WorldCity, Miami-Guatemala Annual Report: No. 8 trade partner- From apparel to agro products | Connecting Local Business Leaders To The Global Economy

Miami-Guatemala Annual Report: No. 8 trade partner- From apparel to agro products

July 27th, 2006

Trade with South Florida grows only slightly, but the Guatemalan economy could benefit from implementation of CAFTA.

Two-fifths of all U.S. imports from Guatemala last year entered the country through the Miami Customs District.

South Florida and Guatemala exchanged $2.3 billion in goods in 2005, an increase of 3.8 percent, with the bulk of that trade coming in the form of imports. The United States’ trade with the Central American country was $5.9 billion.

South Florida imports principally apparel, textiles and agricultural products totaled $1.18 billion, down just a hair from $1.19 billion in 2004. Suits for women and men topped the exchange. Non-knit blazers for ladies totaled $285 million, down 10 percent from 2004, while imports of men’s suits topped $139 million, down 4 percent from 2004.

Ports in South Florida also processed $256 million-worth of Guatemalan-made sweaters. That compares with $248 a year earlier.

Agriculture contributes 23 percent of Guatemala’s $32 billion gross domestic product. Among agricultural imports, coffee was, in value, the most important South Florida import, surpassing another traditional commodity, bananas. In 2005, coffee imports rose an impressive 133 percent to exceed $30 million. Bananas followed at nearly $28 million, a gain of 25 percent from 2004.

Although traditional farm products like coffee, bananas and sugar remain important, non-traditional agricultural goods including various commodity categories of frozen vegetables are gaining ground. Vegetable imports increased 25 percent to nearly $29 million. Cut flowers, while not among the Top 25 list of imports, also made admirable gains. They rose 30 percent last year to total $2.5 million.

On the flip side of the trade exchange, Miami exports to South Florida totaled $1.1 billion. That reflected an increase of 8 percent from 2004. The most important exports were technology related, with the most valuable being transmission devices for cell phones, computer parts and computers. About half the exports were manufactured or produced in the state of Florida, according to Enterprise Florida, the state agency for economic development.

The Miami Customs District processed more than $86 million in exports of cell phone transmission devices, reflecting a 6.5 percent slide from 2004. But shipments of computer parts were on the rise, jumping more than 16 percent to total $71 million. Shipments of computers and notebooks from Florida rose even more, climbing 48 percent to $43 million.

Guatemala’s textile relationship with South Florida is symbiotic: the Miami area ships raw materials for the garment industry to Guatemala and the Central American country returns finished clothing. South Florida shipped more than $52 million in cotton fabrics, $36 million in 85-percent-cotton fabrics and $23 million-worth of combed and carded cotton to Guatemala.

South Florida was also the departure point for $17 million in heavy construction machinery, $17 million in motor vehicles and nearly $16 million in medical instruments bound for Guatemala.

Among the Miami Customs District’s exports, one sparked an outcry in the Central American country. That was nearly $14 million-worth of poultry. Florida’s former undersecretary of foreign affairs, Hugh Simon, said the poultry shipments fueled farmers’ opposition to the Central American Free Trade Agreement in Guatemala and elsewhere in Central America. The agricultural sector, in particular, fears it will be displaced by U.S. goods. The United States is one of the world’s biggest exporters of poultry.

The free trade pact has been approved in Guatemala but has not yet been implemented, although some tariffs have already been lowered.

A World Bank report concluded that implementation of free trade agreements will add 0.6 percent to individual countries’ GDP growth during the first five years of the accord.

“The vast majority of families in Central America will benefit from lower food prices resulting from the removal of trade barriers,” said Carlos Jaramillo, a World Bank economist for Central America and co-author of the report. “While a small share of the population living in rural areas could be adversely affected by lower prices of sensitive foodstuffs, timetables of up to 20 years of tariff reduction and government programs should help them find new opportunities.”