich said. "The Obama administration could have and should have done more to promote a bilateral commercial relationship with Cuba."

For instance, "President Obama should have permitted direct correspondent banking, should have lessened restrictions upon the use of the U.S. dollar for international transactions, and should have permitted more products to be imported to the United States from Cuba rather than two: coffee and charcoal."

President Donald Trump has made doing business with Cuba more difficult by banning Americans from partnering with dozens of entities that have links to Cuba’s military. Still, he has yet to roll back the Obama era policies that made Florida Produce’s distribution warehouse possible.

"I don’t think I’ll ever give up," Fernandez said. "I will keep negotiating. I tell Cuba to just give us a chance. If it works, they’re a hero. If it doesn’t, it’s our fault. They have nothing to lose."

Contact Paul Guzzo at [email protected] Follow @PGuzzoTimes.

 
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