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Cuba doesn’t buy much of what Tampa offers

Cuba doesn’t buy much of what Tampa offers
At most, one small cargo ship a year goes to Cuba, says Port Tampa
executive VP Raul Alfonso. And no shipping companies are planning
regular trips.
By Paul Guzzo | Tribune Staff
Published: January 10, 2015 | Updated: January 10, 2015 at 10:37 AM

TAMPA — Ever since President Barack Obama announced expanded trade with
Communist Cuba, business interests in Tampa — a Cuban trading partner
for more than a century before the U.S. embargo — have been on high alert.

Leaders of Port Tampa Bay are fond of noting that it’s closer in
nautical miles to Havana than any major U.S. port.

But as details emerge of Obama’s policy for normalizing relations with
Cuba, it’s becoming clear that Tampa can offer few of the exports that
can soon be shipped to the island nation — and that you can’t trade in
history.

“We heard this same thing in 2000 — Tampa was going to earn money from
Cuban trade,” said Mike Mauricio, president of Florida Produce in Tampa,
which has exported agricultural products to Cuba. “And look how that
turned out.”

Tampa has done little trade with Cuba since 2000, the year when the 1962
embargo was first relaxed to allow the sale of agricultural supplies and
medical equipment to Cuba.

Mauricio is traveling to Cuba next week in hope of reinvigorating his
business there, but he hasn’t sold anything to Cuba in three years.

No one else here has either, as far as he knows.

At most, one small cargo ship a year travels from Port Tampa to Cuba,
said Raul Alfonso, the port’s executive vice president. And no shipping
companies are planning regular trips to Cuba.

“Times are changing, and other cities are lining up to take advantage of
the new opportunities,” Mauricio said. “But we are sitting on the
sidelines. We talk a good game but it takes more than talk.”

Shipments from at least 12 U.S. ports to Cuba since 2001 have totaled
just $5 billion, according to the U.S.-Cuba Trade and Economic Council —
the value of all exports from Port Tampa in 2012 alone.

?????

Alfonso said his port is certainly open to discussing trade with any other.

Through CSX rail lines, goods from around the country could be moved to
Tampa for shipment from the port to Cuba, he noted.

But much of the trade with Cuba now goes through ports that are situated
near the places where the goods are grown or made, he added.

The Port of New Orleans is one.

From January through October 2014, 23,000 tons of poultry went to Cuba
from the Port of New Orleans, said its president Gary LaGrange, and all
of it came from Louisiana or the surrounding states.

The Port of New Orleans exported $36.12 million in goods to Cuba from
January through October 2014, according to WorldCity Inc., a Coral
Gables-based media company focused on the impact of globalization on
local economies.

Alabama is a top three poultry producing state and the Alabama State
Port Authority sends around 4,000 tons of frozen poultry to Cuba every
four to six weeks, said Jimmy Lyons, its director.

In Virginia, most of the $40 million in agricultural products sold to
Cuba in 2013 went through the state’s own Port Norfolk, said Todd
Haymore, the state’s secretary of agriculture and forestry.

The top U.S. exports to Cuba are frozen chicken, soybean oil cake,
soybeans, corn and mixed animal feeds, according to the U.S.-Cuba Trade
and Economic Council.

Among those, only mixed animal feed is made in bulk in the Tampa Bay
area, primarily through the Minnesota-based Mosaic Co., one of the
world’s largest suppliers of phosphate and potash for fertilizer.

?????

Mosaic already can sell Cuba some of the 11 million tons of animal feed
and fertilizers made here each year, and did do business there in the
early 2000s, said spokesman Bob Nelson.

Another potential export from Tampa is medical equipment, said Bob
Rohrlack, CEO of the Greater Tampa Chamber of Commerce, who made two
fact-finding trips to Cuba and will return for a third this year.

“Tampa Bay is a huge center for medical device manufacturing,” Rohrlack
said.

So far, it isn’t a big market: From January through October last year,
Cuba purchased just $892,181 worth of medical equipment from the U.S.,
according to the U.S.-Cuba Trade and Economic Council.

It remains unclear when the Obama administration will ease the trade
embargo and what specific products are involved.

“It is simple supply and demand,” said John Parke Wright IV, descendant
of Tampa’s pioneer Lykes family, who made their fortune selling cattle
to Cuba and running steamships carrying cargo there. “Tampa needs to
find what supply Cuba demands.”

Wright, who lives in Naples, sells cattle semen to Cuba. Through that
business, he has developed relationships with people in Alimport, the
Cuban government agency that handles all imports.

Wright wants to see his native Tampa benefit from trade with Cuba but is
struggling to figure a way.

There is no bulk manufacturing here of construction supplies or
equipment or of agricultural equipment, nor does it produce lumber, all
vital as Cuba grows.

