Order Starbucks latte? Not in Cuba

While Cuba beckons the American tourist and new rules of engagement between the United States and Cuba have opened some doors, US companies still face restrictions.
While Cuba beckons the American tourist and new rules of engagement between the United States and Cuba have opened some doors, US companies still face restrictions.PHOTO: AGENCE FRANCE-PRESSE

CHICAGO • Starbucks Corp can move to Cuba, but it still cannot sell lattes there.

The Obama administration last Friday tore down barriers to United States companies doing business on the communist-ruled island just south of Miami, but plenty of regulatory and legal roadblocks remain on both sides of the Florida Strait.

Airlines and cruise ships will see less meddling with their schedules, although the new rules approved by President Barack Obama will not lead to a significant boost in visitors, as US law still prohibits most Americans from travelling there.

Still, travel by US citizens to Cuba has increased by 40 per cent this year. Self-declared travel in 12 categories - including for religious and humanitarian purposes ¡- is permitted, Washington Post reported.

Preparing its foray into Cuba, Starbucks still cannot sell prepared drinks like a latte or a cappuccino, only packaged coffee, said Mr John Kavulich, president of the US-Cuba Trade and Economic Council.

The new rules of engagement have opened the door for Internet companies, but a Cuba government-owned company has the local monopoly on Web services.

The prospects for retailers and restaurants are murky.

Cuba's mostly poor population of 11 million has limited spending power and remaining US law tightly restricts what can be sold to the former Cold War foe.

And then there is the biggest wild card of all: the Cuban government, which will have the final say on who is licensed to do what.

Still, executives described the relaxing of US rules as an important step towards opening up the Cuban economy to US investment in a wide range of industries.

United Parcel Service said it "welcomes the opportunity to provide logistics services in and out of Cuba as regulations are changed".

US telecoms Verizon Communications and Sprint Corp last Thursday and Friday said they planned to offer cellphone roaming in Cuba.

But other companies, including Wal-Mart Stores, the world's biggest retailer, showed a more cautious tone.

While the new regulations would allow US companies to open retail outlets, there are limits on what can be sold based on US trade law enacted in 2000.

"Obama took a sledgehammer to US regulations today, but he's 50 per cent of the equation," said Mr Kavulich of the US-Cuba Trade and Economic Council. "No one should be fuelling up their corporate jet and filing a flight plan for Havana today."

REUTERS

A version of this article appeared in the print edition of The Sunday Times on September 20, 2015, with the headline 'Order Starbucks latte? Not in Cuba'. Print Edition | Subscribe