republic. complex next, some of the speakers from the heritage foundation conservative summit. and they look at the impact of the sony cyberattacks. complex book tv and mr. in history tv are traveling to u.s. cities to learn about their history and literary life. we partnered with comcast. >> i wrote these books, they are two volumes, the reason i thought it was important to collect these histories, we link -- wheeling transformed into a big city and it is kind of uncommon in west virginia in that it drew a lot of immigrants from europe here in search of

jobs and opportunity. so that immigrant generation is pretty much gone. i thought it was important to record their stories to get the memories of the immigrant generation and the ethnic neighborhoods they formed. it is an important part of our history. people focus on the frontier history, the civil war, they are important, but of equal importance in my mind is the industrial period and the immigration wheeling had. >> it starts as an outpost on the frontier. the river was the western extent of the united states in the 1770's. the first project funded by the federal government for road production was the national road that extended from cumberland,

maryland to virginia. when it comes here to wheeling, that will give this community, about 50 years old, the spurt it needs for growth. and over the next 20-25 years, the population of wheeling will almost triple. >> watch all of our events saturday at noon eastern on book tv and on american history tv on c-span3. >> now trade experts discuss u.s. relations with cuba. talking about whether a full embargo lift is possible in congress commercial opportunities, and how the international community has responded to the announcement in december. this is about 90 minutes.

>> good morning, everybody. thank you for braving the weather today. we were a little worried that the federal government might have a delay or a closure because, as you all know, when there's a half an inch of snow in washington anything can happen, can have a disaster. john came in from buffalo this morning where, when they have half an inch of snow, that's sort of like spring, right? it's like pollen on our cars here. i'm kevin levinson, the executive director. we are delighted to have you all here. before i turn it over to our moderator ambassador, john, i would like to thank team, diego, inez. andrew, victoria, all of our interns. we have a big announcement that we made yesterday which was the launch of a new blog called america's trade policy.com. it was actually created in 2013

at the woodrow wilson center for scholars. wita has taken it over and it is going to be a new content platform for wita. we welcome input from members of the trade community. there will be information on it in the back, outside the room when you leave today. in fact, john was going to mention this in his remarks. we're really pleased that a book by the peterson institute on economic normalization with cuba, we're going to be publishing the first chapter of that on our blog. john will talk about that but you'll be able to find that on our website. on thursday, january 29th, we're hosting a panel feature the reverend david beckman of bread for the world and he's talking about the world hunger report, titled when women flourish we can end hunger. the panel discussion will include rich leach from the

world food program, alease young and claude fontheim. on friday, february 13th we have our annual trade councils program with the four councils from the ways and means and finance committees. that will be february 13. now to today's panel, i'll leave it to john to introduce our panelists. john is a long-time wita friend, one-time board member, now with the d.c. office of covington and burling and co-chair of trade practice was deputy and u.s. general counsel at ustr. he worked at the department of defense in the 90's with then defense secretary bill cohen with was senator cohen, senator collins and senator frist. john, thanks for doing this, thanks to our panelists. take it away. >> thank you for being here. thank you for wita for putting this on.

i want to open with a few remarks. the title today is thawing of u.s./cuba relations. i wonder how many in the audience saw thawing and thought it would be a good place to duck into on a morning like this. whatever prompts you to join us, we're glad you're here. the turnout for this is consistent with other cuba-related events. not only since the president's announcement but over the years, cuba has just captures the imagination. i remember back when we were trying to get support for the u.s. colombia free trade agreement which i know enjoys support from folks on this panel and folks in this room colombia represented 8 , times the market opportunities. but generating interest was always limited compared to cuba

which is seems to capture the imagination. today's focus is not on the polemics of the u.s./cuba relations. we don't have time to go through the history. but i think it's fair to say it's an economic issue but also an emotional issue. there are families who had their property confiscated, whose families were upended, who have strong views about relations with the current government in cuba and for understandable reasons. today we're going to focus on the president's announcement and what some of the perspectives are from the legal and business community. i want to mention as ken did the peterson institute in the category of great timing. about six months ago they came out with a study called economic normalization with cuba, a road map for u.s. policy makers.

similar to the focus of today's panel, it's not about the embargo, is it good, is it bad. it was just, frankly, a workman-like approach as you would expect from its authors, gary huffbauer and barbara cutchwar. these are the things that policy makers need to think about, when the tech tonicic plates move. the question ripens for a serious discussion about normalization and i would commend it, it's on wita's website and its new website and through the peterson institute. i think the first chapter of that book is available online and there may be even some copies outside on the table. but it's a very thoughtful piece. what i appreciated about it, frankly, was in trade debates, the camps usually fall quickly

into two, the art ent free traders and the ardent protectionists. consistent with the thoughtfulness of the peterson institute work product, this argues that, look, we should be -- i think the implicit message is opening market with another country is a good thing, but we should be approach it with some caution and we should approach it in a measured way and not in a breathless way. and the analogy that gary and barbara use in it is russia. with all due respect, that is an economy that is not as open as i think a lot of us hoped it would be at this point in time. when we talk about opening markets with other countries, we sort of -- those of us who are in the free trade camp like to think, these are markets that are really going to be open to us and not in name only.

