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Miami-Argentina Annual Report: No. 11 trade partner- Surplus-boosting year

July 27th, 2006

Increased exports of aircraft parts and high tech goods added dramatically to South Florida’s trade surplus with Argentina.

A dramatic increase in exports to Argentina combined with a steep drop in imports from the South American country gave South Florida a $1 million surplus with its No. 11 trade partner in 2005.

Increased exports of high-tech equipment and parts for the aviation sector helped drive the 70 percent surplus growth. In 2005, exports from the Miami Customs District reached nearly $1.3 billion, up 31.5 percent from a year earlier. South Florida imports from Argentina, on the other hand, fell by almost 40 percent to close the year at $217 million.

On a national level, Argentina’s trade with the United States was more balanced. The United States sent $4.1 billion-worth of goods to the South American nation while importing $4.4 billion-worth.

Argentina’s economy has bounced back from the tailspin that started in 2001 and the country is expected to see GDP growth of 7.3 percent in 2006, according to International Monetary Fund projections.

Computers were the top Argentina-bound product from South Florida, jumping nearly 54 percent to $170 million. In addition, exports of computer parts climbed almost 60 percent to $146.5 million.

General aircraft parts nearly doubled to close the year at $72 million, although parts for regional jets dipped 12 percent to $29 million when compared with trade data for 2004. Aircraft sales were also off more than 3 percent, ending the year worth just under $23 million.

Tech related items and components jumped astronomically in value when compared with a year earlier. In 2005, exports of electrical supplies jumped 194 percent to $13 million; they were $4.5 million in 2004. Exports of semiconductors also grew at breakneck speed, jumping 420 percent to nearly $12 million. But it was office machines that were off the charts. They reached $10 million in 2005. A year earlier, they were only $586,900. Additionally, nearly $10 million X-ray equipment was shipped from Miami to Argentina, a gain of 277 percent.

Although Argentina’s economy is expected to continue to perform well, the country still faces hurdles. It is combating a weak investment climate, inflation and power shortages starting from an energy crisis that began in 2004. The government has imposed a series of energy sector reforms, created a state-owned electricity company and promoted incentives for greater infrastructure investment.

But it is in another part of the energy industry that South Florida companies have profited. In 2005, they exported nearly $21 million in drilling equipment for use in Argentina’s oil and natural gas fields. Those exports more than doubled from the $10 million registered in 2004.

Argentina has approximately 2.7 billion barrels of proven oil reserves and produces nearly 692,000 barrels of oil a day according to the U.S. Department of Energy. Additionally, the country has Latin America’s third largest natural gas reserves.

In fact, in 2004, refined petroleum was South Florida’s No. 1 import from the South American country. But in 2005, petroleum imports from Argentina took an 86 percent dive, ending the year at $21 million. Petroleum was surpassed by imports of leather products used mostly for upholstery and parts for automobile seats. Even though they beat out oil, they, too, were down from a year earlier.

Imports of upholstery products crossing South Florida were valued in $41 million, a decrease of 22 percent from 2004 levels. Components to assemble automobile seats fell 47 percent to $21 million from nearly $40 million. Other leather imports including purses and bags were down 18 percent to total less than $5 million.

Imports of pinewood for home construction also fell, dropping nearly 43 percent to just under $2 million.

Still, some import gains were posted. Miami-bound shipments of engine parts for cars and trucks jumped to nearly $10 million. In 2004, they were nearly $8 million.

Fruit juices, especially grape juice from the wine-producing country, were another major commodity arriving at ports in South Florida. In 2005, the Miami district bought $9.5 million in juices. About 83 percent was grape juice; the rest was divided among apple, orange and pineapple juices. In 2004, the Miami Customs District imported less than $8 million in juices from Argentina.