Potential Transportation Impacts of Expanded U.S.-Cuba Trade, Final Report
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Potential Transportation Impacts of Expanded U.S.-Cuba Trade, Final Report

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    Before 1960, the United States and Cuba were major trading partners. At that time, Cuba was the seventh largest export market for U.S. products. In the years since then, U.S. trade with Cuba has been highly regulated. Exports have been mostly prohibited, with some exceptions for agricultural products, medical supplies, and telecommunication devices and services. Establishment of a more open economic relationship with Cuba offers the potential to increase U.S.-Cuba trade, to foster greater productivity in the Cuban economy, to increase demand for U.S. imports among Cuban consumers, and to allow for the resumption of U.S. imports from Cuba. Against this background, this study aimed to identify the potential Texas trade and transportation impacts of a more open U.S.-Cuba relationship. Specifically, the study aimed to understand the impact of an open U.S.-Cuba relationship on Texas’s seaports and the infrastructure linking the ports to the regions of the state. In 2014, Cuba’s imports comprised 79 percent ($7.3 billion) nonagricultural products and 21 percent agricultural products ($2 billion). Cuba’s major trading partners for agricultural, fish, and forestry products are the European Union (specifically France, Spain, and Germany), Brazil, the United States, Argentina, and Canada. Crude petroleum products at $3.2 billion accounted for 44 percent of nonagricultural imports in 2014. Most of Cuba’s energy imports are supplied by Venezuela. Finally, Cuba imported only $2.5 billion in services in 2013. This is largely attributable to Cuba’s strong tourism and medical services sectors. In 2014, U.S. exports to Cuba consisted primarily of agricultural products (i.e., $285 million, or 95 percent). Poultry comprised the majority of the value of those exports, at 52 percent. Other major agricultural U.S. exports to Cuba included soybean meal, soybeans, and corn. In 2015, U.S. exports of nonagricultural goods reached 18 percent of total U.S. exports to Cuba, including chemical and medical goods, as well insecticides and herbicides. Trade restrictions have impacted the U.S. trade relationship with Cuba. The United States could, however, be a very cost-competitive supplier to Cuba because of the close proximity between the United States and Cuba, resulting in lower transportation costs and faster delivery times. Moreover, U.S. agricultural exports are very cost competitive because of U.S. production efficiencies. The removal of restrictions on U.S. trade with Cuba is therefore expected to result in increased exports of U.S. and Texas agricultural products to Cuba in the short term and some exports of manufacturing products in the short term, with more potential over the long term.
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