Caribbean Export OUTLOOK 2016 - 2017

TRADE & EXPORT HOT SPOTS

Doing Business in Cuba By Dawne Parris

A market of over 12 million people is nothing for Caribbeanexporterstothumbtheirnosesat.That’s the kind of market from which any company in CARICOM would benefit. So when CARICOM andCuba signed a reciprocal Trade andEconomic Cooperation Agreement 15 years ago, it provided exporters in the region with access to millions of potential customers. The reciprocal agreement, whichfocusedmainlyontradeingoods,gaveduty- freeordutyreducedentrytoCubaofspecificgoods suchasfruitjuices,sauces,condiments,seasonings, and clothing from the CARICOM region. While theagreementisnow,moreorless,inactive,several establishedcompanieshavetakenadvantageofthe opportunityofaccesstotheCubanmarket,though not without having to overcome several hurdles. BaronFoodsLimited,a SaintLucianmanufacturing company with a Food Safety SystemCertification (FSSC) 22000 V3 certified product range of 165 condiments and beverages is one such company. Five of its condiments and sauces have been approved and accepted for sale in the Cuban market and the company is awaiting a confirmed order from TRD Caribe, one of the largest food

and beverage distributors inCuba. It’s also eyeing the hotel and tourism sector and retail stores.

challenges of breaking into and competing in the Cuban market, however, are numerous.

Chief Executive Officer Ronald Ramjattan says it would have been remiss of his 24-year-old company, which is already in several othermarkets in the region, not to have looked at Cuba. “Cuba is a new and emerging market with over 12million inhabitants sharing a similar culture and food preference with the rest of the Caribbean people,” he says. “The Cuban market is similar in many aspects to the rest of the Caribbean, even though the Spanish influence does have its fair share of difference from us.” As Ramjattan acknowledged, the benefits are significant for any CARICOM exporter. They include having access to a large, regional market that American competitors can’t take advantage of, due to the longstanding US embargo against tradewithCuba. Even though fromJanuary 2015, it became possible for Americans to visit Cuba without a specific licence if the visit falls under any of 12 categories, there are still limits to the amount of goods that can be brought into the country in luggage, and shipped by boat from abroad. The

Cuba has one of the world’s few remaining centrally planned economies, with the government controlling 90% of the economy. All trade with that country must be conducted through the state. Goods can therefore only be imported into Cuba by government entities and joint ventures holding permits for the goods in question. The high cost of transportation (both sea and air); legal and institutional differences; and insufficient finance and credit mechanisms are some of the other major obstacles. Added to the strict rules which guide the country’s import policy, language was a hurdle for Baron Foods. “Spanish being the spoken language is one of the main barriers we had to face. The selling terms are completely different too as they are looking for three to six-month credit facilities,” says Ramjattan.

Kapril Industries, however, did not have the language barrier problem.

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