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Miami sees boon, some threats, if Cuba embargo ends

MIAMI (Reuters) - Miami’s business will gain if the United States unilaterally lifts its trade embargo on Cuba, but the city could face “unfair” competition from state-subsidized Cuban cigar, citrus and rum exports, its main trade body said.

Cuban-Americans pose for a picture next to an replica of the Havana's seawall, known as Malecon, during the Cuba Nostalgia festival in Miami May 16, 2009. REUTERS/Carlos Barria

This is one finding of a new report from the Greater Miami Chamber of Commerce which for the first time considers the scenario that President Barack Obama’s administration may ease or even end the embargo without major changes inside Cuba.

Obama has said the 47-year-old embargo will remain for the moment to press Cuba’s communist leadership to free dissidents and open up political freedom. But he has offered a new relation of more contacts and talks on issues like migration.

Bills before the U.S. Congress propose lifting restrictions on travel by Americans to the island and freeing up farm trade, boosting hopes among opponents of the Cuba embargo that more curbs might be significantly relaxed before the year end.

Greater Miami Chamber of Commerce Chairman Bruce Jay Colan said the business sector of Miami -- located 150 miles from Cuba and with its strong Cuban American community -- needed to address, and be prepared for, this new reality.

“We now realize that it is possible that without a great deal of change in Cuba, we could in fact have the embargo lifted,” Colan told Reuters in an interview on Monday.

“You then have to recognize what does that mean ... well, it’s not all necessarily peaches and cream,” added Colan, who is also a partner of law firm Holland & Knight.

If increased bilateral trade came with little or no change in Cuba’s centralized state-run system, potential threats to Miami’s business could be posed by subsidized Cuban products “that compromise international labor standards, intellectual property rights, copyright laws and quality and environmental protocols,” the chamber report released at the weekend said.

“Cuba could simply dump products such as cigars, citrus and rum, without any regard to production costs or price, to generate hard currencies,” said the report, entitled “The Business Impact of a Post-Embargo Cuba”.


Previous chamber reports on this subject had focused on the trade and business impact on the Greater Miami area of a “free” Cuba -- one which would have abandoned its one-party communist system and embraced free-market economics.

Nevertheless, the new report still portrayed Miami, with its “geography and demography”, being ideally placed to gain from more U.S.-Cuban trade through a lifting of the embargo.

“Miami should logically benefit more from this increased trade than any other area within the United States,” it said, adding Cuba offered investment opportunities in infrastructure, technology, tourism, light industry and housing.

The report saw Miami as a “natural entry point for Cuban trade” and saw U.S. consumer products, machinery, computers, pharmaceuticals and construction equipment flowing to Cuba.

But it warned that Miami’s business sector could face “unfair competition” from products shipped from Cuba. “You could have Chinese stuff, you could end up with an industry violating U.S. copyright laws,” Colan said.

The chamber also saw Cuba taking tourists and some cruise ship business away from Miami.

“Miami may see the loss of some cruise ships which could be repositioned to Havana as their home port, and a reduction in tourism,” the report said. “Other industries, such as companies engaged in growing sugar and winter vegetables may also be negatively affected.”

But the chamber saw Miami’s large Cuban American community as a bonus for increased U.S.-Cuban trade, saying Cuban American business executives, many of them working in large national and multinational enterprises, could use their personal and family contacts to “carry the flag’ of U.S. business to the island.

“This is potentially perhaps one of the greatest if not the greatest economic opportunity that Miami has or will have,” Colan said. “Miami cannot afford to sit back and let other communities prepare.”

Editing by Jim Loney and Mohammad Zargham