Trade with Cuba remains a distant goal

Leading trade analysts say that re-establishing top level diplomatic representation with Cuba is a solid step signalling that negotiations based on engagement rather than isolation have been so far productive.

But before shippers get too excited they should realize that key sanctions are unlikely to be fully removed until Congress lifts the U.S. embargo on Cuba – something unlikely to take place before 2018 when incumbent president Raúl Castro is expected to step down.
 
“Trade and investment will, therefore, increase but it will be specifically framed as aid, educational or humanitarian assistance,” notes Diego Moya-Ocampos, a senior country risk analyst with IHS Global Insight.

He observes that the U.S. change in policy towards Cuba will give more room to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce to grant more licences to conduct aid, educational, or humanitarian activities in Cuba.

These could include the sale, export, or re-export of medicines and medical supplies, food, and agricultural commodities to the island, financial services, aerial and marine transport – and other economic activities favoring, among other sectors, the tourist, food, and financial services industries.

“The current Cuban leadership will make sure that any changes in the political system do not threaten the status quo and that the new emerging national leadership is aligned with the Communist Party leadership,” says Diego Moya-Ocampos.

Economic and potential political change in Cuba, therefore, will continue to be gradual and at a pace at which the Cuban ruling establishment feels comfortable.

Logistics managers may rely, however, on the fact that strong trade and investment incentives will be a driver to enable reform.