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Sunday, Aug 19, 2018
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Warmer relations with U.S. mean new ways to export to Cuba

More Cubans living in the United States are making it back to the island to visit relatives, bringing with them love, family photos — and the occasional chainsaw or flat-screen television.

Travel has loosened up more than trade since the U.S. imposed an embargo on Cuba five decades ago, so visitors assume the role of pack mules, hauling along small mountains of sought-after goods from America on charter planes.

This bloat of luggage headed toward departing flights at airports in Tampa, Miami and Orlando has emerged as a symbol of the unusual relationship between the U.S. and Cuba. But as relations improve under the Obama administration, the mountain soon will start to shrink.

“The average American will notice the difference in the airports and luggage,” said Antonio Martinez II, a New York attorney specializing in Latin America relations. “Seeing things like a dishwasher going to Cuba on a plane will decrease or at least not be the norm.”

The reason: There will be other ways to bring such cargo to Cuba under new U.S. policies announced Sept. 18, with more changes expected in the coming weeks or months.

Today, direct shipping options to Cuba for individuals are limited to taking items on charter planes with them. Only licensed exporters use the cargo ships sanctioned by the U.S. government.

But under the new policies, the U.S. will allow cruise ships, ferries and privately owned sea vessels to travel to Cuba and carry authorized goods as part of their baggage.

It is now up to Cuba to reciprocate on a general or case-by-case basis.

In addition, direct mail to Cuba — cut off in 1963 after the embargo was imposed — is expected to start by the end of the year. No official announcement has been made yet, so mail from the U.S. to Cuba still must pass through a third nation first.

Meanwhile, the parade of products continues through the passenger terminals of Cuba-bound flights.

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On a recent Thursday morning at Tampa International Airport, the 63 passengers arriving on one charter flight from Havana filled just one cargo trailer with their checked baggage, largely small duffel bags and suitcases.

Later that day, the 89 passengers taking the same plane to Havana needed four trailers for their luggage. Goods that made their way to the cargo hold included a chainsaw, microwave, shower curtain and bike, as well as items stuffed into bags and beneath layers of plastic wrap that weighed up to 70 pounds.

There is little you won’t see loaded onto charter planes bound for Cuba, said Tom Popper, president of New York-based Insight Cuba, which has been taking American tour groups to Cuba since 2000.

“TVs, strollers, garbage cans, car parts, cables, toilets — anything we take for granted in the U.S.,” Popper said.

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Some of the goods already are available in Cuba, said Johannes Werner, editor of Cuba Standard, an online publication based out of Sarasota that follows Cuban business news. But they come at a high price through a government-owned store with limited supplies or competition.

“Sometimes buying in the U.S. and taking them back on a plane is more affordable,” Werner said.

Charter company Cuba Travel Services, operating the Thursday flights from Tampa, charges $20 for each piece of luggage — plus $2 for every pound over 44 pounds of total luggage. That includes carry-on.

The company also charges $3 a pound for boxes or baggage deemed to be an irregular size.

It is not yet clear what it will cost to take luggage on a ferry or cruise or to mail it.

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Still, Popper said those who want their friends and family in Cuba to enjoy products purchased in America may prefer bringing the goods with them on boats and planes rather than using the post office.

“There is a security in that you are actually delivering it to the home,” Popper said. “There is always a fear when shipping things abroad that it may not make it there.

“There is also tremendous satisfaction in bringing a giant flat screen to their mom in Cuba and seeing her face when they set it up and turn it on. To make your mom so happy is as good as it gets.”

Still, with more options for delivering goods, expect passenger planes to carry less of them, said Peter Quinter of Miami, head of the international trade-law group for Orlando-based GrayRobinson.

And Quinter predicts that when these new opportunities become reality, more Cubans will visit Florida with shopping lists and send shopping lists to friends and relatives here.

“It’s already the market of Latin America. People from all over Latin America look to Florida for what they need,” Quinter said. “So have Cubans, but on a limited scale. Now, we may finally add Cuba to that mix on a grand scale.”

The changing U.S. policies may also usher in a day when Cubans can shop for American-made products in their own country, said John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council.

One new policy already allows for American companies to have a physical presence in Cuba as long as their business falls into one of the categories allowed by the U.S. government.

These include agriculture, health care, communication devices, and home improvement and construction supplies.

A physical presence could include retail outlets or distribution warehouses.

That means Cuba might see stores operated by companies like Home Depot, Verizon, Sysco and Grainger, Kavulich said.

“It all depends on how broadly the Commerce and the Treasury departments look at this,” he said. “What we know is the president has said since January to these departments to find ways to say yes rather than no when companies come with license applications.”

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What’s more, Cubans will have access to more cash for making purchases thanks to another of the policy changes announced Sept. 18, removing limits on remittances that can be sent from the U.S. to Cuba.

“This is all staggering,” Kavulich said. “But it also puts immeasurable pressure on Cuba.”

The Cuban government has not reciprocated with corresponding policies of its own for U.S. business interests. It has yet to approve a U.S. ferry, for instance, or announce whether it will allow U.S. corporations to set up shop there.

And there is no guarantee Cuba will act soon. Rather, its government could use the prospect of U.S. businesses and products flooding the market as a bargaining chip to win favorable deals with other nations, some already in business there.

Cuba already has taken this approach with trade, Kavulich said.

Even as relations between the two countries return to normal, there was a decrease of 40 percent in food and agricultural exports from the U.S. to Cuba for the first six months of 2015 compared with the same period the year before.

Cuba used the threat of turning to the U.S. in order to get better deals from other nations, said Kavulich.

Tend Tudo, Brazil’s version of Home Depot, is already in negotiations to open stores in Cuba and will likely be first to the market there, said Werner of Cuba Standard.

“Tend Tudo would be the first time Cubans have access to washing machines and power tools and whatever else is needed to start a business or renovate a home at more affordable prices,” Werner said. “That may be the first challenge to shipping stuff from the United States to Cuba.”

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Whatever happens with trade, travel already is increasing from the U.S. to Cuba.

Through August, the number of passengers flying to Cuba from Tampa International was 66,504, already eclipsing 2014’s total of 61,408.

Suzanne Carlson of Carlson Maritime Travel attributes this to the ease of travel since January, when the U.S. began issuing general licenses to travel to Cuba for 12 reasons. These include educational activities and support for the Cuban people.

“The mainstream perception previously was that it was totally illegal for U.S. citizens to travel to Cuba,” Carlson said.

In addition, the changes in U.S. policy announced Sept. 18 allow family members of the qualifying traveler to make the trip as well.

Another big bump in travel is likely once commercial airlines begin scheduled flights to Cuba. The industry is hoping to see this by December.

“The biggest change that you will notice is that Havana and other Cuban cities that you cannot book on aa.com today will become part of our network,” said Howard Kass, American Airlines vice president of regulatory affairs.

Kass predicts scheduled flights will take to the air by the “first half of 2016 if not sooner.”

Once this happened, he added, veterans of travel to Cuba can expect to see an improvement in luggage service.

Today, with travel limited to charter flights, passengers have to haul their own checked luggage back through security to the right gate if they are flying into an airport with service to Cuba. There is no baggage connection between charters and other carriers.

The transfer will be seamless, however, with commercial flights.

“It will be just like flying from Washington to anywhere else in the Caribbean,” Kass said. “I’ll change planes, walk down a few gates, get on the next airplane and go. Bags will transfer automatically.”

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