What are Alabama’s chances to boost business activity, trade with Cuba?

Everybody’s paying close attention to Cuba. A relatively untapped market, the largest country in the Caribbean stands to be significant trade partner with the US if relations are normalized.

The process will be slow-moving and in some cases met with opposition. But many in Alabama remain optimistic about the opportunity.

The country is “on the radar screen” said Hilda Lockhart, who leads trade initiatives with the Alabama Department of Commerce. “We’re getting a lot of calls from a lot of our companies wanting to sell there,” Lockhart said.

“We’re trying to monitor it, but right now we don’t see a lot that can happen in the short term.”

Wood and agricultural products

Alabama shipped about $32.8 million worth of goods to the island nation last year, all of which was categorized as a food product, according to the Foreign Trade Division of the U.S. Census Bureau. It’s likely poultry.

Forestry and wood products were once an export worth about $1 million until 2012 when they stopped. The commerce department’s Lockhart said the fall of could be due to the stringent demand for the country to pay cash up front when buying from the US companies.

“My understanding is that Cuba doesn’t really have much money so they don’t have the capability to buy,” she said.

Lockhart may be right. But wood and forestry product manufacturers are still among those highly interested, she said.

Brian Davis, director of the International Trade Center in Tuscaloosa has one other theory. The wood products they needed tended to be things that they needed after hurricanes,” Davis said. Things like poles, pilings and structural lumber would be essential in those moments. That’s why exports, he said, “would spike and then things would drop off.”

There’s also the country’s scarce money supply, he said, as Lockhart mentioned.

Meanwhile Congress continues to weigh-in on the issue, holding hearings to hash out the details. Small packs of congressional leaders have also visited Cuba recently. What’s more, the issue created a rift between Republican lawmakers, split between agricultural product-producing states and other members of the party.

U.S. Rep. Bradley Byrne has been one voice of opposition. During a speech on the house floor, the Fairhope congressman called for significant reforms be made before economic benefits are extended to the country.

In his January remarks, Byrne said Cuban citizens must first “be treated with respect and dignity and be provided with the basic freedoms.” He added, “Under those conditions, and with a president willing to work with Congress, the embargo could be lifted and progress could truly begin.”

President Barack Obama’s plan outlined a number of key initiates, springing the negotiations to life. Establishing a permanent embassy is a major priority. He also relaxed some restrictions on financial transactions.

Telecom opportunities

A provision allowing American telecommunications firms to offer services to Cuba adds to the limited number of industries allowed to ship goods to the country. Cuba has a startling need for internet infrastructure, said Gary Bolton, vice president for global marketing for ADTRAN in Huntsville.

That issue came up again when online video streaming website Netflix announced that it would offer its service in Cuba.

Having the infrastructure for high-speed internet is also “critical to economic development,” Bolton said. ADTRAN, which offers a variety of communication equipment, hopes to grab a piece of the Cuban market, too — if and when the country is ready to do business.

“Obviously there is a significant gap between the current philosophy by Cuba’s leadership and what President Obama is looking to [do],” Bolton said. “The internet is one of the key enablers to help forge this relationship.”

Bolton said the Caribbean and Latin America have been “growing” areas for ADTRAN, which operates worldwide. They recently partnered with a firm to offer their services in Grenada. Working in Cuba wouldn’t be that much of a departure.

The country of 11 million people would be considered a “greenfield,” basically a fresh slate with no real internet infrastructure to upgrade, he said. Everything would be installed for the first time.

“It would be such a quantum leap [from] the infrastructures they have today.”

By Michael Finch II, AL.com

February 20, 2015

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