Trump Could Ice Thawing U.S. Relations with Cuba

Trump Could Ice Thawing U.S. Relations with Cuba
By Marissa Piazzola Published December 27, 2016 Cuba FOX Business

The United States' relationship with Cuba has thawed over the last two
years, thanks in part to a December 2014 agreement between President
Barack Obama and Cuban President Raul Castro to end a decades-long
period of policy isolation. In the years since, major corporations have
signed deals to do business with the Caribbean island and optimism about
the future of the former enemies has grown among citizens of the two
countries.

With President-elect Donald Trump set to take office on January 20,
though, many wonder whether the warming U.S.-Cuba relationship will
begin to again freeze.

"We believe [Trump] will reverse almost all the things that President
Obama did," said Horatio Ortiz, managing director of Classified
Worldwide Consulting, a frontier market intelligence and security firm.

Trump warned back in September at a Florida campaign event that U.S.
policies toward Cuba could change if he were elected President, calling
the agreement one-sided and benefitting the "Castro regime."

"All of the concessions that Barack Obama has granted the Castro Regime
were done through executive order, which means the next president can
reverse them – and that is what I will do, unless the Castro Regime
meets our demands. Those demands will include religious and political
freedom for the Cuban people," Trump said.

More recently, Trump again warned about potentially cutting ties with
Cuba on Twitter (TWTR) and in a formal statement following former Cuban
President Fidel Castro's death last month.

It's true that little has been achieved by the Obama administration in
the way of dismantling Cuba's single-party political system or improving
human rights. The Cuban Commission for Human Rights and National
Reconciliation Opens a New Window. (CCDHRN) has documented 9,484
political arrests in Cuba through the end of November 2016, up from
8,616 for all of 2015. What's more, the totalitarian reins may very well
tighten once Trump takes office.

"The hardline Communists in Cuba will use this Trump presidency as a new
call to arms against the imperialistic/capitalistic America," said Ross
Thompson, Ortiz's colleague and fellow managing director at Classified
Worldwide Consulting.

"They lost Fidel and that was a very big blow as far as their image…they
need to kind of drum up some fervor and we see the target of that being
anti-Trump kind of like it was pro-Fidel."

Industries That Stand to Lose

The tourism industry has been at the forefront of U.S. business in Cuba
following the 2014 agreement. Though Americans are still unable to visit
Cuba purely for tourism purposes due to a longstanding embargo, it's
much easier to get to the Caribbean island than it once was thanks to
multimillion-dollar agreements between major U.S. corporations and the
Cuban government.

Ten U.S. airlines regularly fly commercial flights to Cuba including
American (AAL), JetBlue (JBLU) and Southwest (LUV). Several cruise lines
including Carnival (CCL), Royal Caribbean (RCL) and Norwegian (NCLH)
have also received approval to sail to Havana, while Starwood Hotels &
Resorts (HOT) signed a deal to manage three hotels in the Cuban capital.

Meanwhile telecommunications companies including AT&T (T), Verizon (VZ)
Sprint (S) and T-Mobile (PCS) reached agreements with the Cuban
government to offer roaming service to U.S. travelers.

Tech corporations, too, made headlines recently with their own
initiatives to enter the Cuban market. Alphabet's Google (GOOGL) signed
a deal with Cuba's state telecom company to install computer servers on
the island, thereby improving Internet service for the Cuban people.
General Electric (GE) is hoping to reach an agreement soon to be able to
sell power, aviation and medical equipment to the Cuban government.

In theory, U.S. investment in Cuba by all these names and others could
be rolled back under a President Trump, though experts note it would not
happen overnight.

"It's not like one fell swoop, it's something that requires this
collaborative process among U.S. agencies, but in theory the authority
is there. Just like President Obama had the authority to do this,
[Trump] has the authority to undo it," said Pedro A. Freyre,
international practice chair at law firm Akerman LLP.

Freyre, who was born in Havana but came to the U.S. with his family in
1960, says there are other industries in which the president-elect would
have a tougher time imposing any sort of regulations.

"What he could not undo is the framework for sales of agricultural and
pharmaceutical commodities because of a carve out from the embargo. It's
not regulation, it's law…those sales throughout the years have been in
the range of hundreds of millions of dollars, which is not an
insignificant amount in the context of Cuba," he said.

According to a 2015 U.S. Department of Agriculture report Opens a New
Window. , U.S. agricultural exports to Cuba totaled $300 million in
2014. With seven out of the top 10 agricultural states having voted for
Donald Trump, Freyre says their investment in Cuba will likely be
something the new administration takes into consideration.

Another factor to consider is how Cuban-Americans feel about expanding
relations with Cuba. According to a 2016 poll conducted by Florida
International University Opens a New Window. , 63% of Cuban-American
residents in Miami-Dade County, Florida oppose the continuing embargo.

"I think that there is a very broad consensus with Cuban-Americans that
we all want to see a free and prosperous Cuba…where people can speak
their minds and where people can have their own business and where Cuba
moves up," said Freyre, who believes it will be difficult for Trump to
achieve success with Cuba through harsh measures.

Source: Trump Could Ice Thawing U.S. Relations with Cuba | Fox Business
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http://www.foxbusiness.com/markets/2016/12/27/trump-could-ice-thawing-u-s-relations-with-cuba.html