President Obama's announcement yesterday that the U.S. will make the first major move in 54 years to open trade and diplomatic relations with Cuba is being received as as early Christmas present by the cruise, ferry, cargo vessel and port industries. For years, these sectors have been salivating for the chance to expand their businesses to a market just 90 miles from Florida, but has been off-limits since a U.S. trade embargo was imposed in 1960.
Many ports, notably New Orleans, Tampa, Fla., Pascagoula, Miss., Pensacola, Fla., Miami and Gulfport, Miss., have been positioning themselves for the new business, sending trade delegations to Cuba, doing economic analyses and urging their congressmen to lift the embargo.
Ferries see opportunities to create links to Cuba from southern Florida. Cruise lines could add a new port of call to their Western Caribbean itineraries, cargo vessels see a chance to move more commodities, and ports want to capture an export trade in U.S. farm products and materials that will be in demand in Cuba to rebuild the country's sagging infrastructure, according to an analysis by IHT, an economic forecasting firm.
Cuba has been planning as well. In January, a new, state-of-the-art port opened at Mariel, along the Gulf of Mexico and facing the U.S., that was, ironically the point of departure for 125,000 Cubans who fled by boat to Florida in the 1980s. Now it is being touted as a super port that will someday trade directly with America.
With widening of the Panama Canal almost complete, Cuba is hoping to attract some of those large Post-Panamax ships with its deep-draft port (60 feet), and establish itself as a transshipment hub due to its close proximity to the U.S. coast. Plans call for Mariel to house logistics facilities for offshore oil exploration and development by 2022.
But let's not get ahead of ourselves. A lot still needs to occur, both in Cuba and the U.S., for the trade embargo to be lifted. Obama has called for the opening of a U.S. embassy in Havana and the easing of travel and trade restrictions, with exports opened up for "certain building materials, goods used by private-sector Cuban entrepreneurs and agricultural equipment for small farmers." In addition, the ban on U.S. port calls by vessels that have visited Cuba within the prior six months is also being relaxed. The new policy will "allow foreign vessels to enter the U.S. after engaging in certain humanitarian trade with Cuba."
But Obama can not lift the embargo by executive order, only Congress can do that. And here in lies the rub. Republicans, who will control both houses of Congress come January, and some Democrats, oppose normalizing relations with Cuba and lifting the embargo. These influential lawmakers include Sen. Marco Rubio, R-Fla., soon-to-be Senate Majority Leader Sen. Mitch McConnell, R-Ky., House Speaker John Boehner, R-Ohio, and Sen. Robert Menendez, D-N.J. Both Rubio and Menendez are Cuban-American. Boehner said that Obama's new policy "is no new course, only another in a long line of mindless concessions to a dictatorship that brutalizes its people and schemes with our enemies."
Early press reports indicate that bipartisan resistance will make quick congressional action to end the embargo unlikely. Another complication is that there's a stipulation in the law that says the embargo will remain in place as long as a Castro is in power.
So lifting the embargo and opening the kinds of opportunities that the maritime industry envisions could be years away. It will take time to build a supportive political base for the change among Cuban-American voters, and for the U.S. business industry to make a convincing case to Congress of how it will help the U.S. economy and its workforce. But there may be a quicker way: things could move a lot faster should Cuban President Raul Castro step down.
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