Cuba Rejects Ballyhooed Plan For A U.S. Factory On The Island

Nov 4, 2016

When the U.S. and Cuba normalized relations two years ago, hope sprang eternal that Americans could now do business on the island. But we got another reminder this week that it may also require eternal patience.

Last February, President Obama approved plans by an Alabama enterprise to build the first U.S. factory in Cuba in more than half a century.

The company, Cleber, would build small, low-cost tractors in a new free trade zone at the port of Mariel. The Cleber project symbolized all the hopes of re-established ties between the U.S. and Cuba. And Cuba’s approval seemed certain.

It wasn’t. This week Saul Berenthal, one of Cleber’s partners, said Cuba has denied approval. Among the reasons, Cuban officials said they were looking for more high-tech ventures for the Mariel development zone.

But Cuba analysts say the communist leadership’s enthusiasm for the new relationship with Washington has dropped - especially since the U.S. has yet to lift its trade embargo against Cuba. John Kavulich, who heads the U.S.-Trade and Economic Council in New York, worries about this possible scenario:

“Over time, the group in the government opposed to re-engagement with the U.S. saw in the [Cleber] proposal everything they don't like about re-engagement.”

Berenthal told WLRN by phone from Havana that Cuba says Cleber can still pursue a factory outside the Mariel zone, which it plans to do. But the company would lose all the duty and ownership benefits it gets inside the zone. He also argued Cuba ventures like Cleber's will be at a disadvantage as long as the U.S. embargo remains.

All in all, Berenthal advises that while doing business in Cuba, "patience is not only a virtue, but a necessity."