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In the wake of Cuba and the U.S. reopening their Embassies in each other’s capital on July 1, 2015, the 33rd annual FIHAV (Feria Internacional de La Habana) trade fair, held from November 2 to 7, illustrated increasing international interest in the Cuban government’s decision to make the island a more attractive destination for foreign trade and investment. Some 900 companies were represented, showcasing the products and services of 4,500 exhibitors from 70 countries to approximately 150,000 visitors and participants.
At FIHAV the Cuban government released the 2015 version of its Portfolio of Opportunities for Foreign Investment, a collection of 326 pre-approved projects in the following 12 economic sectors (followed by the number of projects): mining (15), agri-food (40), tourism (94), renewable energy (22), petroleum (86), industry (21), transportation (15), bio-technology and pharmaceuticals (9), health care (3), construction (14), commerce (4) and audio-visual (3).
Twenty of these projects are in the Mariel Special Development Zone (ZEDM), the biggest infrastructure project ever built in Cuba, where foreign investors benefit from tax incentives additional to those provided in Cuba’s new Foreign Investment Act. Located 50 km west of Havana, the ZEDM extends over 42 square km and includes a port destined to become one of the most important in the Caribbean. The Zone is intended to attract foreign direct investment and encourage technological innovation as well as exports.
November 3 was Canada Day at FIHAV. “This is going to be a great opportunity to strengthen both trade relations and investment interests between Cuba and Canada,” said Manuel Marrero, Cuba’s Minister of Tourism, noting that during the past year Canada had climbed from fifth to fourth largest trading partner with Cuba, behind Venezuela, China and Spain.
Christine St-Pierre, the first Québec Minister of International Relations to visit the island, described her Cuban hosts’ welcome as warm and promising, particularly in priority sectors of the province’s economy such as bio-food, biotechnology, information technology and renewable energies. “The Cuban authorities’ interest in several areas in which Québec is a leader is obvious”, she stated. With the Cuban economy in transition, continuous diplomatic relations between Canada and Cuba over the last 70 years puts Québec in an advantageous position to develop partnerships with this country, the Minister added.
As part of its economic modernization agenda, Cuba adopted sweeping changes to its laws and regulations that, among other things, authorized the sale of real estate to foreigners for the first time in many years. When the U.S. embargo against Cuba ends, private property prices on the island are bound to increase. President Obama has repeatedly stated his desire to lift the embargo, but that will require legislation adopted by the U.S. Congress, both houses of which are now controlled by the Republican Party. Until that happens, Canadian exporters and investors have a competitive advantage in the Cuban market. However, given increasing pressure from both American business interests and a majority of Cuban-Americans, that advantage could be short-lived.
For further information, please contact Paul Fauteux or Alfredo Moreira.
Paul Fauteux holds law degrees from Montreal and McGill Universities. He is an expert in international law and one of five Canadians to hold the Diploma of The Hague Academy of International Law. A former diplomat, he served as Minister-Counsellor, Congressional and Legal Affairs, in the Canadian Embassy in Washington, D.C. He speaks fluent Spanish and closely follows developments in Cuba since the historic shift represented by the Cuban Communist Party’s 2011 resolutions on modernizing the country’s economic model.
Alfredo Moreira, one of CMKZ’s senior partners, holds law degrees from Paris and Laval Universities. His practice is primarily focused on international trade, market development and business and investment strategy in Latin America. A native Spanish speaker, he is also fluent in Portuguese. He has authored numerous articles on the North American Free Trade Agreement as well as on access to the main Latin American markets.
