This week, United States Gov.Terry McAuliffe announced that the Virginia Port Authority has signed a Memorandum of Understanding, or MOU, with the Cuban National Port Authority.
"This agreement will enhance Virginia's trading relationship with Cuba and supports our efforts to build the new Virginia economy," Gov. McAuliffe said in the statement. "Virginia enjoys a uniquely productive economic relationship with Cuba, and this MOU will generate additional opportunities for economic and cultural exchange. As relations between our nations continue to normalize, this agreement will position Virginia as a leader in trade relations with Cuba now and in the future."
Secretary of Agriculture and Forestry Todd Haymore added that Virginia sold $25 million worth of exported agriculture shipments to Cuba in 2014, which is a perfect example of how the commercial trade and shipping opportunities afford by this agreement will be mutually beneficial.
In addition, Secretary of Transportation Aubrey Layne agreed that this decision will lead to an improved industry and stronger global economy.
Gov. McAuliffe indicated to Reuters that this "strategic alliance" has the power to grow trade, improve business operations and expand vessel operations between the two parties. Furthermore, the agreement will allow the port authorities to exchange data, market analyses and technological resources.
Trade restrictions impact exports
According to Reuters, in 2000 the U.S. enforced an embargo on agricultural exports to Cuba, which limited Virginia's sales with the Havana port.
In October 2015, Gov. McAuliffe and other representatives wrote a letter to Congress requesting the restrictions be lifted to allow bilateral trade, as well as "the financial, travel and other restrictions that impede normal commerce and trade between our nation and Cuba."
It was also noted in the MOU announcement that Gov. McAuliffe believes the amendment of these trade laws is necessary to maximize the benefits of an alliance between the countries.
"As Cuba and the United States normalize relationships, we'd like to see the Cuban companies establish Virginia as their distribution point for the United States," Port of Virginia Chief Sales Officer Thomas Capozzi said to Reuters.
Though a number of governors have visited Cuba since the U.S. agreed to increase efforts to stabilize relations, Gov. McAuliffe is the first to officially sign a cooperation agreement, the source added.
Global trade port terminal
Cuba recently began the Port of Mariel Special development project, located just outside of Havana, Reuters revealed. It is designed to facilitate trans-ship services, serving as a shipping and logistics hub along the Panama Canal that will manage approximately $1.3 million containers annually.
The Cuba Journal reported that the developments cost $957 million, $682 million of which was paid for by Brazil. The modern renovations include the building of a global terminal for container ships, a freight center and water supply and waste treatment.
The source also added that logistics enhancements were made to accommodate the installation of the updated terminal, including the development of railroad lines and streets.
And although the port provides economic advantages, as well as a free trade zone, it has not been successful in influencing international investments, which the Cuba Journal attributes to complications and legalities in ownership and labor regulations.