The Obama administration is working to finalize a change in U.S.-Cuba trade rules that experts called a major development that would significantly open the door to expanded business on the island.
Secretary of State John Kerry shakes hands with Cuban Foreign Minister Bruno Rodriguez prior to their meeting at the Foreign Ministry in Havana, Cuba, Friday,
Aug. 14, 2015. Kerry traveled to the Cuban capital to raise the U.S. flag and formally reopen the long-closed U.S. Embassy. Pablo Martinez Monsivais/AP
The regulation has not yet been released, although a 27-page document, dated Sept. 7 and marked to be reviewed by the White House’s Office of Management and Budget, was provided to McClatchy.
It couldn’t be determined if the version that is ultimately released will match the Sept. 7 version. The Department of Commerce didn’t respond to a request for comment about it.
As indicated in the document, the rules could amend existing ones to boost engagement between American and Cuban people, accelerate the free flow of information to and from Cubans, and ramp up independent economic activity generated by Cubans.
In many ways, the rule would merely be a continuation of the process begun Dec. 17, when President Barack Obama announced that the U.S. was seeking to thaw the five-decade freeze in its relations with the island nation 90 miles from Florida.
After that momentous December announcement, the Commerce and Treasury departments in January took steps to put in place parts of the president’s policy. The new rules, which could be announced as early as Friday, could amend the terms of existing license exceptions available for Cuba, create new licensing policies, and take other steps to further promote economic activity in Cuba.
Robert L. Muse, a Washington-based lawyer and expert on Cuba trade who reviewed the Commerce document Thursday, said the moves could be significant.
“They’re greater than the ones in January,” he said in an interview. “The rules in January were important – they established the precedent. But it was more of a beachhead, and it was a bit murky. Now they are engaging the business community in a way that’s going to be interesting and important to them. It begins to give them some real commercial traction.”
Among the key changes, Muse said, was that companies engaged in exporting authorized items to Cuba will be able to establish, maintain and operate physical premises in Cuba.
That, he said, is significant.
“Maintaining a presence is brand new – that’s the big further step they have taken here,” Muse said. “The intention is to bring American businesses to the island.”
An example, he said, would be an agricultural commodity company allowed to export to Cuba that would now be able to establish a sales office – or possibly even a warehouse – on the island, thus furthering its prospects.
Several other types of businesses could also be affected, including aircraft; telecommunications equipment; medicine; and materials, equipment, tools and supplies.
According to John S. Kavulich, president of the U.S.-Cuba Trade and Economic Council, the new regulations could permit a U.S. company to open a distribution center within the Mariel free trade zone; or shipping companies such as FedEx to have drop-off locations; U.S. airlines to have a ticket office; home renovation chains to sell building materials and supplies; or rice companies to have a sales office.
“And the companies can hire Republic of Cuba nationals as employees,” he said.
He added that regulations “would permit the most comprehensive trade and investment changes to the United States relationship with the Republic of Cuba in decades.”
However, just because the U.S. is authorizing such activity doesn’t mean the Cuban government will allow it.
“This is the U.S. saying to U.S. companies and individuals: You can do these things,” Kavulich said. “You will now have to convince the Cuban government to let you do them.”