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rising tide

August 1st, 2006

Rising tide

South Florida’s trade receipts and surplus took a jump in 2005 to propel the Miami Customs District to record results.

It was a year of superlatives.

South Florida’s international trade rose 12 percent in 2005 to a record-setting $65.9 billion while its surplus galloped past the $2.2 billion mark. It was the first time the Miami Customs District had crossed the $60 billion mark.

All the while, the area’s top trading partners jostled for new positions.

Miami emerged as the lone U.S. Customs district among the top 25 to post a surplus. And what a surplus it was: a billion dollars more than in 2004. Much of the gain came as a result of billion-dollar trade overruns with Venezuela and Argentina.

Total exports for the Miami Customs District, which encompasses seaports and airports in a swatch running from Fort Pierce south to Key West, rose 13.3 percent to reach $34.1 billion. Imports, meanwhile, hit $31.8 billion up 15 percent from a year earlier.

A key part of that export demand came from Venezuela, which saw its trade tally with South Florida spike nearly 36 percent to close the year at 4.3 billion enough to move the South American country up four spots on the trade partner list to No. 2 behind Brazil.

The 36 percent jump in exports bound for Venezuela was a reflection of that country’s growing economy. GDP continues to expand and consumers are getting more access to credit, creating buoyant markets for U.S.-made consumer goods. At the same time, the government of President Hugo Chvez has been moving forward on a series of infrastructure projects. The resulting construction boom turned construction machinery into the fastest growing among the top Miami exports to Venezuela in 2005.

For Argentina, meanwhile, South Florida’s increased exports of high-tech equipment and parts for the aviation sector helped drive a 70 percent growth in Miami’s surplus with that comeback country. 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.

Computers topped the list of 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.

In fact, computers were South Florida’s biggest export commodity overall. The Miami Customs District exported $2.2 billion in computers last year, reflecting a jump of 33.4 percent. Computer parts were next in line, rising 17.2 percent to close the year at $2.1 billion. In recent years, those two products have held the top two spots on the export roster, although frequently swapping places.

Cell phone and electronic equipment, aircraft parts, motor vehicles and medical supplies and equipments also were high on the export roster.

Non-crude petroleum products, to the tune of $3.2 billion dollars, meanwhile, dominated imports. Aircraft and apparel were other important exports.

Among trade partners, imports from China posted the biggest gains, leaping dramatically to set China up to become the biggest source of South Florida imports this year. Although South Florida’s top trade partner, Brazil, is safely ensconced at the top of the total trade list, China is certain to surpass it when it comes to imports.

South Florida and Brazil registered $8.9 billion in trade last year, an 11.8 percent increase from 2004. Miami’s $5.9 billion in exports to South America’s strongest economy reflected an 11.3 percent rise from 2004, while imports valued at 3.4 billion fell 11.8 percent.

China, by contrast, blasted the Miami Customs District with cargo, pushing South Florida imports from the Asian nation up nearly 32 percent to $3.1 billion. Chinese cargo has so overwhelmed West Coast ports some of them now working around the clock that shipments have been diverted to places like Miami.

New lineup

When Venezuela moved up the trade partner list, four other countries moved down. They included the Dominican Republic, which was booted from the No. 2 position into No. 3 thanks to a year of nearly flat trade with Miami.

Traditionally, the Dominican Republic’s trade is split nearly evenly between South Florida exports and imports. The exchange includes textile-industry supplies, including fabric, which are sent to Dominican apparel factories. In return, South Florida receives finished garments from the Caribbean nation. In 2005, total trade was $4.1 billion, reflecting a small increase of less than 2 percent. Exports were up 5.5 percent to $2.2 billion while imports fell 2.1 percent to 1.9 billion.

The Dominican Republic, along with several Central American countries, are expected to get a trade boost if the U.S.-Dominican Republic-Central America Free Trade Agreement, or DR-CAFTA, is implemented.

The Dominican Republic’s slow growth not only let Venezuela jump ahead on the trade partner lineup, but it put Colombia at the heels of the Dominican Republic. Colombia’s trade with South Florida spiked nearly 11 percent last year to $3.9 billion. The United States and the South American country are negotiating a free trade accord that could pump additional energy into that trade exchange in the future.

In fact, trade agreements as well as the global construction boom, including the reconstruction after the violent 2005 hurricane season affecting the United States and the Caribbean began to affect trade results last year.

South Florida’s $2 million in trade with Chile, which has a new free trade pact with the United States, was a 23.2 percent leap from trade results in 2004.

*Latin American link *

Geographic proximity remained a key component of Miami’s flourishing trade scene in 2005, as even more Latin American and Caribbean countries moved into the list of South Florida’s top trading partners. Among the Miami Custom District’s Top 100 trade partners last year, 42 were from the Americas.

Latin America has always been a key source of air and sea cargo arriving in the Miami Customs District, as well as an important destination for exports. In addition, the area is a transshipment point. Mexico, for example, sends a significant volume of Caribbean-destined cargo through Miami because there are not sufficient direct trade lanes from Mexican ports. The United Kingdom also uses the Miami Customs District as a transshipment point, in part because it finds it easier to do business in the United States. Also, it is often more efficient and cost effective to send commercial containers to Miami and, from there, split the contents into smaller shipments for the Caribbean.

Florida’s other Customs district, Tampa, saw $29.3 billion in trade last year, a jump of more than 30 percent. But it registered a $9.3 billion deficit in the exchange.