you have an oligarchy in russia that the study references and discusses as something to avoid when we talk about normalizing and opening relations with cuba so that we don't lose the leverage of the u.s. market without having some strategy for ensuring the cuban market is going to be open and is not going to be sliced up the way that we have seen in russia. they conclude that not because such an outcome in cuba would be in the bad interest of u.s. companies, but also obviously the cuban people because economic freedom is going to be a source of their long-term welfare. with that, let me turn it over

to our terrific panel today. i'm going to introduce them in the corner we are seated, that i'm going to mix it up as far as the order of our speakers. to my left is vice president of corporate affairs at cargo. devry has been that position since 2004 and before that was a colleague of mine where she handled agricultural issues and she is also the president of the u.s. agriculture coalition and is active in this space. jake colvin is the vice president at the national foreign trade council. jake in addition to being very act give on behalf of american businesses and others, has been

active in cuba and published a paper entitled the case for a new cuba policy, a roadmap for the obama administration. to his left is robert muse, a lawyer in washington and has represented many clients on matters regarding cuba and has a long history with this issue and has testified before congress and has been an act give printed -- active participant with regard to cuba. and to his left is john kavulich, senior policy advisory of the u.s. trade and economic council and formerly served as its president in addition to making it in from buffalo has been active for probably three decades on cuba policy matters and we welcome him and the

others of the panels today. so each will provide remarks for 5-7 minutes and then we'll have time for questions and we're going to start with robert as to the president's announcement. i know folks are savvy enough to know the president did not announce the and of the embargo. most people pick up the newspapers and thought it was over and thought they could get on an airplane, but it's a more complicated matter that robert will lay out for us. robert, over to you. >> thank you, john and wita for putting this event on this morning. and thank you for coming. the title of this event is the

thawing of u.s./cuba relations what does it really mean for trade. the short answer is it means as much as president obama or any successor wants it to mean. the president has the authority as i will demonstrate, by the nature of the announcement to license trade with cuba bilateral. he can remove all export controls. and he can lift import controls. he has done that. his announcement in december 17 in terms of imports from cuba allow $400 worth of goods to come to the u.s., including $100 of alcohol or tobacco. he can do that not the

regulations that prohibit imports of cuban origin products. so his authority has been drafted allowing imports from cuba. exports, he has allowed five different areas of exports. building materials and residential construction consumer goods that are not defined yet were identified that can be used by cuban entrepreneurs. i think that means goods that could be sold in cuba and that is essentially limitless. john could remind me. he has a list. there are close to 10,000 u.s. trademarks registered in cuba, goods can be sold in cuba. he also allowed for farm equipment to be sold to small farms.

the export of equipment. he licensed sales to cuba and finally financial services in terms of direct thinking and the use of credit cards. my point is the announcement of december 17 summarizes and confirms what i and other people have been arguing for years, presidential authority in relation to trade with cuba is essentially unfettered. you will hear some comments that the act of 1996 codified the embargo and limited presidential discretion in this area. it is not true. when the embargo was codified, it's codified in place the presidential discretion and authority exercised under december 17.

there may be some copies at the front. i have written on this varies times. there is an article in the fall edition of "america's quarterly" for the legal basis of what i've said. i would want to leave as much time as possible for questions so i will end by saying from the small beach i've described residential sales can be used in residential renovation and construction. take that as a model for u.s. business. at the moment, there are sales to cuba. it is one of the ways commerce is allowed. those commodities have to be sold, purchased by state instrumentality. i suspect that is going to be true with u.s. exports

initially, whether building materials or farm equipment or consumer goods. however i can see that is going to expand so u.s. businesses should be thinking early on about things like warehouse and distribution facilities in cuba. cuba has renovated its national port on the north coast. think about the opportunities of expanding this small opening to corporate access. i believe president obama means it to be a legacy issue. the secretary of commerce will be going in april. i do not think she is going unless there is a larger initiative underway at this point. so i think president obama wants

a legacy issue. this is one of the few that remains. so i expect to see a substantial expansion and broadening of these small openings to give u.s. corporate sector its first real opportunities in cuba since the embargo was imposed 55 years ago. thanks. >> thank you, robert. next we're going to go to devry. >> it's great to see you all here this morning. as i understand, we had to expand the room because of the interest in the topic. as the ambassador stated there's often great interest when we talk about cuba in washington. i truly believe that your presence here today and the size of the group not only represents the policy imperative that we have in front of us but the moral imperative that we have in front of us as not only from our standpoint in agriculture

industry but as americans in general. for those of you that don't know, last week the u.s. agriculture community broadly launched publicly at the national press club the u.s. acc which is the u.s. agriculture coalition for cuba. that group is growing. we're continuing to add members since our launch. but that group basically makes up the broad cross-section of the u.s. agricultural and food community with the express purpose of coming together to end the embargo. i'm currently serving as the chair of that organization and before i go any further, i'd like to give you the #poundcubaagtrade. many people, i was speaking with jake a few mince before and he said, wow, you pulled that together in two days. actually, we've been working for about eight months to get

ourselves organized around a charter. i'll go through exactly what it is that we've committed to as a group. but why eight months ago? as an outgrowth of one of the trips that i took to cuba last march basically on a sales call, we've been able to sell food into cuba through humanitarian channels since the year 2000. our company was there since 2002. i recognized how difficult it was for our business to actually sell food to cuba. fast forward into may. our cfo was -- and i traveled with the delegation, was part of a historical delegation of the u.s. chamber of commerce to cuba, led by tom donohue, to assess the business climate. the cuban government has implemented a new foreign investment law that folks may or may not know about. at the same time, they have put laws in place to begin allowing for people, individual people,

