Australian trade minister Andrew Robb met with Cuban trade minister Orlando Hernandez Guillen yesterday to discuss trade links in agriculture, pharmaceuticals, mining and petroleum, according to Cuba’s state-run news outlet Prensa Latina.
Merchandise trade between Australia and Cuba was A$12.2 million between 2013 and 2014. One of Australia’s major exports to Cuba was meat, not including beef, according to the Australian government’s Department of Foreign Affairs and Trade. Imports to Australia made up the bulk of the trade, accounting for A$8.4 million and mainly comprising manufactured tobacco, alcoholic beverages, edible products and coffee. Australia does not currently have an investment relationship with Cuba.
However, a portfolio of opportunities for foreign investment published by the Cuban government in November 2015 was also discussed at the meeting, according to reports. The portfolio identified 40 food and agriculture projects approved for foreign investment, including a $35.5 million investment in equipment to modernise a poultry slaughterhouse and development of a $7.3 million fruit processing plant.
The November 2015 portfolio suggests investment opportunities in livestock, coffee and dairy production and processing. The report also describes improvements in Cuba’s sugar and sugar by-products processing capabilities as priorities for foreign investment. Australia is the world’s second-largest raw sugar exporter, which is processed at 24 sugar mills and either directly exported or refined in four refineries, according to Australian government, according to a 2015 USDA report on Australia’s sugar industry.
Foreign investment in Cuba’s tobacco industry is prohibited.
Robb is leading Australia’s first business mission to Cuba as it works to increase foreign investment and improve relations with the US. The US and Cuba announced the restoration of diplomatic relations in July, more than half a century after the US closed its Cuban embassy in 1961.
Cuba also recently struck an agreement to restructure $16 billion in debt with the group of nations collectively known as the Paris Club.
“Cuba has begun a reform process that has seen positive changes in its foreign investment laws, and a recent debt agreement by the Paris Club Group of Creditors will make it easier for Cuba to gain access to international finance,” Robb said in a statement.
In 2014, the Cuban government passed law 118 to encourage foreign investment through tax incentives for foreign investors. However, foreign investment proposals and entry of foreign-owned entities into a commercial registry still require government approval.
With 78 percent of Cuban land under government control and three large government holding companies overseeing the agricultural industry, a 2014 Brookings Institute report notes that less than half of Cuba’s agricultural land is currently under cultivation and describes Cuba’s agriculture sector as hampered by “burdensome restrictions”, even after law 118 was passed.