Germany and Cuba on Thursday agreed to open a trade office in Havana that would help German businesses seeking to invest in the communist-led island and possibly increase the current 225 million euros ($244.22 million) in annual bilateral trade.
German Vice Chancellor Sigmar Gabriel signed a memorandum of understanding with Cuban Foreign Trade Minister Rodrigo Malmierca at the opening of a business forum, the first event on Gabriel's two-day schedule.
German business leaders have said annual German-Cuban trade could quadruple to 1 billion euros in the coming years as Cuba seeks foreign investment. Also, Havana's improved relations with the United States could generate trade with third countries.
Gabriel said German companies want long-term investment in Cuba under transparent rules. "We want to put the political and economical relations to Cuba on a new basis," he said. "We want a new partnership on an eye-to-eye level."
German industrial gases supplier Stefan Messer GmbH has been in joint ventures with the Cuban government since 2001, largely through the gas-bottling Oxicuba S.A., but German companies generally have little presence in Cuba.
Under a foreign investment law approved in 2014, Cuba is offering tax breaks and other incentives, such as allowing foreign businesses to operate wholly owned companies in a special development zone surrounding the port of Mariel.
Gabriel was due to visit Oxicuba and Mariel during his trip and meet with Vice President Miguel Diaz-Canel and other Cabinet ministers.
Since Cuba and the United States reached detente a little over a year ago, companies from around the world have taken a closer look at Cuba. Some are interested in gaining a foothold ahead of an anticipated lifting of U.S. economic sanctions. The comprehensive U.S. trade embargo also complicates foreign business transactions in Cuba.
Trade possibilities were further advanced last month when Cuba reached a debt-restructuring agreement with 14 wealthy nations of the Paris Club that forgave $8.5 billion of Cuba's defaulted $11.1 billion debt.
Though Germany was not among the creditors because it had already restructured Cuban debt, the deal was an important step in Cuba's efforts to rejoin the international financial community and could lead to more Western credits and investment.
Germany has traditionally lagged behind other European countries such as Spain, the Netherlands and Italy in trade with Cuba. Cuban data ranked Germany as its 10th-largest trading partner in 2014.