to become part of the private sector. the cuban government is transitioning many individuals off of the government payroll and recognizing the need to empower private enterprise. while we were there we met with most branches of the cuban government. we were able to visit cooperatives. we were able to meet with entrepreneurs, and we were also able as the first americans to visit the port of mariale that has been funded by the brazilians for $800 million. we visited a canadian investment in energy and we feel like we got a very broad-based understanding of what's going on in the cuban economy. point blank, the rest of the world is there. they're beginning to be there more significantly, and the american business community is not there. so what is the u.s. acc and what are we planning to do to shift the narrative here in washington and actually drive change? first of all, we've come

together with the express purpose to liberalize the trade between the two economies and the primary purpose of ending the embargo. i do understand that there have been discussions around how far the president can go, and we certainly welcomed the announcement on december 17th, but in our conversations with the administration, we know full well that even on the financing side, the executive order will only take us so far. quite frankly, we are strung by our ability to use u.s. financing to sell food to cuba. so we very much see the end of the embargo as a necessary step in allowing us to have meaningful trade. we're reenergized to establish cuba as a market for u.s. agro project -- product. currently there are 11 million citizens there and it's a natural market. it's 90 miles off our coast. certainly none of us in business in this room could say that cuba is at the top of the list in terms of markets for their

company, but what they can say is it makes absolutely no sense that if we have a partner very close to our coast where it's a natural market, that we should be denied an opportunity to trade there. as our coalition, we have four goals. we're going to advance a constructive dialogue here in washington on u.s./cuba relations. we're going to actively engage to end the long-standing embargo. we're going to work with key shareholders to drive momentum towards historical change and our hope is in 2015. we are going to take public platforms to explain the moral imperative of trade liberalization with cuba. i'll give you a few statistics because even though we've been able to sell food into cuba since 2002 and we saw an initial uptick as u.s. agricultural community through 2008, u.s. agricultural sales have declined significantly since then.

where it reached about $700 million in sales in 2008, we're around $450 million in sales now. u.s. rice, cuba used to be its largest export market. u.s. rice is no longer exporting to cuba. let me restate that. u.s. rice indicates that cuba was its largest export market. that may come as a surprise. soy, the soy industry, they see cuban use a lot of soy oil. it's also a necessary input into animal feed. 99% of the cooking done by cubans is using soy oil. while in 2002, 2012, the soy growers saw that they had about a 70% market share. that declined to 40% in one year. wheat is making zero sales into cuba at the moment. they're estimating that to be about a $250 million loss year on year.

and they believe that the cubans are paying three times the price for transporting agricultural products to cuba. so this is about the affordability of food in the cuban market. the cubans are spending too much money on the financing of food and transport of food. bottom line, they're spending too much money on food. so at the end of the day, what we have seen is the brazilians the vietnamese, the europeans and argentinians are all taking our market and it's quite a unecessary event for them to do that. again, while we think it's a modest market, it's important. this to us, i would like to express, is not about a single trade flow of u.s. commodities going south. why do we believe that there needs to be an absoluti e normalization of relations? because this is about the broader american business community being able to take a

chance to advance sales of goods, services, and capital we believe that through the broader development, economic development of the cuban market, we all gain. not only that, the 11 million citizens of cuba gain. those are 11 million citizens who have been under a policy experiment for 54, 55 years. it's a failed policy experiment. what i can say is, if you're a farmer and you plant a seed the same way in year one and you try it again the same way in year two, and then after 55 years you're still doing the same thing, but that seed is not germ inated, and popped up and taken advantage of photo synthesis and grown, wouldn't you think about doing something differently? that's what is upon us is changing the status quo. it's easy to be on the side of status quo because there is a negative narrative out there. our coalition last week had azs

broad subset of bipartisan support. we had senator jerry moran and sam farr from california, rodney davis, republican from illinois, kevin kramer, republican from north dakota, the secretary of agriculture which i believe is the first cabinet member since the embargo to stand up with a group that's ending the embargo was there. the governor from missouri agreed to work on a bipartisan basis to build other support from republican and democrat governors across the nation. so it's a bipartisan issue. one thing we need to remember is that cuba is a w.t.o. member which means they'recl offering benefits to other members and we're just simply not in the game. so it will require normalization of relations. again, we believe that it's not only the majority of congress on our side but we also know that

the majority of the american people are on our side. so at this point what we can say is that we certainly recognize the history, the difficulties and the emotion and pain of the u.s. agricultural coalition for cuba is that we can collectively own the future. that's what we can own. i would submit to the business groups that are in the room today that often get steered down the course of moderation on this policy or, gee, it's too tricky to talk about, actually join us, stand up, recognize that the policy imperatives here, we've got a lot of things on our plate from trans-pacific partnership to tpa, to t. tip, but we can't wait one more day. why wait for another president. the answer is in front of us now. we welcome conversation with the u.s. coalition on cuba and i'm open

for questions. thank you. >> great, thank you. jake, we're going to turn to you next. >> sure. thanks john, and thanks, diego and ken. for those of you who don't know we're a business trade association in washington d.c. that promotes international trade. we've run a coalition called usa engage which opposes unilateral sanctions and promotes the ideas of u.s. engagement in the world. we are a good compliment on what devry is doing. congratulations because you've done a lot in a short period of time and it's been really impressive. she's done a good job of laying out the case for normalization. so i would be remiss if i didn't say we support that, too. rather than saying the same thing that she said about why normalization is good and important and should happen now, i thought i would focus on two other things. the first is the importance of the announcement that's been made by president obama to the

