WorldCity Business Magazine

(5) Miami Trade 2007: Annual Report

by WC

Fueled by an export boom, South Floridas total two-way trade and trade surplus hit new heights in 2007. And theres likely to be more good news in 2008.

South Floridas two-way trade increased nearly 10 percent in 2007, surpassing $79 billion and setting a record for the fourth consecutive year. Since 2002 total merchandise trade passing through the airports and seaports of the Miami Customs district, which stretches from Port Pierce to Key West, is up nearly 60 percent.

Last year, strong demand for U.S. exports from the fast-growing economies of Central and South America was the key to South Floridas expanding trade. South Florida exports rose nearly 15 percent. Meanwhile, imports were up less than 4 percent last year, as the U.S. economy slowed and the U.S. dollar declined sharply against other currencies.

The combination of strong export growth and marginal import growth resulted in a record trade surplus of $11.9 billion for the Miami Customs district, up from $7.2 billion in 2006. Miami had the second largest trade surplus in the country after Seattle, which last year registered $15.8 billion, the largest trade surplus in U.S. history for any single Customs district.

Given the continued strength of Latin American economies and currencies, South Florida can look forward to more record trade numbers this year. If trade continues to grow at a 10 percent pace in 2008, Miami, which currently in 13th spot among the top ranks of US.

Customs districts, could challenge 11th-ranked Buffalo and 12th-ranked Cleveland. Two-way trade for the Buffalo Customs District rose an anemic 4 percent in 2007 to $85.4 billion, while Cleveland registered an 8 percent increase to $83.5 billion. To see how Miami stacks up against other U.S. Customs districts, turn to map on pages 31-32.

Among Miamis top trading partners, Brazil consolidated its hold on the top spot with a 21 percent increase in two way trade, becoming the first country to surpass the $10 billion mark. See following page for detailed listing of Miamis top 40 trading partners.

The Brazilian economy is enjoying its longest period of sustained growth in 40 years. Last year, GDP grew by over 5 percent, while the Brazilian real strengthened against the U.S. dollar, recently hitting its highest level in nearly a decade.

With continued strong demand worldwide for Brazilian commodities, and rising consumption at home, the Brazilian economy is expected to register strong growth again this year. Brazilian President Luis Inacio da Silva recently forecast that the countrys GDP would grow by at least 5 percent through 2010. That is nothing but good news for South Florida exporters.

The rising cost of oil imports ensured that Venezuela hung on the second spot among Miamis top trading partners, at $5.4 billion. Meanwhile, Colombia surged ahead of the Dominican Republic into third spot, with $4.9 billion in two-way trade.

Colombia is another booming economy. Last year, GDP expanded by over 6 percent for the second consecutive year. The result was a 20.5 percent increase in South Florida exports, while imports from Colombia actually declined by 3 percent.

If the U.S. Congress this year approves a free trade agreement with Colombia, two-way trade is likely to expand even faster. However, given the anti-free trade sentiment engulfing the country in this presidential election year, it is not even certain if either the Colombia FTA or the Panama FTA, already signed by the Bush administration, will be brought to a vote in Congress.

China hung on to fifth spot among Miamis top trading partners, but only barely. After surging 16 percent in 2006 allowing China to surpass Brazil as Miamis most important source of imports trade between South Florida and the Asian behemoth slowed considerably in 2007, as the U.S. economy cooled. Total two-way trade was $4 billion, up 4 percent. Imports from China accounted for $3.7 billion, or 92 percent, of that bilateral exchange.

Among Miamis top 10 trading partners, Honduras and France were the only countries that moved up the ranks. Largely as a result of increased South Florida exports to Honduras up 16 percent last year two-way trade advanced more than 9 percent, moving Honduras ahead of Costa Rica to become Miamis sixth largest trading partner. Two-way trade in 2007 was $3.8 billion.

Meanwhile, France entered the top 10 last year for the first time, propelled by a 43 percent increase in South Florida imports from that country. Two way trade jumped to over $2 billion from $1.5 billion in 2006. The increase was no fluke. A look at the 2002 figures shows that trade between South Florida and France has climbed 150 percent over the past five years.

France is not the only big mover since 2002. In fact, among Miamis top 20 trading partners, three countries have registered even faster rates of growth China, Argentina and the Netherlands.

Since 2002, two-way trade with China is up 181 percent. As a result, China has moved up five spots from 10th to fifth among South Floridas top trading partners.

Argentina, meanwhile, has experienced a strong economic recovery over the past five years. As a result, two way trade is up 175 percent since 2002, moving Argentina up eight spots in the ranking from 19th to 11th place. Two-way trade with Argentina surpassed $2 billion last year, up 19 percent from $1.7 billion in 2006.

Finally, trade with the the Netherlands has jumped 171 percent since 2002. Last year, two-way trade was $1.2 billion, up 14.5 percent from 2006.

Billion-Dollar Club

In 2007, South Florida added two new members Japan and Paraguay to the billion-dollar club, that is, countries with which the Miami Customs district does a minimum of $1 billion in two-way trade each year.

Two-way trade with Japan jumped 19 percent to $1.15 billion. Trade with the Asian nation is up 52 percent over the past five years. Despite that healthy rate of growth, however, Japan has slipped from 17th to 22nd place among South Floridas top trading partners.

Meanwhile, trade with Paraguay, one of South Americas poorest countries, surged 34 percent last year to $1.1 billion. Since 2002, two-way trade has increased 173 percent, moving Paraguay up five spots from 28th to 23rd on the list of top trading partners.

In 2007, a total of 23 nations registered more than $1 billion in trade with South Florida. If current trends continue, two more countries could join the billion-dollar club in 2008 Nicaragua and Switzerland. Last year, two-way trade with Nicaragua jumped 15 percent to $965 million, while trade with Switzerland surged 83 percent to $901 million.

With trade increasing, not only with Latin American and Caribbean nations, but with European and Asian nations as well, the future bodes well for South Floridas gateway economy.

According to a study released in January by Miami-Dades Jay Malina International Trade Consortium the trend of expanding international trade is expected top continue.

The study, called The Economic Impact of International Merchandise Trade concluded that annual merchandise trade had a $ 9 billion impact and supported 105,000 direct and indirect jobs in Miami-Dade County alone in 2006.

The study also forecast that the sector would grow by 6-7 percent annually over the next decade, expanding the number of jobs to over 150,000.