WorldCity Business Magazine

Power Player

by Mary Dempsey

South Florida closed last year with record trade, pushing so close to the $66 billion mark that it could almost touch it.

It was the first time that Miami trade had ever exceeded $60 billion. Along the way to $65.9 billion in imports and exports in 2005, Miami stood as the lone U.S. Customs district among the top 25 to post a surplus: nearly $2.2 billion. That’s a cool billion dollars more than in 2004.

South Florida ’s outstanding performance reflected an overall 12 percent jump in cargo in and out of the Miami Customs District, which encompasses airports and seaports in a swath running from Fort Pierce south to Key West.

The surplus stands in contrast to overall U.S. trade results in 2005. While the country posted $2.6 trillion in trade last year, its deficit grew to a record $767 billion, a quarter of which was due to a flood of imports from China.

WORLDCITY’S*analysis of trade data from U.S. Census Bureau shows that the Miami’s surplus was easily the largest among all Customs districts. Its closest competitor was Anchorage, which shipped out $1.6 billion more in goods than it took in.

However, the good showing was not enough to make Miami the 12th largest Customs district again. During 2004, South Florida slipped into the No. 13 spot behind Cleveland. It has not been able to return to the position it had held for years.

In Florida, the Tampa Customs District, which includes Tampa and Jacksonville, finished the year at No. 24, up two spots from a year earlier, after posting 30 percent growth in trade. The Tampa Customs District handled $29.4 billion in imports and exports last year. It ended 2005 with a $9 billion deficit.

Los Angeles remains the top Customs district in the country, with nearly $294 billlion in trade annually.

Much of South Florida’s gain came from a 31.7 percent jump in exports to Venezuela, including construction equipment and other machinery to power President Hugo Chvez’s populist initiatives

Overall, Miami exports were up 13.3 percent, led by growth in the value of shipments to each of the Custom district’s Top 10 trading partners, to total $34.1 billion. Imports, meanwhile, reached $31.8 billion up 15 percent from the year earlier.

South Florida shipped $4.5 billion in computers its top export commodity and computer parts last year. Computer sales worldwide have been on the rise. Cell phone and electronic equipment, both hot commodities globally, joined aircraft parts, motor vehicles and medical supplies and equipment as other products that appeared high on the export roster.

Imports, meanwhile, were dominated by non-crude petroleum products, to the tune of $3.2 billion dollars. Aircraft and apparel were other important imports.

On the imports side, shipments from China posted big gains, nipping at the heels of long-time trade leader Brazil. South Florida and Brazil registered $3.4 billion in imports in 2005, down 11.2 percent from a year earlier while imports from China topped $3.1 billion, up 32 percent.

Calculating both import and export traffic, Brazil was Miami’s most important trade partner; the two registered $9 billion in trade last year, an 1.2 percent increase from 2004. Miami’s $5.6 billion in exports to South America’s strongest economy reflected an 11.8 percent rise from 2004.

Manny Mencia, senior vice president of international trade at Enterprise Florida , the state’s public-private partnership to foster economic development, says the trade deficit with China South Florida only exported $179 million in goods to China in 2005 is troubling.

“They are buying very little,” he says. “Volume with China may become greater than Brazil, but the fact of the matter is the relationship with Brazil is more balanced.”

U.S. imports from China are growing at a fast clip. The cargo has so overwhelmed West Coast ports, some of them now working around the clock, that shipments have been diverted through the Panama Canal to ports like Miami.

China is South Florida’s seventh most important trade partner. It is the only Asian country and the only country outside the Americas that ranks in the Top 10 list.

“Based on the size of the Chinese market and because of gridlocks in the United States’West coast, it is very possible that China could surpass Brazil as [South Florida’s] No.1 total trade partner,” Mencia predicts.

For now, however, Venezuela holds the No. 2 post a distinction it won in 2005 after pushing the Dominican Republic down a spot in the ranking of Miami’s most important trade partners. It is the first time since WORLD CITY*began tracking trade numbers in 1998 that Venezuela has placed so high in the ranking.

South Florida ’s $4.1 billion in overall trade with the Dominican Republic reflected growth of just 1.8 percent. That Caribbean commerce traditionally is fairly evenly split between South Florida exports of goods used in apparel production and the import of finished clothing from the Dominican Republic. In 2005, South Florida exports to the Caribbean nation were up 5.5 percent, to total $2.2 billion, while Miami-area imports to the Dominican Republic fell 2.1 percent to $1.9 billion.

Not only did that nearly flat overall growth between South Florida and the Dominican Republic let Venezuela jump ahead on the list of trade partners, but it also left now-No. 4 Colombia, with $3.9 billion in trade, right behind the Dominican Republic, with the potential to move up next year.

Free trade agreements, a renewed tourism industry in the Caribbean which relies on exports from the United States and a global construction boom, including the reconstruction required after the violent 2005 hurricane season in the United States and Caribbean, also began to affect trade figures.

South Florida’s $2 billion in trade with Chile a 23 percent increase over 2004 comes in the wake of a free-trade pact with the United States in 2004. It turned the South American nation and important fish- and copper-producing country into the ninth-most important trade partner for the Miami Customs District.

Chile displaced El Salvador, which now sits in the No. 10 position with $1.9 billion in trade, down 1 percent from a year earlier.

Once the Central American Free Trade Agreement is implemented, likely later this year, El Salvador and other Central American countries, as well as the Dominican Republic, which is also included in the agreement, could see improvement in their trade volumes with Miami .

Among European countries, the United Kingdom posted the greatest amount of trade with Miami: nearly $1.5 billion, a decline of just more than 1 percent compared to a year earlier. The biggest change among Miami’s European trade partners was posted by Spain. Commerce with Spain dropped nearly 31 percent, to end the year at $717 million.

Northern Exposure

Canada , the United States’ most important trade partner, also posted a remarkable 74.4 percent increase in trade with South Florida, much of it behind a jump in Miami imports of aircraft and jet parts. Miami and Canada exchanged $355 million in goods last year.

That marked the largest percentage increase by any of Miami’s top trade partners. The Netherlands posted 73 percent growth, but that mostly reflected that European country’s position as a transshipment point for products from all over Europe.

Because imports are credited to the Customs district where they enter the United States, not their final destination, most Canadian imports are logged by Detroit, Cleveland, Buffalo and Ogdensburg, New York . Canada is only Miami’s 31st most-important trade partner.

However, that ranking shows that Canada, which receives preferential trade treatment under the North American Free Trade Agreement, has risen 12 spots in the roster. South Florida exports to Canada totaled nearly $46 million, up 94 percent, while imports last year reached $309 million, a rise of 72 percent.