business community and also some of the longer term challenges aside from the sanctions to re-establishing trade investment ties between the united states and cuba. first on the announcement, it's just generally really good news. this is a fundamental change in u.s./cuba policy. it wasn't half measures or couched in rhetoric against the castros. what it does is flips the debate upside down. this is the first time sincen 2000 when congress was passing the trade sanctions reform act where we have a policy of engagement that opponents, the few of them that are left, have to respond to. the other thing that it does is it sends a signal to the business community that it's ok to express interest and start to explore cuba. i think there will be a lot of curiosity from the business community. it's been off limits for so long so you'll see a lot of interest in exploring the situation on the ground. i think what the administration's announcement

will do -- the president'sya announcement will do, will enable that curiosity and enable businesses to start exploring cuba. i wanted to go through a couple of the provisions that have been announced so far that i think are of particular importance to the business community. the first is establishing licenses for travel. the fact that treasury will generally license travel will significantly expand the ability of americans to go to cuba and for businesses and entrepreneurs from the united states to start to get a feel for the cuban market. the second thing is enabling direct banking and credit card processing relationships. this is good for americans who want to go on the ground -- who want to go to cuba and travel use their credit card, but it's also good for businesses who will have an easier time receiving payment for goods, easier to protect your property and trademarks. the third provision that's generally important for u.s. businesses is permitting u.s. owned and controlled entitys to provide services and engage in financial transactions with cubans located in third countries.

this has been a gigantic point particularly for u.s. banks who would have to deny accounts to cuban nationals living in a country like spain. so i think there's also those provisions seem clear to me that they will be enact in the coming weeks and rules that treasury and commerce will put out, but i think there are other areas of the president's announcement in the white house fact sheet where we need to wait to see what's going to happen. there's a lack of clarity. so the first is what will the extend of enabling services be? travel service providing will be allowed to provide services to travelers going to cuba, but will orbitz be able to sell travel online, will the u.s. be able to deliver packages to support entrepreneurs in cuba? i don't think that's clear yet. there are some references that are a bit vague. one is exploring additional options for promoting the growth

of entrepreneurship in the private sector in cuba. that may or may not come in an initial round of regulations. my read of the president's authority is similar to bob's which is that he can use his licensing authority broadly. so one thing that i've been suggesting is that he could license imports into the united states of products made by cuban entrepreneurs. so you could license ebay to engage cubans on their platforms to sell things into the united states. i'm not sure that's going to be part of the initial regulations, but it does seem like the sort of thing that would be consistent with the president's announcement. so that's the short term. but i think the longer term, the enthusiasm and the curiosity that exists right now is going to be tempered both by the state of u.s. policy and the fact that sanctions still exist and are out there, but also by the reality on the ground in cuba. we talked a little about the limiting factors that sanctions will president until there's a full normalization of relations,

but i think the long-term opportunity depends on more than an end to sanctions. shutting off sanctions is not like shutting off a spigot. they'll be affected by first and foremost economic development in cuba. to the extent that cuba can purchase things from abroad and support investments on the ground in cuba, a trade investment will expand. the second thing is it will rely on the attitudes of the cuban government. if you're looking at trading with cuba, you're going to care about custom facilities, tarrifs, transparency, protecting individual property rights. cuba doesn't always score high on those metrics in part because they're ambivalent about their relationship with the global economy. having been there a couple times, my perception is they want a trickle and not a flood of foreign trade and they're

very wary of the united states. i think that's changing and there's a vibrancy in cuba. there are -- castro is trying to encourage entrepreneurship and is starting to engage internationally more, so we'll see where that goes. but i do think these will be limiting factors even when sanctions go away. i'll stop there. >> john, can you round us out here? >> i'll try not to be redundant. i apologize for my voice, a little laryngitis. i think many people listened and saw and read what the president announced and heard, saw and read what they wanted. they didn't necessarily listen to what he said or how he said it, nor did they listen to the cuban response. look at the optics.

president obama wore a dark suit, stood at a podium, spoke for 15 minutes what he wanted to do with the cuban people. president castro spoke for about three minutes sitting at a table wearing a military uniform. they still feel that they're under attack, and many of them still feel they're at war with us. cuba is only going to permit what it believes it can control. it's not a criticism, just a fact. one of what the challenges are going to be is dismissing the belief that somehow cuba is dubai with 11 million people that has so much money that it's flowing and they're waiting for the currents to push it north.

cuba develops its trade relationships not solely based on cost but also on politics. again, not a criticism. countries do that throughout the world. i'll give you a little history. from 1980 to 1992, foreign subsidiaries of u.s. companies including cargo engaged in trade with cuba about $5 billion worth. 1992, cuban democracy act stops that subsidiary trade but reauthorized healthcare products. 1996, todd allows for private settlements with u.s. companies, reauthorized food and ag sales. there have been very little healthcare product sales to cuba since 1992. why? in large measure it's because cuba would rather have a

political issue than it would healthcare products for its people. in addition, products are expensive in the united states and they can get products from other places and they can get it with financing. some years ago council worked out an agreement with the catholic church. their caritas. the agreement was that they would be able to provide for the third party verification, part of the cda says that healthcare products can't be used for torture or reexport, used in tourism, et cetera. they said they would be willing to do that. so from the business community standpoint, we thought that was a slam dunk. it took away an issue that had been disrupting exports. at the same time, it was able to solve a problem. cuban foreign ministry went mental. they said basically you've just destroyed our ability to use that as an issue. not saying they always want to

