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Cuba-US Update

Spring shoots in US-Cuba trade?

The ongoing thaw in relations between the United States and Cuba has led to a modest level of new air and sea passenger traffic between the two countries. But the all-important US economic embargo is still in place.

The historic visit to Cuba by Barack and Michelle Obama from 20 to 22 March this year was a key event in diplomatic terms. But the US economic embargo on Cuba, which only Congress can rescind, is still in place.

Both President Obama and his Cuban opposite number, Raúl Castro, want the embargo lifted, and Mr Obama even went so far as to declare during his visit that “the embargo is going to end”, although he could not say when.

While sea trade between the two countries has yet to be normalized, there are indications that passenger traffic is moving beyond the stage of charter visits and into more ‘mainstream’ activity.

‘Money’ magazine reported recently that flights, ferries and cruise packages between the US and Cuba were “popping up left and right”. They include:

Flights from New York

JetBlue will commence flights from New York JFK to Havana on 3 July. These are being sold as charter flights through Cuba Travel Services although they are operated by JetBlue. Sun Country Airlines began flying the New York to Havana route in March; while ABC Charters already uses JetBlue aircraft for flights to Cuba from Tampa and Fort Lauderdale.

Flights from Baltimore-Washington

Cuba specialist Island Travels & Tour, which already runs charter flights to Cuba from Miami and Tampa, is expanding with flights from Orlando in July and flights from Baltimore-Washington (BWI) in the fall.

Small-ship cruise in Cuba

Starting in late 2015, International Expeditions, based in Helena, Alabama, began operating small-ship cruises using the 48-passenger, three-masted motor sailer ‘Panorama’. The 10-day itinerary embraces the Cuban ports of Cienfuegos, Cayo Largo, Maria La Gorda and Havana.

Ferry services from Florida

Four companies have received licenses from the US government to operate ferries between Florida and Cuba, according to a recent report in the South Florida ‘Sun Sentinel’. They include Havana Ferry Partners, which could launch 200-passenger ferries from Key West to Havana within weeks and later introduce overnight trips from Miami, Fort Lauderdale and perhaps Tampa using vessels of 300 to 500 passengers.

Opportunity knocks

Both the US and Cuba – but especially the US – can expect to gain from new trade opportunities.

  • Cuba, just 90 miles from Florida, imports about 80 per cent of its food, making it a natural market for US agricultural products.
  • The estimated cost to US exporters of maintaining the embargo is US$ 1.2 billion per year, according to the US International Trade Commission.
  • US exports of merchandise to Cuba could be worth up to US$ 4.3 billion a year if the embargo were lifted, according to a study by the Peterson Institute for International Economics.
  • Opening trade with Cuba could create 6,000 new jobs in the US, an analysis by Texas A&M University has found.
  • Normalized trade with Cuba would bring a surge of new business to US ports and airports, particularly in south-eastern states.