Cuba boosts trade ties with Russia as U.S. disengages

Cuba boosts trade ties with Russia as U.S. disengagesHAVANA, Dec. 20th (REUTERS) Boxy Russian-built Lada automobiles still rattle around Cuba, growing more decrepit by the year, a reminder of vanished Soviet patronage for the  island.

But next month, more than 300 shiny new Ladas are slated to roll onto Havana’s potholed streets, the first in more than a decade. Their manufacturer Avtovaz, Russia’s biggest carmaker, says it hopes to ramp up exports, thanks to financing from Russian government development bank VEB.

Flush with state funding, Avtovaz and other Russian companies are once again increasing sales to the Caribbean isle. It is part of a broader move by Moscow to renew commercial, military and political ties just as the U.S. government is retreating from Cuba under Republican President Donald Trump.

Russian exports to Cuba jumped 81 percent on the year to $225 million in the January-September period, official Russian data shows. That is just a quarter of the exports of Cuba’s chief merchandise trading partner, China, but growing fast.

Russian state oil major Rosneft in May resumed fuel shipments to Cuba for the first time this century. The company’s head met with Cuban President Raul Castro in Havana Saturday, the latest sign the two countries are readying a major energy agreement. The nations in the past have discussed increased deliveries of Russian oil to the island and development of Cuba’s offshore oil fields.

That would be a major assist for Cuba amid slumping shipments of cheap fuel from its troubled socialist ally Venezuela.

Last month, private Russian company Sinara delivered the first of 75 locomotives worth $190 million ordered by Cuba in 2016. Russia’s largest truck maker KAMAZ has also stepped up exports to Cuba.

Negotiations for rail lines and other infrastructure are in the works.

“We can call this period a renaissance,” Aleksandr Bogatyr, Russia’s trade representative in Cuba, said in an interview. He forecast bilateral trade could grow to $350 million to $400 million this year, one of its highest levels in nearly two decades, up from $248 million in 2016.

Russia’s Cuba offensive comes as Trump has halted efforts by his Democratic predecessor Barack Obama to normalize U.S.-Cuba ties and ease the decades-old U.S. trade embargo.

In June, Trump ordered tighter travel and commercial restrictions again, disappointing U.S. businesses that had hoped to capitalize on the detente. In September, his administration slashed U.S. Embassy staffing in Cuba.

Moscow is seizing on that rollback as a way to undermine U.S. influence in its own backyard, some foreign policy experts say.

“Russia sees it as a moment to further its own relationship with Cuba,” said Jason Marczak, Director at the Adrienne Arsht Latin America Center.

“The more the Russian footprint increase in Cuba, the more that will reinforce hardened anti-U.S. attitudes and shut out U.S. businesses from eventually doing greater business in Cuba.”