do that, but it's a component and it needs to be thought of here. from december of 2001 through november of last year, u.s. exporters, it's a total of about $5 billion, just a shade under $5 billion, and that's in cash, and the payment terms have been cash in advance as they required. and the cubans bought after tisra was signed into law. they didn't buy anything for a year. the u.s. business community and ag groups and others basically said we worked all this time and now you're saying you won't buy anything because you didn't get financing. well, we'll go focus on some other countries. then in december of 2001 they came back because of a hurricane and said we're going to make a one off purchase, just once, just to replenish products that we need that were damaged in the hurricane, wood and that. they didn't buy wood for a

couple years, but they began the process. over that time, there have been changes. the bush administration actually relaxed the payment terms. then later in its administration, because of abuse is s with travel to cuba, they went back and reversed it. now president obama is reversing it again. my point is that when folks want to focus on everything that we want to do down there, cuba also has to make some changes. cuba hasn't had to make a lot of changes because there have been countries that have been willing to support it. currently venezuela. so i would argue that right now the u.s. relationship with cuba is far less meaningful to cuba than is cuba's relationship with venezuela. venezuela has issues, and they've already decreased slightly, their subsidized oil

exports to cuba. that's going to create an impetus for cuba to make some changes that it doesn't want to make. it could result in a second what we call special period in cuba which took place after the ussr changed its relationship. so there's a lot going on that you need to review. financing is one of them. we've heard some discussions about that. cuba didn't stop buying from the united states because it couldn't get financing in tisra. as a matter of fact, u.s. companies, when tisra was being negotiated, the cuban government pushed some of the ag groups to push it and the business community said no because cuba has horrible credit and we don't want to be standing in line with everybody else trying to get our money.

so i, council president, was able to go around the world and say cuba was the safest export market in the world for u.s. companies, and it is. cuba has never been below 50th out of 223 export markets globally, the united states. that's impressive for a small country on a cash basis. those that are arguing that the embargo needs to be lifted legislatively i think are making a mistake because so much can be done through the executive branch. financing, cuba has been more focusing on re-establishing relationships with existing training partners, commercially and politically -- china russia, iran, mexico, spain, brazil. those countries in many cases have government-operated entities. cuba buys rice generally from vietnam. food one and two, which are

state-run entities. why do they do that? because vietnam gives them one and two and three years to pay for the rice. when they default, very few people know about it, and they prefer it that way. so it isn't all about what we want to do down there. it's what they want us to do down there and what they can afford to have us do down there. it was amazing after president obama's remarks, the same -- we saw the same after fidel castro stepped down, that people were running to see if they can get on a plane and go down there. they have a long way to go, but from our perspective, from the united states' perspective it's best to move slowly because focusing back on where we were in 1959, when it comes to cuba don't focus on anything five years back because that's basically what your reality is

going to be. your reality is going to be changing yearly. so looking way back to evaluate what may be in the future, i don't think we'll spend a lot of time doing that. more importantly is to look at what cuba is and look at it realistically. 11.2 million people with a small economy with a government that has horrible credit. the most important from a business perspective announcement that the president made was direct correspondent banking because right now you do have a triangle. cargill sends something to cuba, cubans will use a bank at another country and send it to u.s., direct correspondent banking, so that can take a day or two. that money go havana to chicago within several hours. it's more efficient, less expensive.

but here's the challenge. some years ago that was an idea that the bush administration was considering. council and some of the companies went down to the cubans and said this is something that would certainly be helpful. the cubans said here's our challenge. your government wants to change us. we understand that there are the laws and the regulations put into place after 9/11 basically requires any foreign bank that wants to do business with a u.s. bank to open its books to make sure that money laundering drugs, et cetera, terrorism. so the cubans said at that point, how is this beneficial to us to open our books to the government that wants basically to put us out of business. so this time around it's going to be interesting to see if the cubans look at this differently or if there are some ways around it.

the direct correspondent banking is very important. i will shut up now and go to questions. >> great. thank you, john. we're going to now move to q and a. we have a microphone that we're going to pass around and ask you to wait for that microphone to arrive to you, and then when you pose your question, if you could introduce yourself, your name and your affiliation, we would appreciate it and others in the room would appreciate it. if you could keep your questions brief, if you want to direct them to a particular panelist, please do so. if you just want it to be a jump ball for the panel, that's fine too. >> john, can i just interject because i feel like i want to just make a couple clarifying points here because john mentioned that those that are working in the embargo might be making a mistake. just as that context before you ask a question, moving slowly

would be quite painful for the cuban people, but not only that, that doesn't provide business the certainty that we need. quite frankly, if we move slowly as americans, we're just tieing one hand behind our back as we see investors landing in cuba from places in the european union, from brazil, from other places across the globe. so moving slowly is actually not quite the answer. then i do want to put some context around at least in our conversations with cuban officials what they're thinking. what they see in terms of the u.s. sanctions is that it's actually crippling their ability not only to get as much u.s. fdi. their estimates are that they need about $2 billion a year. in our conversations with the trade minister who has been quite forward leaning, he's actually indicated that their history is one of having been dependent on one country

whether it's the united states, whether it's russia and as john mentioned, venezuela. quite frankly, they don't want to be dependent on one country which is why they want the sanctions to end. they've estimated it at $2 billion. we've estimated it at $7 billion. so there is an imperative. i would take issue with the fact that cuba sees venezuela as its most important relationship. quite frankly, cuba sees cuba linking with the globe as its most important relationship. and last, i don't think we should be focusing on what people wore on december 17th but on what people said. the fact that the cuban government engaged with the united states in 18 months of dialogue is the action. when the u.s. business community met with the president in havana in may, he wore a business suit. >> thank you, devry. questions? right in the front here.

