Dealing with the New Cuba

Speculation that a move toward normalization of relations between Cuba and the United States might be imminent has been a recurring theme for decades. While the actual move toward normalization took many years longer than expected, President Raúl Castro has reformed Cuba’s moribund economy more along market lines. And on December 17, 2014, Castro and U.S. President Barack Obama jointly announced a historic agreement to begin normalizing relations between their nations. This paper examines whether or not the related anticipation of new business opportunities is warranted, while taking a fresh look at the investment and trade potential and risks that a more market-friendly, post-embargo Cuba presents to foreign investors and traders. Existing business partners must be prepared to modify or change their strategies to fit with an open and more competitive Cuban market. Even if the long-awaited market opening happens as announced, it will be done “a la Cubana,” which means existing and potential business partners must have patience and nerves of steel — in addition to capital.

• Cuba-United States relations, international trade, Cuban market reform, trade embargo, economic sanctions, Latin America