If you were to guess who brought in a load of artisanal charcoal earlier this year from Cuba—the first commercial Cuban import to the U.S. in more than 50 years—you probably wouldn’t have picked Scott Gilbert. A D.C.-based lawyer who mostly works on insurance, mass tort and bankruptcy cases, Gilbert doesn’t have a deep personal history with Cuba, or experience importing products into the U.S. And until a few years ago, he certainly didn’t know much about charcoal.
But Gilbert did represent Alan Gross, the USAID contractor, when Gross was imprisoned in Havana, and during that time built some personal relationships with important American and Cuban officials. When Gross was released in 2014 as part of Obama’s historic opening to Havana, Gilbert saw an opportunity to help crack open Cuba’s state-controlled economy. “Since that day,” he said, “I’ve been working and my colleagues have been working to try to promote engagement between our countries and economically empower the Cuban people.”
About three years later, on January 24 of this year, two containers of artisanal charcoal arrived aboard a ship to the Port Everglades in Florida. It was just a test run; the charcoal was valued at just $17,000 and would be sold online. But most of that money would flow back to Cuban co-operatives, not to the government. Symbolically, it meant a lot. “Nobody has done what we’ve done, which is to say: You want to economically empower people, why don’t we import from private co-ops into the U.S.?” Gilbert said. “They need to export. They need to grow their private businesses to have a basis to become independent and viable.”
Gilbert’s charcoal was the first direct import of Cuban goods since Obama’s historic opening to the island, and its small scale and quirky backstory make it a clear example of just how challenging the “opening” of the U.S.-Cuba relationship has been. While Washington has largely focused on the large increases in tourism and the success of tourism-focused companies like Airbnb and Hilton, which are now legally allowed to operate there, the Obama administration also made numerous small regulatory changes that focused on chipping away at Cuba’s monopolistic state, and promoting independent Cuban businesses.
What’s unclear is if they’ll survive Donald Trump’s new Cuba policy, scheduled to be officially unveiled later Friday. The Trump administration intends to cut off transactions between Americans and companies controlled or run by the Cuban government, according to White House officials, while continuing to allow commerce with independent Cuban businesses. In theory, this would continue to allow Americans to make small deals like the charcoal purchase, helping build up a grassroots Cuban economy without feeding money to the Castro regime. But in practice, those deals are much more complicated. And as Trump takes a harder line, experts worry that Cuba will slam the door as well—and it could be many more years before the next Cuban export arrives on U.S. shores.
The door technically opened in January 2015, when the Treasury Department’s Office of Foreign Assets Control issued regulations that would allow increased travel to Cuba and commerce between the countries. The changes—spelled out in 12 pages of technical, bureaucratic language in the Federal Register—significantly expanded the acceptable reasons for Americans to travel to the island and modified rules on everything from international athletic events in Cuba to bringing back rum and cigars in luggage. Buried on page 11, OFAC added a new rule for commerce with Cuba that allowed the “import of certain goods and services produced by independent Cuban entrepreneurs.”
About a month later, the State Department released the list specifying what those goods and services were. Most of Cuba’s main export products—sugar, tobacco, petroleum, liquor, and nickel—were disallowed. In fact, all agricultural and animal products were blocked, along with liquors, tobacco and textiles. To Gilbert, it was a disappointing list but it didn’t discourage him. He just had to find the right product.
Marabu is an invasive weed that exists all around Cuba and is cultivated by Cuban agricultural co-operatives. It’s so tough that it can’t be cut with a machete and has taken over broad swaths of farmland. But when burned, it produces one of the best artisanal charcoals in the world, often used in pizza and bread ovens. Best of all, it was authorized for import based on the State Department’s list, so Gilbert could import it into the United States.
But learning about marabu and actually importing it were two different things. Gilbert had to find a retailer to sell it in the United States and work with the shipping company to get it brought to Port Everglades. Importantly, he also had to get the sign off from CubaExport, the state-run company that controls Cuban exports. Technically, the co-operatives would sell the marabu to a local packager which sells to CubaExport. CubaExport would then export the charcoal and sell it to a subsidiary of Gilbert’s law firm. He wasn’t allowed to import goods from the Cuban government, but the U.S. considered CubaExport a middleman in this case, so the deal was legal.
The process was slow and frustrating; it’s a truism for anyone doing business in Cuba that it always requires patience. After decades without selling anything to the U.S., Cubans remain distrustful of U.S. businesses. “They’re a little bit nervous, a little bit suspicious and want to take it slow and be careful,” said Sarah Stephens, a principal at the Cuba Strategy Group who has worked with U.S. business trying to get a foothold in Cuba. “And on top of that, it’s a very bureaucratic system.”
