Friday, December 2, 2016

White House Pushing Cuba on Deals for GE, Google (WSJ)

White House Pushing Cuba on Deals for GE, Google

Three cruise lines also expected to announce new service to Cuba

The White House is putting pressure on Cuba to firm up deals with General Electric and Google before the start of the Donald Trump administration. WSJ's Felicia Schwartz explains on Lunch Break with Tanya Rivero. Photo: Reuters

WASHINGTON— General Electric Co. and Alphabet Inc.'s Google unit are among firms U.S. officials believe will secure agreements to operate in Cuba as the Obama administration presses Havana to complete pending deals before Donald Trump takes office, according to people familiar with the discussions.

In addition, three American cruise lines are expected to announce deals to start service to Cuba, including Norwegian Cruise Line Holdings Ltd.Royal Caribbean Cruises Ltd. and Pearl Seas Cruises.

The new business agreements are expected to be announced over the next few weeks, those familiar with the discussions said.

For the White House, which ramped up an effort before the election to prod Havana, the deals are aimed at cementing President Barack Obama's policy of advancing U.S.-Cuba relations.

White House officials are unsure how Mr. Trump, the president-elect, will approach Mr. Obama's Cuba policy. He has said he would reverse the effort to build relations, and this week wrote on Twitter that "if Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate the deal."

While there is no formal deal between the U.S. and Cuba that can be undone, there has been a broad effort to expand economic, trade and cultural ties between the two countries since Mr. Obama and Cuban President Raúl Castro announced in December 2014 that they would re-establish diplomatic relations.

Asked about the possible agreement, a GE spokesman said: "We continue to talk to Cuba and we're in the middle of negotiations."

A Norwegian Cruise Line spokeswoman, Vanessa Picariello, said the firm is "in continued talks with appropriate authorities in Cuba on behalf of all three of its brands: Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises."

She added: "We remain optimistic that we will receive approval for one or more of our brands and be able to offer our guests Caribbean cruises including Cuba in the near future."

Cynthia Martinez, a spokeswoman for Royal Caribbean., said, "We've expressed our belief that the market holds promise for the cruise industry, and remain interested in exploring its potential."

Charles B. Robertson, Pearl Seas Cruises' director of marketing, said: "We are very excited and optimistic about the prospect of going to Cuba and we have a number of trips planned in 2017 that we hope to be able to run."

Officials from Google didn't respond to requests for comment.

A number of companies have been granted licenses by the Obama administration to do business in Cuba, but are awaiting approval by Havana. The move at the White House to accelerate the process for U.S. companies holding U.S. licenses became a renewed focus late this summer.

Officials reviewed deals pending before the Cuban government and brought in a U.S. government official, Angela Mariana Freyre, formerly senior vice president and general counsel of the U.S. Export-Import Bank, to focus solely on this issue.

Ms. Freyre was dispatched to Havana shortly after the presidential election to meet with officials about the White House's desire for deals awaiting Cuban government action to move forward.

Google and General Electric made limited forays into Cuba this year. Google in March opened a technology center in the Havana studio of one of Cuba's most famous artists. Cubans at the site can access the internet at speeds 70 times faster than those available to the Cuban public. Google has been trying to offer other services to try to improve internet access on the island.

GE in March signaled its intent to provide power, aviation and medical equipment to the Cuban government by signing a series of memorandums of understanding with the Cuban government. 

Another American firm, Caterpillar, signed a distribution deal in February with Puerto Rican-based Rimco to begin selling its products in Cuba, once trade restrictions are eased.

The move to normalize relations has prompted a flurry of deals. Starwood Hotels and Resorts Worldwide Inc., now owned by Marriott International Inc.,signed a deal to run three hotels in Cubaearlier this year. The properties are still government owned but will be run by Starwood. The company began operating a Four Points Sheraton in Havana in June, with the others to follow. 

Meanwhile, American carriers Verizon Wireless, AT&T Inc., Sprint Corp. and T-Mobile US Inc. have all reached deals to offer service in Cuba.

U.S. airlines resumed commercial flights to Cuba earlier this year. This week, eight airlines, including American Airlines Inc. and JetBlue Airways, began commercial service to Havana. By the end of 2016, U.S. airlines are expected to conduct more than 500 round-trip flights to Cuba, according to the U.S. Department of Transportation.

Ben Rhodes, Mr. Obama's adviser who led the effort to re-establish relations with Cuba, traveled to Havana this week. Tom Donohue, the head of the U.S. Chamber of Commerce, also was supposed to travel to Havana this week but canceled the trip following the death of Fidel Castro on Friday.

Write to Carol E. Lee at carol.lee@wsj.com and Felicia Schwartz at Felicia.Schwartz@wsj.com



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