13 December 2011
The United States’ trade with the world has recovered the losses of the global economic meltdown, but how goods move and are financed is changing and will continue to do so in the future.
Dan Fisher, director of global trade finance for North America for TD Bank, outlined some of the recent changes in trade and trade finance and what may be on the horizon at WorldCity’s Trade Connections on Dec. 9.
“Export markets that have dried up in one place are looking for new markets in new places,” Fisher said.
When the U.S. housing crisis took hold and construction came to a standstill. “Canadians went over to China to teach them how to build roofs out of lumber,” he continued. “Now China’s buying quite a bit of lumber to build their roofs instead of concrete.”
China has also been on a worldwide shopping spree buying up any commodities it can to support its growth.
“When I came in two years ago there was $650 million in credit limits for China,” Fisher continued. “Now it’s $1.1 billion.”
The importance of Asian trade at a the national level becomes increasingly obvious when you look at South Florida’s trade with the world, which is climbing to new heights while also seeing its share of the country’s trade as a whole drop.
“Part of the reason for that is we don’t do a whole of trade with Asia,” said WorldCity President and CEO Ken Roberts. The Miami Customs district, which stretches from Port St. Lucie to the keys, however, “is the only one that’s had a trade surplus for the last 20 years.”
The value of the district’s trade, at $82.75 billion through October, grew 2.06 percent faster that the U.S.’s total trade, which was worth $2.74 trillion. Compared to 2008, Miami’s trade has grown by 22.38 percent
That strength is credited to South Florida’s strong ties with Latin America, which fared better than many regions of the world and continues to perform well, though there are some concerns.
“Brazil is very heated right now,” Fisher said. They’ve got a great economy going on, they’re subject to inflation.”
Carmen Taylor, managing director for Latin America and the Caribbean for American Airlines Cargo, asked if “corruption is concern” given that six of members of President Dilma Rousseff’s cabinet have stepped down since she took office in January.
“Brazil is a developing country and it’s difficult [because it] has a lot of natural resources,” Fisher said. “Everyone’s got their eye on what you’re talking about but it’s nothing.”
Still, the majority of TD Bank’s trade finance is done “case by case” and evaluated based on the country the shipper is going to or coming from. Throughout Latin America the bank is active in Costa Rica, Brazil, Ecuador, Chile and Colombia, but is staying away from Venezuela. Florida seems as though it will continue to play an important part in the U.S.-Latin America relationship thanks to the close ties between the two regions.
“Lots of Florida trade is done on an open account,” Fisher said,” because trade is done among families or between someone and their home country and there’s that trust there.”
WorldCity’s Trade Connections quarterly event series is sponsored by Seaboard Marine, American Airlines Cargo, Flagler Development, Miami International Airport and the Port of Miami. The next Trade Connections event is Feb. 17.