Want to do business in Cuba?
So you want to do business in Cuba with the Castro dictatorship? Well, Caveat Emptor...
Remarks at World Trade Center Orlando
Remarks today by Mauricio Claver-Carone at World Trade Center Orlando:
"Doing Business with Cuba, What's Next?"
Thank you so much for your kind invitation. I'm thrilled to be back in Orlando.
As some of you know, I'm a former resident of Orlando. I'm a proud graduate of Bishop Moore High School and Rollins College. So I share a great deal with all of you.
Obviously, Cuba and U.S. policy towards Cuba -- including the issue of trade -- are topics of great passion, and seemingly endless comment, reflection and debate -- or at least for those of us that deal with it on a daily basis.
Unfortunately, too many times at these events, speakers tend to hype and cherry-coat business opportunities in Cuba, disregarding some of the unpleasant economic and political realities involved.
For example, in September 2011, our neighbors here in Tampa announced the launch of charter flights to Cuba with great fanfare.
At the time, U.S. Rep. Kathy Castor (D-FL) and other Tampa officials heralded the charters as a huge business coup.
She'd even started a "Gateway to Cuba" initiative to market Tampa as the jump-off point for Cuba travel.
"And this is just the beginning," Castor said.
Well, just this week, it was announced that these charter flights would be significantly scaled back.
Similarly, Cuba charter service planned from Baltimore-Washington, Atlanta, New York and San Juan has also has been halted for financial reasons.
Others will point to European and Canadian investors, and argue that they are getting a "head-start" on business opportunities in Cuba.
How have these European and Canadian investors fared?
You tell me.
In the last few years, European investors have had over $1 billion arbitrarily frozen in Cuban banks by the government.
As Reuters reported, "the Communist-run nation failed to make some debt payments on schedule beginning in 2008, then froze up to $1 billion in the accounts of 600 foreign suppliers by the start of 2009."
In the last few months, the CEOs of three companies with extensive business dealings with the Cuban government were arrested and are now sitting in jail -- without charges.
They are Cy Tokmakjian of the Tokmakjian Group and Sarkis Yacoubian of Tri-Star Caribbean, both from Canada, and Britain's Amado Fahkre of Coral Capital.
Let me stress that these were not casual investors. They these were three of Cuba's biggest business partners, having invested hundreds of millions, with direct access to the highest officials.
And in the last few weeks, Iberia, the national airline of Spain, which accounts for over 10% of all foreign commerce with Cuba, announced the elimination of its Havana routes -- for they are no longer profitable.
While my presentation may sound somber for the short-term -- I promise it is optimistic in the long-term.
I note your logo here at the World Trade Center Orlando is "prosperity through trade."
I completely agree.
In full disclosure, I am a free-trader. I believe and advocate for the principles of free trade. However, I do so without the distortions that some would like for us to accept under the guise of trade.
I believe in the principles of free trade as were envisioned by its original thinkers.
In The Wealth of Nations, a book considered to be the foundation of free trade, Adam Smith held that trade, when freely initiated, benefits both parties.
Smith did so in criticism of the mercantilist policies of the 17th and 18th centuries, whereby commerce was simply a tool to benefit and strengthen the authoritarian nation-states of the time.
I believe -- as did Smith -- that free trade requires property rights and the rule of law as pre-conditions. If no such rights exist, then there is no real opportunity to trade, for the government could just take from you what they want, when they want, wherever they want -- for their sole benefit.
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