>> good morning. doug from omni capital group. john, the war mentality that you described which i agree with, i just spent ten days in cuba last week, i agree with that sense, does that live on beyond raul castro and fidel castro, or does that die when they go? >> i think we would like it to pass on as quickly as possible but there are a lot of generations that have been born under it and know only it. so i think that the process will not be swift, and i don't necessarily think we want it to be swift. i don't think we want a yeltsin-style transition that took place through ussr at the beginning.

but no one knows. there's a lot of love and hate. cubans have one of the highest awarenesses of u.s. brands in the world and one of the highest preferences for u.s. brands in the world. for u.s. companies launching into cuba comes with less cost than some other market places. that makes it attractive. and that's because the folks do have and the people of cuba, many of them have access. but we saw what no one expected with fidel. most of the modelling done in the u.s. government was fidel is speaking speaking, he drops dead or he is in his office and drops dead and people know, they don't know, but no one ever expected a

succession and then the transition from brother to brother. so i would don't expect that raul dies and it's a switch. it's going to be more of a wave. >> thank you. >> bill lange? >> good morning. bill lange with caterpillar. first, this is probably about a great program, great timing. particularly the fact that this is two days away from the big anniversary. some of the folks in here may recall that january 16th, 1998 17 years ago, that the usa engage coalition officially took the american business community over the line calling for a new policy toward cuba. took out a full-page ad in "the wall street journal." since then, there has in a secada-like policy. so let me just say while it

moves slow, there's a whole different frame of reference when it comes to cuba. here's my question, they have state-engaged during that entire 17-year period. the business community as related to industrial goods and consumer goods have not. you have trade missions planned, i know you have rumors talking commerce department going down in april, there's the council of americas meeting or the summit of the americas in panama in april, as well. what is planned one thing about when the american business gets excited about market. every other business community around the world gets excited by that same market. so my question is are we going move with vigor or are we going to take the secada-type approach

and have a different type of policy? jake, i guess my question is to you and what do you have planned? >> well, thank you, bill.jan -- bill. that was a great commercial for i didn't encourage that at all. that was all on its own.$ q yes, i mean, first of all, interests on the business community -- the broader business community as ebbed and flowed on what they think is possible. you saw a huge blip in interest in 2009 after president obama was elected and the chairman was trying to appeal the travel ban. at that point, it was like this room here. a lot of interest, a lot of enthusiasm because there was the potential for something significant to happen. everyone woke up. we were on the hill a lot. when that did not come to pass,

everyone, you know, went into hibernation again. you're seeing the flow right now because of the announcements. so what i think is important is for the regulations to come out for cuba to be re-examined as terrorism for congress to take up this question on the hill. you have that positive going toward that enables businesses to explore. we are going to do that. we've been talking to the commerce department. i don't know if i can talk about your trade commission. i know the community has something planned for march. there will be interest. you will see a drumbeat of support. we've been talking about making sure there is support moving forward with the addministration on the hill and in cuba, generally. >> can i say something?

a couple of times, it's been said this morning, go slow. i'm not sure what that means. it seems to be an attempt to contrast legislation lifting the embargo on the hill with regulatory activity. the president, the executive branch can go much further, much faster than congress is going to go on lifting the embargo. there is zero possibility the embargo is going to be lifted. it's not going to happen. not one of these bills is going to come out of a committee. let alone reach the floor. so, to the extent that i don't -- i feel it's almost an implication being made that those of us who favor regulatory action by the president, and i hypothesized a legacy project. but i think we're getting pushed off into side panels about

lifting the embargo on capitol hill right now. >> help me. i'm an optimist. i believe optimism keeps us going on the right path. why won't a bill come out of committee? >> i leave it to the room to judge whether a bill is going to come out of a republican controlled house and senate. >> let me follow up on that. my reading of the tea leaves is, as your conclusion, that congress is of two views some strongly in favor of lifting some strongly opposed to the president, the steps he's already taken. and, if you had to bet, i think you would bet where you've placed your money, which is unlikely that there will be legislative action on this to either roll back what the president is doing or to advance policy further. my question to you is, in your initial remarks, you suggested

that as a legal matter, the president has full, legal discretion to lift the embargo and take very expansive steps. my question is do you believe that politically, congress would not act if the president next month or at some point in his tenure took steps far beyond what he's already announced? >> i think there's a contradiction within congress. the majority of members of the house and senate don't privately support the embargo. they haven't for some years. so -- but that doesn't mean that they're going to affirmatively support legislation to lift the embargo. as far as legislative interference with anything president obama may do in terms

of cuba, i think it unlikely. also for presidential candidates. jeb bush and marco rubio have said they support the embargo. i don't know that is the most attractive position to take into a presidential campaign. i noticed both christie and paul were slow to react to what the president did. when they did, paul endorsed it and christie said essentially nothing. so this tension between america as a forward-looking country america that promotes trade globally exists in congress and i think that will prevent direct interference with any presidential initiative on congress. but i think the simple reality including pac funding on capital hill makes that a long-term project.

i think they are a necessary conversation. if the president can forge ahead using the historical prerogatives of the presidents to establish some type of bilateral trade with cuba, you can see the embargo as a tidying up operation on capitol hill. a recognition of an existing reality that the embargo is more holes than she's at that point -- then cheese. a repeal becomes a much easier thing to accomplish. >> we will move back here. we are scheduled to go to 10:30? i think we are on track to get to all of the questions. >> thank you very much.

