Economists from the University of Central Florida are predicting a business boom amongst small businesses in South Florida as a result of the United States government easing trade and travel restrictions with Cuba. The Obama Administration recently authorized trade with Cuba allowing U.S. private companies to provide building materials for private homes, goods for entrepreneurs, and farm equipment for small farmers.
The Cuban embargo was inaugurated by a Kennedy administration executive order in 1960 as a response to the confiscation of American property in Cuba under the newly installed Castro regime. The current incarnation of the embargo – codified primarily in the Helms-Burton Act – aims at producing free markets and representative democracy in Cuba through economic sanctions, travel restrictions, and international legal penalties.
Under new regulations, limited U.S. companies will now be allowed to export cell phones, televisions, computers, recording devices, software and other technical equipment to Cuba. Read on to learn more about which industries will be impacted as a result of the new Cuba travel and trade rules.
Tourism Industry Growth
The tourism industry between both nations will continue to grow. The U.S. government is granting travel licenses to families, journalists, educational and religious activities, athletic competitions, humanitarian projects, and limited trade related activities. Travel company Orbitz is happy about the new direction the U.S. is taking with Cuba. The company has been a strong advocate for travel between the two nations and stated that they desire for “all Americans to have the opportunity to travel to Cuba.”
“There are numerous economic, social and cultural benefits that will flow from free and open access, and our customers are eager to visit Cuba,” the company said.
Most tourists would likely travel to South Florida to travel to and from Cuba. This will increase tourism business growth in South Florida.
Under the new regulations, American banks will be allowed to finance small business and agriculture in Cuba. Insurance companies will also benefit as well by providing health, life, and travel insurance policies.
U.S. citizens will be allowed to remit up to $8,000 a year to people in Cuba. Further, visitors will be able to bring up to $400 of souvenirs which includes $100 cigars and alcohol.
Federal Budget Cuts
Congress appropriates millions of dollars to federal agencies to keep illicit Cuban goods out of the U.S. Ten government agencies are responsible for enforcing different provisions of the embargo. With the easing of the embargo on Cuba, government funds can be spent on other key issues.
The Obama Administration is currently developing a civil aviation agreement with Cuba that will permit regular commercial, non-charter flights. Researchers are predicting that trade and travel restrictions will continue to ease as economic prosperity increases throughout the region.