WorldCity Business Magazine

Trade grows, but South Florida is falling behind

by Joachim Bamrud

Among top U.S. Customs districts, only Buffalo had a smaller increase.

South Florida’s trade with the world grew at a respectable 10 percent clip in the first quarter, but the $1.4 billion increase was eclipsed by Customs districts from New York to Los Angeles, Seattle to Savannah, and quite a few points in between.

All but one of the United States top 15 Customs districts recorded a greater dollar increase in trade than No. 13 South Florida, according to WorldCity analysis of U.S. Census data.

South Florida’s trade continues to grow more slowly than the rest of the United States, as it did in 2004. In part, that is due to the unique nature of South Florida trade, which is dominated by Latin America and the Caribbean, particularly exports.Among the top 15, only Buffalo, New York, showed less significant growth, with a $1.1 billion increase. In terms of percentage, it was joined by Los Angeles, New York, Laredo, Texas and San Francisco in having a smaller increase than South Florida.

The highlights in the first-quarter statistics released last month:

There is a jostling for position among the top countries conducting trade with South Florida, with Colombia sliding into the No. 2 slot ahead of the Dominican Republic, and Venezuela and Argentina continuing to recover and move up. South Florida’s trade surplus, which once stood at $11 billion annually and was the nation’s largest, slipped to $252 million from $719 million in the first quarter of 2004. Diminutive as it is, it is now the nation’s only remaining trade surplus The Central American apparel industry so critical to South Florida trade is not yet being hurt by the lowering of barriers to Chinese apparel entering the United States, even though that trade is soaring.

As the U.S. Congress wrestles with whether to pass the Central America Free Trade Agreement, which now also includes the Dominican Republic and is known as DRCAFTA, the biggest loser in the Western Hemisphere from Chinese competition appears to be a country already benefiting from a trade agreement with the United States: Mexico.

When dividing apparel imports into two major categories, China has replaced Mexico as the No. 1 U.S. importer in the knitted category with a 91 percent increase and tightened its grip on the No. 1 ranking in the non-knit category with a 58 percent increase. But the biggest losers at the moment are other Asian apparel-producer nations, such as South Korea, the Philippines, Malaysia, Vietnam and Taiwan.

The leading apparel-producer nations of DR-CAFTA Guatemala, Honduras, El Salvador and the Dominican Republic are, for the moment, not showing the effects of apparel-trade liberalization afforded China as of Jan. 1, 2005, under the provisions of the World Trade Organization agreement it signed in the 1990s.

But trade and globalization are complicated, as are trade flows. China and South Korea, for example, have apparel operations in Central America.

Nevertheless, through the first three months of the year, Honduras, Guatemala and El Salvador remained as the third-, fourth- and fifth-ranked importers to the United States of knitted apparel, and all three increased that trade over the same three months in 2004.

In the non-knitted arena, El Salvador’s imports to the United States were down, though less than Mexico and Canada within the hemisphere, and less than Russia, South Korea and Hong Kong outside it. It dropped four slots, nonetheless.

But also in the non-knitted apparel category, the Dominican Republic kept its No. 12 position while Guatemala and Honduras moved up one in the rankings, to 15 and 16 respectively, and Nicaragua moved up two positions to No. 20. All four increased their imports to the United States.

The impact of China on the apparel import industry is important to South Florida because it is the leading Customs districts for every nation of Central America and the Dominican Republic. Central America’s obvious advantage is proximity to the United States.

Beyond the highlights in the quarterly statistics, there are always several oddities:

The biggest jump in the rankings with South Florida is by Belarus, which climbed 119 positions to end up in the Top 100 at No. 77. Located between Poland the Russia and formerly part of the Soviet Union, Belarus is another provider of refined petroleum products for the South Florida market, which increased more than 90 percent over last year.

The biggest drop in dollars was South Florida’s trade with Spain, which fell $215 million, or almost 52 percent, year over year. It dropped Spain to a No. 23 ranking, from No. 11, which is exactly where it had been two years ago, before a big spike in two-way computer parts trade.

Imports of human and animal hair for wigs jumped 680 slots on our ranking of more than 1,260 commodities. The percentage gain was a whopping 629,699 percent. The gain was from $320 to slightly more than $2 million. The source? All but a fraction was from China, of course.