really great panel. my question for the panel, a little bit of an historical perspective. i wonder if anyone has any perspective comparing it to wi hen the trade was happening with vietnam. is it just two different -- too different? >> others may have views, but one perspective, in vietnam, there was a protracted negotiation in terms of trade

how claims would be sorted out. you know -- vietnam was not a member of the wto. cuba obviously is. it is not a complete apples to apples comparison. vietnam and other instances suggest there will be a multi-pronged negotiation to be sorted out including claims. >> in 1995, that is only normalized relations. -- that is when we normalized relations. well we can say is we can draw parallels between what happened and what will happen in cuba. we went in with zero investment and now if you fast forward to

where we are today we import u.s. products into the vietnamese market. over the course of time, through our investments, we have built our 70th school on the ground in vietnam. not only the power of trade, but the power of u.s. investment and the ability of businesses to engage in commercial diplomacy. cuba is already a wto member. we would have to ensure that we would gain the same access in cuba as the other wto members. >> there was not an active

pro-embargo vietnamese lobby unlike cuba. the senators that own the issue of vietnam brought an emotional dimension to their desire for a rapprochement with vietnam. it works the other way on capitol hill. they bring a hearts and minds commitment to the embargo that tends to be deferred to somewhat by their colleagues on the hill. many dynamics that make vietnam and cuba sufficiently different. the mechanics of the diplomatic negotiated rapprochement will be similar to the dynamic on capitol hill.

on licensing policy changes? we have issues with the minimalist content, if the spanish carrier happens to be a plane going in and out of cuba, that becomes a problem for boeing. with everything that is changing with a high level policy, how soon we expect licenses granted or changes in the regulations on the specific issues? >> the administration has announced they expect new regulations in the next few weeks. time will tell. we will see a loosening of sanctions. >> i do not know what they will

say beyond what is on the white house fact sheet. what will happen as result of the policy changes that will free up resources to at least speed the process along. even if they do require a license, you will have more resources rather than focusing on travel. >> when it was signed into law in 1992, there was nothing in the law that said individuals could make sales calls to cuba. all of that was basically put

into regulations over time as companies went to the white house and said, we want to go in to sales -- go on a sales strip. president obama is going to do this expansively. we know that. a lot of the nuance is going to come from lawyers and companies calling up and saying, you did not address this. can we get it addressed? >> there will be draft rags that come out -- regs that come out. they will not get it entirely right the first time. >> right behind you.

>> the administration said they will authorize u.s. depository institutions to have cuban peso accounts, but not cuban banks to have dollar accounts. will that be good enough? >> it does not address our financing issue at all. >> the problems -- a journalist called me the other day from the financial times. had been talking with european banks and american banks on how they view the financial provisions which are limited. she said the european banks seem more interested in trying to expand their presence in cuba than the u.s. banks.

we have a great problem right now that u.s. banks don't want to handle anything to do with cuba including the account here to accept visa payments. it is a tremendously complicated problem. john kerry has been instructed to do a review and report in six months and everyone has concluded that he recommend cuba be taken off the list. the bank secrecy act, the patriot act even dodd-frank, sarbanes-oxley, make american banks risk-averse when it comes to countries under any kind of sanctions at all. i think we need more leadership from the administration, treasury, the comptroller of the

currency, and among other things, scaling back of what has become almost a predatory instinct of the u.s. government to hit financial institutions for gigantic penalties. the treasury department will go after the foreign bank for millions of dollars in penalties . the french bank was it with a $10 billion settlement with the u.s. government. it requires a change of culture and some of the regulatory agencies and an attempt to deconstruct this thicket of laws and regulations that circumscribe u.s. banking services.

>> over here on the right. my right. >> thank you. i wonder if i could get the panel to put themselves in the position -- report on another issue. we talked about sanctions, these sorts of things. i wonder if they were -- from a european trade association japanese canadian, how do they see that market? is it comparable to any market we might be familiar with? it is a pretty new place. how might they see it differently? as we peel off the various sanctions, we are likely to confront the same kinds of questions they have.

i wonder if there might be some general comments to understand what this animal is we are talking about. >> any takers? >> i will do it. canada might be most relevant. foreigners in cuba has had a complicated history. canadian companies have had their property excel treated -- expo treated. some of the challenges they face were articulated on the panel earlier on. the attitude and the behavior of the cuban government matters. with canada, there has been a huge focus on tourism. canadian tourists going to cuba and services being provided and then you see a focus on basic industries.

a report in the press recently with asian economies, they sell cars buses, transportation equipment. some relationships in biotech and pharmaceutical sectors between cuba and china. everything is still really nascent. someone asked about, how behind the curb -- how behind the curve are u.s. companies? i do not think the race has even started yet. i think the growth in trade and investment will come as the cuban economy grows, as cuban attitudes start to change. >> john, not to put you on the spot, but do you thing -- but do

you have anything to add on the experience of other companies that have been able to do with -- deal with cuba? >> we worked with members of the organization and we have had government trade groups. most countries, i will use an example of farm equipment. the u.s. -- you have india and japan and others. over time, they have watched what u.s. companies have done and what -- how u.s. companies have positioned themselves. no one should think that u.s. companies don't know what is happening in cuba. many companies back in the

1990's -- there was a belief in the clinton administration that there was going to be substantial movement. companies developed substantial teams, some of the largest companies in the united states, teams of executives would get together to develop strategies. some companies had containers sitting in warehouses in miami ready to go. over time, it waned as cuba would do something politically to make it untenable to do something. 2002, many embassies from other countries in cuba panicked because they saw that fidel castro was walking around and everyone was thinking and every company that went there got an order. cuba saw a great benefit from it.

