WorldCity Business Magazine

Venezuela flying high while Central America falters

by Joachim Bamrud

A look at the biggest gainers and losers with South Florida, by country, shows some shuffling in the ranks of the Top 10.

Venezuela was South Florida’s fastest-growing trade partner in the first quarter of 2005, according to WorldCity analysis of the most recent U.S. Census statistics.

Despite cooling off from the torrid, 100 percent growth rate during 2004, the nation headed by controversial, left-leaning President Hugo Chavez saw its trade increase more than $277 million and 40 percent in the first three months of this year.

It is, for the moment, the fourth-largest trade partner with South Florida, trailing only Brazil, Colombia and the Dominican Republic, in that order.

More than 75 percent of Venezuela’s trade is exports to the South American nation, leading to the greatest surplus South Florida has with any nation.

The leading exports to Venezuela are the stuff of an economy attempting to rebuild: cell phones and cell phone equipment, heavy machinery, computer and computer parts, car parts and more.

The other three leading growth stories in the first quarter were Brazil (up $253 million, largely in imports to South Florida), China ($214 million, almost exclusively in imports) and relatively new NAFTA partner Chile ($119 million, fairly evenly matched between imports and exports).

Brazil maintained its long-standing top ranking with South Florida while Venezuela moved up two positions, China one position and Chile, two. Also moving up was Colombia, which jumped ahead of Costa Rica, which fell three slots, and the Dominican Republic.

Also falling were Honduras, which slipped one notch to No. 6, Guatemala, which dropped from No. 7 to No. 8, and No. 11 El Salvador, which fell two positions and out of the Top 10.

The common thread among the four nations that dropped in the ranking? They are all Central American nations, the nations with the most to lose to China’s increasing apparel imports now that its ascension to the World Trade Organization is complete. Guatemala actually showed a slight increase in overall trade while the other three were down through the first three months of the year, according to WorldCity analysis.

The Central America Free Trade Agreement was before the U.S. Congress as this issue went to press, its likelihood of passage unclear. CAFTA would allow virtual dutyand tariff-free trade between the United States and the seven nations of Central America as well as the Dominican Republic. South Florida is the leading U.S. Customs district for all eight nations, so the local impact is likely to be significant, whichever way the vote goes.

Several other nations saw significant decreases in overall trade in the first quarter of 2005, including once high-flying Spain, Sweden, Mexico and South Africa. Spain and Mexico traditionally rank among the top 15 to 20 trade partners with South Florida.

Other nations with big dollar increases in trade in the first quarter were France, the Bahamas, Paraguay, Turkey and Aruba.