Ports preparing for potential trade with Cuba

As some of the Cold War restrictions placed on trade with Cuba are lifted, ports in the Southeast are already preparing for trade to open up between the U.S. and Havana. 

The U.S. and Cuba announced this week that the two nations would re-establish relations after more than 50 years of animosity, following 18 months of secret negotiations and the release of American prisoner held in Cuba Alan Gross, among others. The Obama administration noted it intends to loosen financial and trade restrictions in addition to easing limits on travel to Cuba. Exports to Havana will soon become easier and new products authorized for trade. 

James Lyons, CEO at the Alabama State Port Authority, told the Journal of Commerce that, while an end to the trade embargo against Cuba won't happen right away, lifting restrictions on cash-up-front financing through third party firms will make trade easier. 

President Barack Obama has stated that as the two countries begin to normalize relations, trade between Cuba and the U.S. will become a reality for the first time in over a half-century, according to Voice of America. Barbara Kotschwar and Gary Hufbauer estimated that U.S. exports to Cuba could eventually reach $5.9 billion per year. The pair of analysts at the Petersen Institute for International Economics added that exports to the U.S. from Cuba could hit $6.7 billion. 

In addition, the analysts predicted that with the easing of U.S. restrictions against Havana, other nations could increase their direct investments in Cuba from from less than $1 billion today to as much as $17 billion. 

Ports are preparing for the lifting of restrictions against trade with Cuba
Before the U.S. placed an embargo on Cuba, the nation to the southeast was an important market for ports in New Orleans, Mobile, Tampa and Miami, according to the Journal of Commerce. And now, ports in that region are preparing for relations with Havana to open up again. 

"Tampa's emerging container business positions the port as a natural gateway to Cuba when ties are re-established, particularly in view of our historical ties and short transit time of 15 hours," Paul Anderson, the port's CEO, told the Journal of Commerce. "This will be driven by cargo demand and carrier decisions to serve the market. Moreover, the port would anticipate opportunities for bulk cargoes, general cargoes and cruise activity."

Other ports in Florida are also preparing for the emergence of Cuba as a trade partner. Amy Miller, port director of the Port of Pensacola, explained to the Pensacola News Journal that the opening of a trade route to Cuba would be a boon to the entire Gulf of Mexico region. Jerry Maygarden, the Greater Pensacola Chamber president and CEO, is also optimistic about the benefits that could arise from the normalization of relations with Havana. 

"I don't think our embargo strategy has worked at all," Maygarden told the publication. "All we've done is isolated the U.S. from an 11 million-person marketplace that is doing trade with the rest of the world."

However, according to Lenny Feldman, a Miami-based customs and international trade attorney, Cuba could also become a source of competition to ports in the Southeast U.S. as well, WPLG Local 10, a local CNN affiliate, reported. The Panama Canal expansion will allow larger ships to pass through Central America, straight to Cuba, a well-located potential transportation hub for container vessels. 

Even so, South Florida is likely to benefit from the opening up of Cuba in the long-run. One big area of exports could be telecommunications, according to Feldman. The Cuban government is allowing more people to connect online, which means the country's population could be open to devices such as smart phones and computers. 

"It is tremendous because right now about 5 percent of the Cuban population is on the internet so it is a big question of accessibility," he said. "So it seems as though what we are looking at is to really target this new open regime to help individuals."