you had many of the of the sea staff saying, -- embassy staff saying, this is the end. i would agree that because you have been there a long time, if you are a government entity, you have some staying power. private entities, companies that they curried favor with from europe and asked for investment got investment, build things, developed businesses. they then put those people in jail and put the companies out of business, took the business over. cuba is still going through a crisis of identity. they are trying to figure out what the definition of successes, what the definition of wealth is. how wealthy do we want people to become before we say it is too wealthy? it all goes into the psyche.

they will tell you when you go down there, we will buy everything, give us everything. but who will pay for it? these foreign countries know that. it is all about the money. the communications element to president obama's announcement, i missed right will castro, fidel castro, anybody down there saying they want everyone to have ipads smartphones gmail cisco servers and routers and the rest of it. if you are a cuban and someone from the u.s. comes with hardware, at some point you will say, how do we know it is not compromised before it arrives or that it can be compromised once a gets here?

you people do not have the greatest reputation when it comes to securing your hardware. these are real -- these are realistic business decisions that cuba is likely to continue to look at china and russia and brazil and other places where they have political interest, where the governments will finance. they would prefer to deal with government entities. most of their existing trading partners were owed a lot of money. cuba has $14 billion in foreign debt. there have -- they are a horrible credit risk. the countries in their know that. -- in there know that.

>> a lot will depend on how realistic the u.s. government is. there is a schizophrenia in cuba. they are a communist country. raul castro reaffirms that. but they are opening to the world more and more. the administration should realize in the first instant that will go through state agency. there will not be a home depot established in cuba. some flexibility start with those agencies. the u.s. government should keep pressing. the business sector has been held subordinate to many other claims when it comes to cuba. if you can aggressively, firmly,

and over time, use this opening on november 17 to expand opportunities in cuba, i think they are there. cuba is changing. begin with the reality of what it is and build on that. >> where's the microphone? we have a member of the press yhere. >> [inaudible] let's assume everything goes well and the u.s. companies are all over cuba. the doj has not been effective -- what is the environment down there in terms of anticorruption risk for companies that to get

involved? >> the question was regarding fepa and anti-bribery and other laws as u.s. companies move into cuba. when that is permissible, what will the risk scenario b? -- scenario be? >> i can only recite what i have read. there is an anticorruption crackdown in cuba that has been going on for a year or two. the only hard currency sector of the economy, the anticorruption initiative has landed very

heavily on some english and canadian companies. their executives have been imprisoned. i do not know where that is going. the greater risk at the moment is being pulled into a cuban anticorruption drive rather than having the justice department knocking on your door. >> i'm interested in knowing what do you think will happen -- the foreign claims settlement commission, who is going to pay them? do you have to pay them before receiving commercial relationships with cuba? >> robert might have a view of this.

>> the claims with an interest component, john might correct me, i think they are close to $7 billion now. cuba does not have the hard currency to remotely come close to paying those. the claims are top-heavy. the top 25 companies represent two thirds of the total value of the awards. if some kind of disposition of those claims could be made, the rest could be worked out over time. how this will be resolved, i think the companies should approach this innovatively and flexibly and consider using their claims against cuba as the basis for negotiated reentry into the cuban economy.

perhaps the way debt equity swap -- perhaps through a debt equity swap. it is going to be complicated and knows who are going to come out of it best will be those who help themselves. companies that sit back and wait for the government to knock on their door, they will fare quite thoroughly. -- quite poorly. >> we don't know how that will resolve itself. i do feel quite confident in saying what won't happen is that the claim holders will be willing to turn the page and forget about the claims. i do not think that will happen. there will have to be some resolution. the u.s. government espoused those claims, certified those

claims, they are worth more than $7 billion with interest. it will ultimately be a political question. i think it will require resolution. there will be some payment on those claims. >> good morning. before i ask my question, a very brief comment. there was a comment made that many in the republican congress are motivated by the cuban community in florida. frankly, the anti-castro community does very little fundraising for the vast majority of republican members of the house or senate. the rank-and-file republicans look to certain members of the florida delegation who they

personally like and respect and consider to be experts on latin american policy. i think is important we understand that. much of the business that has been done has been done from state owned company to state owned company. what has been the experience of our canadian and european friends? what has been their experience where they privately have provided credit? >> i cannot speak specifically to any particular european company. what we are seeing in the food and agriculture community is the europeans are being successful. they have been successful. like any business, you don't sell without getting paid.

certainly, because we have seen the uptick in sales, over time, they are working out those financing arrangements that are beneficial. >> to comment, it gives on bipartisan basis -- i watched over time half the black congressional congress vote pro-embargo. debbie wasserman schultz is a recipient of some of that pac money. i did not mean to suggest that republican opposition is solely because of funding. one of bill was brought to lift

the travel ban, it could not get out of the democratic controlled committee in the democrat controlled house. that is a testament to just how effective the pro-embargo lobby has been on capitol hill. >> on most european companies have had collection issues with cuba. many of those companies have had government entities within their respective countries guarantee provide credit guarantees. almost in all cases that has to be rolled over renegotiated, or written off. >> time for one last question. where in the back. >> -- way in the back. >> i just want to go back to the

credit purchases issue and some of the priorities of the new u.s.-cuba coalition for agriculture. a lot of talk about how some of these changes don't have to be made legislatively, but i was under the impression that allowing credit purchases might be one of those changes. i wanted to know what authority does the executive branch have to make any change to credit payments with regard to cuba and what is the agriculture coalition going to do with regard to congress? will there be goals they are working on with members of congress? a public campaign? >> we would agree with you on the credit side.