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June 8 — The administration should work with Congress on a timeline for repeal of the Cuba trade embargo, the President's Export Council said June 8.
U.S. exporters will not realize the full benefit of normalized relations with Cuba without this step, the council said in a letter to President Barack Obama.
“We therefore recommend that your Administration engage Congress to identify a timeline for legislative actions beginning this year that will culminate in a full repeal of the embargo and the elimination of travel restrictions as soon as possible,” the letter said. The President's Export Council (PEC) approved the letter June 8 during a teleconference meeting. Private sector members of the council include the chief executives of Lockheed Martin Corp., Dow Chemical Co., AES Corp. and Campbell Soup Co.
Obama has repeatedly asked Congress to repeal the embargo after announcing in late 2014 that the two former adversaries would pursue normalized relations. The Republican leadership has not moved on any of the pending legislation that would either revoke the embargo or end travel restrictions. Bills introduced by members of both parties have remained in committee with no hearings scheduled.
PEC members accompanied Obama on his March trip to Cuba (55 ITD, 3/22/16).
The Treasury and Commerce departments in 2015 and 2016 made a series of regulatory changes to ease trade and travel restrictions (51 ITD, 3/16/16). The steps have laid a foundation for greater economic engagement but there is a “great deal of work to be done to continue to seize the opportunities that are available for Cubans and for American businesses,” PEC Vice Chairman Arne Sorenson, chief executive of Marriott, said. Starwood Hotels & Resorts as well as Marriott International Inc. are among firms that have gotten Treasury Department go ahead to do business in Cuba.
PEC Chair Ursula Burns, who is chief executive officer of Xerox Corp., said impediments to doing business in Cuba included dual currencies, a 10 percent fee on foreign exchange transactions involving U.S. dollars and hiring constraints. Cuba requires that all labor be hired through government agencies. The Cuban government maintains the Cuban peso, used to page wages of domestic workers and for domestically produced goods, as well as the convertible peso for foreign trade and the tourism sector.
The administration's regulatory dialogues with Cuba should continue to solicit private sector input, the letter said. Companies doing business in Cuba should have a platform for comparing notes with other businesses and with U.S. government representatives to find practical solutions to issues that have surfaced, Sorenson said. Such collaboration will support implementation of the administration's policies, he said.
One of the administration's regulatory changes authorized so-called U-turn transactions involving Cuban persons by U.S. financial institutions. The administration should continue to engage U.S. financial institutions to provide the necessary assurances processing of U-turn transactions involving Cuban persons who are not otherwise barred from the U.S. financial system is permitted, the letter said.
Cuba has a strong need for infrastructure investment, Sorenson said. The administration should invite exchanges with appropriate Cuban government officials and allows stakeholders the opportunity to discuss capacity-building in water resource management, underground utilities, and smart energy grids, as appropriate and consistent with U.S. law, the letter said.
Deputy Commerce Secretary Bruce Andrews said he wanted to ensure that Commerce is providing up to date information on the changes, which he said herald a new era of U.S. commercial engagement across the Caribbean and Latin America.
Consideration should be given to envisioning Cuba as a regional logistics and supply chain hub as U.S. policy makers plan for the future, the letter said. The PEC recommended a discussion of the issue at the 2018 Summit of the Americas in Lima, Peru.
The administration should build on outreach efforts with additional, sector-specific webinars where commerce and treasury officials can address questions on regulatory changes, the letter said. Individual webinars, beginning with banking and financial services and extending to such sectors as agriculture, technology, and small and medium-sized enterprises, will facilitate in-depth discussions, the letter said.
The next and final meeting of the President's Export Council will take place on Sept. 14.
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The letter is available at http://trade.gov/pec/docs/PEC-Cuba-Letter-and-Trip-Findings.pdf.
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