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Brazil's plans to tap Cuban trade potential leave U.S. in dust

Luiz In?io Lula da Silva, left, Brazil’s president, and Cuba’s Raul Castro attend an agreement signing in Havana on Feb. 24.

Associated Press

Luiz In?io Lula da Silva, left, Brazil’s president, and Cuba’s Raul Castro attend an agreement signing in Havana on Feb. 24.

The contrast looks particularly stark these days between Washington's same-old, same-old foreign policies and the agility and imagination displayed by Brazilian politicians and diplomats.

The fourth, and probably last, visit to Cuba of Brazilian President Luiz Inácio Lula da Silva on Feb. 24 — with loans worth nearly $1 billion for the cash-strapped island in his baggage — was a strong message to his successor. Here's what it said: Your foreign policy should not be guided by your left- or right-wing leanings; Brazil's economic interests should be on top of your agenda.

Just look at Odebrecht S.A., one of Brazil's largest private companies. The conglomerate's construction business is executing contracts worth billions of dollars — dams, cable cars, subway lines — in Venezuela.

A few weeks back, Odebrecht bulldozers began moving earth for construction of a 1-million-containers-a-year terminal at the Port of Mariel in Cuba. Lula made it clear before his trip to Cuba that Brazilian companies — in other words, Odebrecht — were eager to get into hotel and road construction on the island, and that his government is more than willing to help them get there.

"We work with the perspective that the (U.S.) blockade against Cuba has no more meaning at all, and that it could fall at any moment," Lula said in Havana. "Cuba has tremendous potential to participate in international trade, particularly in containers. That's why Brazil is enthusiastic about providing financing, so Brazilian companies can work here and help in the development of this country."

The new president of Brazil as of Jan. 1, 2011, could well be José Serra. Some U.S. players probably hope that Serra, who is on the more conservative side of Brazil's political spectrum, will somehow align again with Washington's interests and take his country back to the 1990s.

Get real.

Brazil's new manifest economic interests abroad are the factors that will determine Serra's policies. Moreover, Serra is known for his independence and stubborn streak. When he was health minister, he battled multinational pharmaceutical companies to cut their prices on AIDS medicine and then led a lobbying effort at the World Trade Organization to push the United States to drop a case against Brazil for patent infringement.

While Brazil is soaring to new heights, the Obama administration's plane continues to fly on autopilot, programmed sometime in the 1990s. In fact, Washington is even fighting the battles of the 1980s.

The same day Lula announced Brazil's billion-dollar package to Cuba, a U.S. delegation was in Havana to hold semiannual talks about migration issues, which date back to the Clinton years. But on the evening after the talks, the State Department official heading the delegation apparently took a cue from the Reagan years, by shuttling several dozen dissidents to the Havana residence of the chief of the U.S. Interests Section to brief them about the talks. The Cuban government's harsh response came within a matter of hours.

For Hillary Clinton, Cuba apparently still is all about dissidents, all the time. And after the tragic death of Orlando Zapata, a hunger-striking political prisoner in Havana, on Feb. 23, you can expect more of the same from Washington.

• • •

When it comes to realizing new opportunities south of the border, there's more imagination at work in the U.S. private sector.

Take InnoVida, a North Miami-based startup, and its Haiti plans. Last year, InnoVida co-founder Claudio Osorio teamed up with New Urbanism pioneer Andrés Duany to produce easy-to-assemble, prefabricated homes made of fiberglass composites for low-income people. The company planned to build an assembly plant near Port-au-Prince with a capacity for 10,000 homes a year, and lined up $15 million in financing, including some from the U.S. government.

Then the earthquake struck.

Making marketing lemonade from the lemons it was served, InnoVida offered to donate 1,000 homes to earthquake victims. That's worth at least $3 million. Haiti's tourism minister, who is also in charge of reconstruction, was present at InnoVida's press conference in Miami on Feb. 24.

InnoVida "can do more for housing in Haiti better and faster than any other technology out there," touted retired Gen. Wesley Clark — who is on the company's board of directors — at the news conference, according to the Miami Herald.

Clark apparently didn't do his homework. Maybe the InnoVida makers are a sure vendor to U.S. aid programs in Haiti, but they will face stiff competition during the U.N.-hosted Haiti donor conference in New York on March 31, where billions of dollars of donations from all over the world will be sorted out.

A Venezuelan competitor has a four-year head start on InnoVida. In 2006, the government ordered the petrochemical subsidiary of the Venezuelan state oil company to create a division called Petrocasa. In the four years since, Petrocasa has cranked out tens of thousands of its PVC-based prefab homes. Hugo Chávez has made it a point to offer this technology at low cost to other developing nations such as Haiti, Cuba, Ecuador, Bolivia and Nicaragua. One of the first takers has been Cuba, where a Petrocasa plant with a capacity of 14,000 homes a year is going up.

This is the new reality of doing business south of the border: If you don't find ways to cooperate, you must compete with the state. And that's a tough proposition.

Johannes Werner is editor of Cuba Trade & Investment News, a monthly newsletter, and Cuba Standard, a Web site featuring real-time news about the Cuban economy. He can be reached at jwerner@cubatradenews.com.

Brazil's plans to tap Cuban trade potential leave U.S. in dust 03/06/10 [Last modified: Friday, March 5, 2010 8:21pm]
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