Direct marketers are mulling a proposal announced by President Clinton this week that would relax the U.S. embargo against Cuba and bring the two nations closer together, as well as open direct mail service between the two.
Currently, mail delivery is possible, but it takes months since the mail has to be sent through Mexico before it reaches Cuba. Other measures in the proposal include selling food and agricultural supplies to Cuba for the first time, expanding direct flights between the two countries and allowing U.S. residents — not just family members — to send payments of up to $1,200 a year to Cubans.
Even though mail delivery to Cuba will become less cumbersome, there are issues companies must think about before launching direct marketing to Cubans.
“There is still an embargo on people doing business in and with Cuba,” said Charles Prescott, vice president of international business development and government affairs at the Direct Marketing Association.
Indeed, experts said the administration's proposal has nothing to do with the economic embargo anyway, so the United States still can't do business in Cuba.
“All that was done was some peripheral changes at the edge that will allow more people-to-people contact, where families in the U.S., for example, can send more money back to their families in Cuba,” said Riordan Roett, director of the Western Hemisphere Program at the School for Advanced International Studies, Johns Hopkins University, Washington. “The embargo has not moved. The same rules apply that did a week ago for American business.”
However, some direct marketers see these relaxed rules as a signal that Cuba may be a new market to focus on sooner rather than later.
“Cuba is an absolute gold mine,” said Howard Cordover, president of International Catalog Consultants, Birmingham, AL, a parcel shipper that focuses on the Latin American and Caribbean markets. “The opportunities are unbelievable. But, as long as [Fidel] Castro is in power, the money is gong to be indirectly diverted to him, so people are going to be very hesitant at this point. People are just waiting for him to go.”
Even if U.S. marketers are allowed to start doing business in Cuba, it will take some time before Cuba has secure mechanisms in place to accept payments back to the United States or the mechanisms to ship parcels expeditiously.
“If people can eventually send catalogs to Cuba, then there is the problem of having to ship merchandise there,” Cordover said. “And unless the transportation infrastructure is changed, there could be some immediate problems.”
Clinton's measure builds on the Cuba Democracy Act of 1992, which tightened the U.S. embargo but called for increased exchanges between Cubans and Americans.