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Brazil banking on Cuba trade

Brazil — the region's emerging economic superpower — is planning to invest hundreds of millions in Cuba to help develop the island's pharmaceutical, oil, and shipping industries, a Brazilian trade minister announced this week during a visit to Havana. While the investment projects will be viewed by some as a political gesture by left-leaning Brazilian president Luiz Inacio Lula da Silva, they may prove to be a smart bet on Cuba's future trade — especially with the United States.

According to Reuters, Brazilian Industry and Trade Minister Miguel Jorge said it would give Cuba up to $300 million in credit to rebuild the shipping port of Mariel, best known as the departure point for a massive Cuban exodus to the United States in 1980. The port lies 30 miles west of Havana, and the Brazilian government has already approved $110 million in funding to build highways, rail lines, and other shipping-related infrastructure, with the work to be led by a Brazilian firm, Jorge said. The port project is expected to cost up to $2 billion, but will be critical in moving industrial facilities and shipping operations away from Havana's badly-polluted harbor, an eyesore for tourism.

Cuba also wants Mariel to serve as the future hub for its offshore oil industry. Brazilian oil giant Petrobras is planning to open an office in Havana on Tuesday, and it's one of many foreign oil companies that have signed deals with the Castro government to drill for crude in Cuba's portion of the Gulf of Mexico. Jorge said the company was completing seismic studies on its undersea bloc, but did not confirm when drilling would begin.

U.S. trade sanctions generally bar American companies from doing business with Cuba, but when that policy changes — whether next year or in 20 years — both the port and its oil operations are likely to be of major strategic and commercial interest to the United States, with the island a mere 90 miles away.

A Brazilian pharmacuetical company, ESM, also said it would partner with Cuba to help market an anti-cancer drug and a gel used to treat human papillomavirus (HPV), both patented in Cuba, according to Mexico's La Jornada.

http://www.globalpost.com/notebook/cuba/090710/brazil-banking-cuba-trade