Perhaps, he suggested, if modern equipment from the U.S. helps the Cuban
agricultural industry grow, farmers will need more of Mosaic’s animal
feed and fertilizer.

“We will continue to watch the development of the relationship between
the U.S. and Cuba before seriously considering doing any additional
business with the island in the future,” Mosaic spokesman Nelson said.
“We do believe better farming practices including proper animal
nutrition, would benefit the people of Cuba.”

?????

Or, Wright said, if major companies like Home Depot or John Deere choose
to do business with Cuba, they might turn to Tampa for storage and shipping.

This would require regularly scheduled cargo ships though.

“The chicken or the egg theory,” he said. “Although I think this could
be done together.”

Since Obama’s Dec. 17 announcement, Florida’s largest law firm,
Miami-based Akerman, has received calls from entrepreneurs around the
nation interested in doing business with Cuba, said Augusto Maxwell,
chairman of the firm’s Cuba practice.

Some are from Tampa, he said, though he would not elaborate.

Telecommunications equipment — the Tampa Bay area’s top export at $2.5
billion in 2013 — is among the goods Obama would allow to be sold to
Cuba. That creates opportunities, the chamber’s Rohrlack said, and
something to pitch on his next visit to Cuba.

Unless the new policies are in place then, though, such discussion would
be illegal, he said.

Still, the Florida community best poised to cash in on these products is
Doral in Miami-Dade County — home to Latin America headquarters for
several of the world’s largest cellphone distributors as well as other
technology products, said Ken Roberts, founder of WorldCity, an
international media and event company based in Miami.

One of those companies is Tech Data, headquartered in Clearwater.

What’s more, South Florida has the largest population of Cuban Americans
in the U.S. and thus, the most residents with business ties to Cuba.

?????

Proximity to the production of goods might give a port a leg up on
shipping to Cuba, but some top shipping areas don’t have this advantage.

Exports last year from Port Everglades in Fort Lauderdale totaled around
$43 million, according to WorldCity.

“I spent 22 years at Port Everglades and I can assure you Broward County
does not make one thing Cuba currently buys but the port has a weekly
container ship that sails to Havana,” said Carlos Buqueras, executive
director of Port Manatee.

Buqueras, too, hopes his port can benefit from expanded trade with Cuba.

Jacksonville, on the other hand — shipping $22 million in goods to Cuba
last year — is close to states that make products sent to Cuba.

Mauricio with Tampa’s Florida Shipping suggested Tampa might become a
hub for exporters — offering connections rather than goods. He purchased
agricultural products in California, for example, and shipped them to
Cuba from ports outside the state — moving them there by rail or truck.

Still, more businesses in Tampa would step up as middle men if Port
Tampa Bay had regular cargo ship service to Cuba.

“I can’t speak for everyone but I personally like to keep an eye on my
products,” Mauricio said. “I want to see them loaded and shipped out.”

And if Tampa had the potential to emerge as a hub for trade, he added,
it probably would have happened already.

“I think politics play a part,” he said. “People are scared to do
business with Cuba. I never had one problem with the Cuban people though.”

?????

Another challenge in trade with Cuba is that the island nation might not
have much business to do, said John Kavulich, senior policy adviser with
the U.S.-Cuba Trade and Economic Council.

Exports to Cuba from the U.S. continue to dwindle — from $710 million in
2008 to $348 million in 2013, he said. That’s a trend likely to continue
once 2014 numbers are available. From January through October, the total
was $253 million.

Kavulich blames the drop, in large part, on U.S. law that requires Cuba
to pay for items before they leave a U.S. port. No purchases on credit
are allowed.

Obama’s new initiatives partially address this problem: Cuba can now
wait until the cargo arrives to pay.

Other nations do extend credit to Cuba so the government trades with them.

How Cuba buys the American goods soon to be available may also help
determine how they are shipped, said Miami attorney Maxwell.

Now, all U.S. agriculture products must be channeled through the Cuban
government’s Alimport agency.

Will a Cuban who needs, say, a new toilet for a restaurant be able to go
online and order one from Home Depot or must the order be placed through
a government agency like Alimport?

The answer could spell the difference between shipping one toilet or a
lot of toilets.

“A lot needs to be worked out,” said exporter Wright of Naples. “In the
meantime, I’ll guess we’ll continue to see things done in the same
manner as they have been done for years.”

Under the status quo, Cuban citizens have a relative or friend in the
U.S. buy a toilet and bring it to the island when they visit.

“The more things change,” Wright said, “the more they stay the same.

pguzzo@tampatrib.com

Source: Cuba doesn’t buy much of what Tampa offers | TBO.com and The
Tampa Tribune –
http://tbo.com/news/politics/tampa-could-offer-trade-with-cuba-20150110/

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