Eventually, Gilbert received approval from all entities involved and the shipment of 40 tons of marabu charcoal arrived in the U.S. in January. For the importation of most goods, that timeline—literally years for a pile of wood—would be laughable. But for this particular pile of wood, it was a triumph. “We’re talking about two to three years in the context of a relationship that has been quite abysmal for 60,” he said.
Technically speaking, marabu wasn’t the first Cuban-made product to reach U.S. shores. Last year, Nestle imported 18 tons of green Cuban coffee beans to the United States. The company took out a full page ad in the New York Times and advertised the coffee as “Hencho en Cuba”—“Made in Cuba.” But the company hadn’t brought them directly over; the beans went through a London affiliate and then were shipped to the U.S. (Coffee beans weren’t on the State Department’s original list of authorized imports, but were added in April, 2016, along with textiles.) Gilbert said he has also sought to import refined coffee—different than just the beans—and is seeking confirmation from the government that this is allowed under the current regulations; he’s been awaiting a response from OFAC for over a year.
The regulatory changes have offered other opportunities as well. In a follow-up regulation issued by OFAC last October, the agency allowed Americans to help build Cuban infrastructure, like roads or water management facilities, and allowed U.S. businesses to export agricultural machinery to the island. Both are critical for Cuba’s private sector—especially the agricultural industry—to grow. So far, the uptake on both has been slow but hopes remain high.
The new regulation also allowed joint medical research projects with Cuba, which has a strong biotech sector. Already, a Buffalo-based cancer center received FDA approval to conduct clinical trials on a lung cancer vaccine and doctors are hoping that a treatment for diabetes could receive approval as well.
For all those changes, though, the embargo still has a stranglehold on the relationship. Under a little-known exemption, U.S. companies have long been allowed to sell food and medical supplies to Cuba. But exports have barely budged in the past two years, and remain well below their 2007 high when the U.S. sent $710 million of products to Cuba. Last year, it was just $232 million.
To many farmers, that’s been a disappointment. Patrick Wallesen, the president of WestStar Food, a Texas agricultural company, said that he was previously selling about $3 million a year of beans to Cuba but hasn’t sold any in the last four years. “I thought we would see more business and they would start to try and normalize things a little more,” he said. The problem is that modern exports rely on credit—and under the embargo, farmers still can’t offer credit to Cuba, putting American farmers at a competitive disadvantage to farmers elsewhere who can. The Obama administration tweaked that rule but had little flexibility under the law to do much else. As long as the law on credit remains, experts said, agricultural sales will be weak.
“There’s horror stories about people having frozen chicken stuck on a ship that’s ready to leave for Cuba and there’s a problem with the wire transfer because it’s a holiday in Europe or something like that,” said Collin Laverty, the president of Cuba Educational Travel. “The embargo is very real.”
Unlike Obama, Trump doesn’t want to end the embargo; in fact, he wants to strengthen it. On Friday, he intends to announce a rollback of Obama’s policies on travel to Cuba. He also would prohibit American consumers and businesses from transacting with any company controlled or run by Grupo de Administracion Empresarial S.A., or GAESA, the business arm of the Cuban military. That will effectively blacklist large swaths of the Cuban economy. For big hotel chains or the airlines, that guarantees a loss of business, if not outright revocation of licenses granted by the Obama administration.
For Gilbert’s desire to import charcoal from Cuba, the implications are less clear. The White House says Americans will still be allowed to spend money at independent private-sector shops, and Sen. Marco Rubio, who worked with the Trump administration to develop the policies, told POLITICO’s Marc Caputo, “It puts these private businesses at an advantage, because Americans can only spend money with them, not the military monopoly.” But U.S. importers technically transact with CubaExport, the state-run company, even though the product is sourced from Cuban co-ops. Whether such transactions would be allowed under the new policy is unclear.
It’s also unclear whether Trump’s harsh rhetoric and policy changes could chill any developing trust between the two countries. Even under Obama, the process was slow and bureaucratic, a result of decades of mistrust. With a renewed hostility from Washington towards Havana and a possible reduction in business travel to the island, any burgeoning relationships may collapse.
Gilbert hopes that isn’t the case. He wants approval from the U.S. government to import different products, from honey to avocadoes, and hopefully lay a path for major U.S. businesses to follow. It’s only through such commerce, he believes, that the Cuban people can build a stronger economy and more free society.
“Assuming it is still permissible to import charcoal, I’m confident you will see a long-term contract executed in the next month and see the charcoal appearing on certain grocery store shelves,” he said. “My hope is it’s just the beginning of much more."