WorldCity Business Magazine

Made in China

by Mary Dempsey

China has done it: pushed aside Brazil to become the top supplier of South Florida’s imports.

It would have seemed improbable just a few years ago.

South Florida now imports more from China than any other nation, according to WorldCity’s analysis of U.S. Census data for the first quarter of 2006. That means the Asian powerhouse has displaced long-time No.1 import partner Brazil at least for now.

The trade-partner shift came against a backdrop of total trade worth $17 billion, a jump of more than 11 percent when compared with the first three months of 2005.

The first quarter 2006 tally set South Florida on its way to a new trade-surplus record. First quarter exports grew 19 percent, led by computers and computer parts, while imports rose just more than 3 percent.

The Miami Customs District exported $9.3 billion-worth of goods in the first quarter while importing $7.8 billion. That trade surplus of $1.5 billion compared with just more than $250 million in the first quarter 2005 a jumpstart that gave the Customs district a good chance of breaking last year’s surplus mark.

For 2005 as a whole, Miami posted the biggest trade surplus of any major Customs district: nearly $2.2 billion. That was $1 billion more than in 2004.

Although imports from Brazil declined, the South American country remained South Florida’s top trade partner overall, as measured by the combined value of imports to and exports from Brazil. And South America’s biggest economy remained the leading destination for exports through the Miami Customs District. Those shipments to Brazil reached $1.5 billion, up 25 percent from the same period last year.

On the imports side, gasoline and clothing from Central America and China continued to top South Florida’s import roster. Imports of gasoline and other refined products through Port Everglades rose 70 percent, to $91 million, although various important categories of apparel imports dipped slightly in value.

Imports from China increased 10.5 percent to close the quarter at $779 million, well above the $492 posted for Brazil. The January-March results come on the heels of a big jump in China trade through 2005. During the 12 months ending Dec. 31, 2005, the Miami Customs District imported $3.1 billion in goods from China, a dramatic 31 percent jump compared with the year earlier.

China’s gradual economic reforms have opened the economy to international trade and investment and have made it one of the fastest growing in the world, with a nearly nine-fold increase in GDP per capita since 1978, according to a WTO Secretariat report on the trade policies and practices of China.

Brazil hung onto its import lead in 2005 but just barely as Miami’s imports from the South American fell 11 percent to end 2005 at $3.4 billion.

Although China sits at the top of the import lineup, the real story is Brazil’s imports, which plummeted more than 45 percent over first quarter. South Florida’s trade with Brazil, unlike China’s, can be volatile, as it is led by big-ticket jet imports from Embraer.

The Brazilian aircraft maker is one of the world’s two leading manufacturers of so-called regional jets, along with Canadian company Bombardier. Miami’s aircraft imports fell nearly 64 percent for the first three months of this year.

However, Brazilian officials in Miami say jets are not the whole story. Since WorldCity tracks trade by its value, rather than its volume, currency exchange rates also come into play.

“With the current exchange rate, it has become more expensive for Brazilian exports,” said Luis Felipe Mendona, deputy consul general and head of the trade bureau with the Brazilian Consulate in Miami. “One third of Brazil’s trade with the United States goes through Florida.”

Beyond the China-Brazil tussle, Venezuela continued to entrench itself on the trade partners list, holding fast to the No. 2 position it grabbed in 2006 pushing out the Dominican Republic. Oil imports from Venezuela accounted for nearly $225 million, or 25 percent of South Florida’s energy imports for the first three months of the year. That represented a nearly 24 percent jump from the same three months in 2005.

Exports to Venezuela were also on the rise, gaining 22 percent, largely behind a jump in shipments of construction equipment to the South American country.

In the first quarter of 2006, total container tonnage at Port Everglades grew nearly 21 percent to 3.4 billion short tons, according to Carlos Buqueras, Port Everglades’ director of trade development.

Buqueras said Port Everglades’ capacity to handle cargo has increased over the past year. Florida International Terminals moved into to a 36-acre terminal previously owned by South Stevedoring Inc., which filed for Chapter 7 bankruptcy in 2003. Mediterranean Shipping Co. (MSC) has also moved into a new 39.2-acre facility.

At the Port of Miami, meanwhile, first quarter imports were nearly 1.06 billion short tons against 1.05 billion tons in 2005. Exports, however, fell 4.8 percent to end the quarter worth $591 million.

Trade statistics from the U.S. Census Bureau track commodities at the Customs district where they enter or leave the country, not at their point of origin or in the case of goods that will pass through a transshipment point at their final destination. The Miami Customs District, which includes airports and seaports from Fort Pierce south to Key West.

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