NY plays catch up on trade with Cuba

HAVANA – During his 24-hour tour of Cuba this past week, New York Gov. Andrew Cuomo bragged to anybody he met that his state was the first to visit the island since the two countries agreed to begin reestablishing diplomatic relations.

"It's … a special honor to be the first governor representing the first state to be here. And I would say it's only fitting that it's New York," he told a group of Cuban officials at the start of his trip.

There's a problem with that claim: Yes, Cuomo is the first U.S. governor to visit the island since President Obama and Cuban President Raúl Castro made their historic announcement on Dec. 17 to normalize ties. But no, New York is not the first state to work with Cuba. In fact, it's one of the last.

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Congress tweaked the economic embargo on Cuba in 2001 to allow American companies to sell humanitarian goods to the island, including food, agricultural commodities, medicine and medical equipment. Ever since, 39 states have exported products to Cuba, yet New York has barely taken advantage of the opening.

During the past five years, those 39 states have exported a total of $1.8 billion worth of goods to the island, according to data compiled by the U.S. Commerce Department. New York's rank among the exporting states? Just 30th.

Exports are dominated by southern and Midwestern states that produce huge quantities of agricultural products, the biggest avenue of trade with the island. Even so, New York's health care companies have not taken advantage of openings to sell their products and services to Cuba.

Despite such sparse trade, when your state includes the financial capital of the world, you can catch up pretty quickly. By showing up in Havana with leaders of companies such as MasterCard, JetBlue, Pfizer and Chobani, Cuomo made up for a lot of lost time.

"These days, everybody's visiting Havana. You're going to run into the mayor of Podunk down there right now," said Pedro Freyre, chairman of the international practice of the Miami-based Akerman law firm, which is advising many companies looking to get into the Cuban market. "But New York is the Empire State. The symbolism of having its governor visit lends a certain amount of weight to the process."

Still, Cuomo and each of the New York companies are just starting to introduce themselves to the Cuban officials who will ultimately decide which American companies they will engage.

New York businesses reached several agreements with Cuban companies on the trip, including one between the Buffalo-based Roswell Park Cancer Institute and the Cuban Center of Molecular Immunology on a possible vaccine for lung cancer. Another deal will let the Manhattan-based technology company Infor to sell its healthcare software to a company in Cuba.

"Governor Cuomo is proud to have led the first gubernatorial trade mission to Cuba since President Obama's order and he, as well as the New York business leaders who accompanied him, see the value in being at the front of the line when the embargo is lifted," Cuomo spokesman Richard Azzopardi said in a statement.

"In the meantime, we are working within the current guidelines to build upon the agreements with Roswell Park Cancer Institute and Infor to increase trade between New York companies and the Cuban government."

The changes Obama and Castro launched in December will allow for a much wider array of American companies to sell products to the island.

Obama will let American firms help build up the island's archaic telecommunications infrastructure. U.S. businesses will soon be able to sell construction equipment, farming equipment and any kind of resource that helps Cuba's growing class of private entrepreneurs. U.S. banks will be able to establish corresponding accounts with Cuban banks, and travelers will be able to use their U.S.-issued credit and debit cards on the island.

John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, said the Cubans who run the different ministries that oversee each area of the country's economy are already drowning under offers and invitations from American business people and government officials. Since Cuba remains a centrally-run state economy, there are few people who can strike deals with American companies, and they are swamped.

"This isn't London," Kavulich said. "Those individuals have eight hours in a day, and in those eight hours, they need to focus on what is truly going to impact their country. They don't have time."

That's why he believes Cuban officials will often lean toward states and businesses with whom they already have a relationship.

Virginia, for example, said it shipped $225 million worth of goods to the island from 2010 to 2014. Virginia Secretary of Agriculture and Forestry Todd Haymore said it's good to see other states starting to get more involved in the Cuban market.

"I commend them for what they're doing," he said. "But I do think Virginia's in a very good position to be a nice player in Cuba going forward."

Haymore's position is strengthened by the fact that he's visited the island nine times. Virginia Gov. Terry McAuliffe has visited the Cuban Interests Section in Washington three times since taking office last year. The chief of the Cuban Interests Section, Jose Cabañas, has spoken at events in Virginia twice this year, and has another event scheduled in Norfolk in May.

During his early visits to Cuba, Haymore met mostly with agriculture officials. But he started expanding his meetings several years ago, as Virginia businesses from different industries asked about opportunities and Virginia governors pushed for expanded trade with the island.

It's those connections, Haymore said, that will determine which states come out ahead in the new world of trade with Cuba.

"The decision Virginia made years ago was the right decision," he said. "As the relationship between the United States and Cuba continues to evolve and, hopefully, improve, Virginia will be in a really good place."

AGomez@usatoday.com

Twitter: @alangomez