WorldCity Business Magazine

(3) Miami Trade 2007: 1st Quarter Report - Rising in the East

by Gregg Fields

It isnt just the sun. Chinese imports continued to widen their lead in the Miami Customs District in the first quarter.

As recently as 2005, China was the second-leading provider of Miamis imports, after Brazil.

By the first quarter of last year, Chinese imports had a substantial lead, with a value $287 million greater than Brazils—$779 million versus $492 million.

In the quarter most recently ended, that gap widened further, to $381 million. China sent $896 million in goods here, compared to $535 million from Brazil.

Thats just one of the nuggets of news learned from sifting through the first-quarter trade statistics.

Miami remains, with software center Seattle, that rare breed among customs districts: One that produces a trade surplus for the United States, whose trade deficit continues to widen. This year, the districts first quarter surplus of $2.5 billion was sharply higher than last years $1.5 billion.

And while Miami remained the 13th-largest district in terms of total trade, the value of goods exchanged rose $1.5 billion, an 8 percent increase.

Put another way: The good news is trade continues to grow.

The more important news is that it is changing in important ways that members of the trade community need to know about.

TRADING PARTNERS

When it comes to trading partners, first-quarter statistics show the strongest growth continues to come from the familiar faces. With Brazil, for instance, the most important trading partner in the Miami district, total firstquarter trade hit $2.35 billion, a 17 percent increase. And trade remains 26 percent above the $1.8 billion of the first three months of 2004.

But trade trends with South Americas largest country have nevertheless shifted somewhat in recent years. For instance, imports of $535 million in the quarter represented an 8.7 percent improvement from last year. But imports from Brazil remain one-fifth below the 2004 levels, and are only about 60 percent of their peak 2005 spike of $904 million.

Exports to Brazil have more than taken up the slack. They were $1.8 billion in the first quarter, up 19 percent from a year ago and roughly half again as large as 2004s first-quarter total of $1.2 billion.

The result is that Brazil accounted for virtually all the increased trade surplus in the Miami district in the first quarter. All totaled, the surplus rose to $2.5 billion from $1.4 billion in the first three
months of last year, a gain of $1.1 billion.

The surplus with Brazil was up by $1.2 billion.

And some obvious strains between Washington and the government of Venezuelan leader Hugo Chavez havent deterred trade. Flush from high oil prices, the country bought $979 million in
exports from the Miami district, a gain of 14 percent. But perhaps more tellingly, exports to Venezuela as well as trade overall are more than double the level of 2004s first quarter.
Imports from Venezuela were stable in the first quarter, at $281 million. Again, however, the long-term trend tells a different story the dollar value of imports from Venezuela is up 86 percent in the last three years.

Colombia, whose trade figures tend to be less volatile, saw total trade with the Miami district climb 12 percent last year, to $1.1 billion. All the gain came from exports to the country, which rose to
$716 million from $587 million. Imports declined, but by less than 1 percent, to $448 million.

Rounding out the top four was the Dominican Republic. There was a slight rise in imports from the DR, which were $476 million in the Miami district compared to $453 million a year earlier.
Meanwhile, exports to the DR rose 15 percent to $631 million from $546 million.

All totaled, the Miami districts surplus with its four top trade partners was an impressive $2.4 billion. But that figure is greatly reduced when added with the statistics from the next country on the list China.

China now ranks as the Miami districts fifth-leading trading partner, barreling ahead of Costa Rica and Honduras. Total trade with China was $966 million in the first quarter, up 13 percent from the same period last year and 85 percent ahead of early 2004. Barring something unusual, it appears certain to soon join the club of countries that do $1 billion a quarter in trade with Miami.

Of the trade with China, over 90 percent is imported into Miami roughly $897 million in the first quarter. Just $70.5 million in goods were exported to China, a slight decrease from last year.

The result is that Miamis trade deficit with China was 16 percent larger in the first quarter than a year earlier, and is 73 percent larger than three years ago.

To be sure, the Miami district has large trade deficits with other major countries as well, including France and the United Kingdom. Their quarterly deficits of $361 million and $292 million, however, are dwarfed by Chinas even when theyre added together.