WorldCity, Miami-Mexico Annual Report: No. 14 trade partner- Reaching to Yucatan Peninsula | Connecting Local Business Leaders To The Global Economy

Miami-Mexico Annual Report: No. 14 trade partner- Reaching to Yucatan Peninsula

July 27th, 2006

Mexico and Miami strengthen their trade lanes with jewelry, tech products and yachts playing a key role.

Two-way trade between Mexico and South Florida reached $1.3 billion last year a jump of 11 percent thanks to a big boost in Miami imports.

Imports into the Miami Customs District reached nearly $571 million, an increase of 55 percent when compared with trade results from 2004. Miami’s exports, meanwhile, fell 8 percent to close the year at $766.5 million.

In terms of dollar value, jewelry was South Florida’s top import from Mexico. Taking advantage of Mexico’s lower labor costs, the jewelry industry has concentrated assembly facilities in Guadalajara and Mrida, on Mexico’s Yucatan peninsula. South Florida’s jewelry shipments rose 129 percent to surpass $218 million from $95.2 million in 2004.

“It is very expensive to assemble and finish jewelry in the United States,” said Mexico’s trade commissioner in Miami, Jorge Barreto.

The separate commodity category of diamonds was the second most valuable import, skyrocketing to $72 million from less than $3 million in 2004.

U.S. manufacturers and jewelers export stones and jewelry-making components to Mexico for assembly in the Yucatan, and some of those products are shipped from South Florida. However, in 2005, exports of jewelry for assembly decreased a dramatic 83 percent to close the year at $82 million. The Houston/Galveston Customs District seems to have nabbed that business away from Miami: Houston’s jewelry exports to Mexico jumped 300 percent to nearly $26 million last year.

Other major imports into the Miami Customs district were technology products, seafood and aircraft parts.

Imports of Mexican-made devices for cellular phones soared 125 percent to $32 million while seafood imports mostly fish fillets rose 39 percent to $34 million.

Imports of airplane parts, meanwhile, nearly doubled to $16 million. They consisted mostly of turbine parts for regional and business jets. Barreto said most of those parts are manufactured by Precision Castparts Corp. (PCC) Airfoils, which is in based in Ohio but has a subsidiary in Mrida. The airfoils division makes power generation equipment, blades and vanes for the high-temperature turbine section of commercial and military jet engines.

Again, because of lower labor costs, 61 aerospace companies, most of them U.S. based, have set up shop in Mexico, employing nearly 10,000 workers. Thirty of the 61 are located in Baja California. Among the best known include Honeywell, Gulfstream, Rockwell Collins, Lockheed Martin, Northrop Grumman, Thayer, Chromalloy, GKN and C & D Aerospace.

Imports of cultured pearls from the west coast of Mexico, meanwhile, took a hit. They decreased 60 percent to total just under $14 million.

Barreto wants to see increased trade between Florida and Mexican cities in the Gulf of Mexico and he predicted that planned construction of the Plataforma Logistica, an intermodal center connecting warehouse districts with gulf coast seaports, railroads and truck stops, would help fuel that trade increase. Gulf Coast ports already have been shipping textiles to all over the world through Miami.

“The tendency is for growth because most of what Mexico exports to Europe has to go through Miami,” he added.

Mexico also uses the Miami Customs District as a hub for shipping construction materials and healthcare products to Caribbean countries. He said there are not enough direct cargo routes to individual countries in the Caribbean, so Mexico ships into South Florida for later distribution among Caribbean islands.

Mexicans’ interest in leisure craft has been a blessing for South Florida’s boat industry. Yachts and powerboats were the Miami Customs District’s top export to Mexico in 2005, although the $85 million total was down slightly from $88 million in 2004.

Exports of pharmaceuticals, on the other hand, skyrocketed. They reached nearly $77 million, a leap of 156 percent. Shipments of aircraft parts, meanwhile, were nearly flat at $35 million, and exports of regional jet parts held steady at $12.1 million, up a tinge from $12.1 million a year earlier.

Other key exports from South Florida consisted of transmission devices for cell phones, equipment for line telephony, computer parts and aircraft components.