Saturday, January 31, 2015

Could Houston be the U.S. hub of trade with Cuba?

Could Houston be the U.S. hub of trade with Cuba?
Yes, say experts: Houston exports things that Cuba needs
By Olivia P. Tallet January 30, 2015 Updated: January 30, 2015 3:02pm

Could Houston become the major trading hub between the U.S. and Cuba?
Experts say that if Washington finally lifts the embargo that restricts
trade between the two countries, the city would have definite advantages
over competitors: Put simply, Houston exports things that are in demand
on the island.

President Obama has said that he would like to eliminate the Cuban
embargo, and talks between the two countries began last week in Havana.
Lifting the trade ban would require approval by Congress.

At first glance, Florida, not Houston, seems the more natural major hub:
That state is not only close to the island, but it's where most Cuban
exiles live. And definitely, says Ricky Kunz, the Port of Houston's
managing director of trade development, Florida will have an edge over
Texas when it comes to cruises to the Caribbean islands.

But otherwise, he says, "there is an important difference that puts
Houston at an advantage over Florida: We have the industry to support
what Cuba needs. Florida does not."

Cuba critically needs infrastructure, Kunz says. And Houston could
provide goods ranging from building materials to drainage and water
supply systems, as well as services for the gas and oil industry.

The Port of Houston could also link Cuba to the middle and western
United States. Agriculture states such as Illinois, Iowa, Indiana and
Nebraska are much closer to Houston than to Florida, so shipping through
Houston would be cheaper.

Currently, the Helms-Burton Act penalizes any ship sailing from the U.S.
that stops at a Cuban port. Only one U.S. company, Crowley Marathon of
Florida, has a transport license to ship to Cuba, says Parr Rosson, of
the Texas A&M department of agricultural economics and a boardmember of
the Texas-Cuba Trade Alliance.

But even without that special license, Rosson says, the Port of Houston
and other Texas ports have exported products to Cuba for a decade -- in
particular, grains, soybean meal, corn and frozen chicken, as well as
rice, cotton and processed foods.

A report from Texas A&M already lists Cuba as the twelfth largest
agricultural trading partner of the U.S. in the Western hemisphere.

If the embargo is lifted, Houston wouldn't just ship exports to Cuba,
says Steven R. Selsberg, a partner in commercial litigation firm Sidley
Austin LLP, which represents several Latin American firm. There would be
imports too: The U.S. needs metals such as nickel, and Cuba has the
world's second largest nickel reserve.

Cuba, too, seems to be preparing for greater trade. The Port of
Houston's Kunz travels frequently to Havana, and he hopes soon to
explore opportunities at the new commercial port of Mariel, built 30
miles from Havana. The island government has described that port, built
as a collaboration between Cuba and Brazil, as Cuba's new international
trade hub.

"The question isn't what products we [could] trade with Cuba," Kunz
says, "but rather what we cannot!"

Source: Could Houston be the U.S. hub of trade with Cuba? - Houston
Chronicle -

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