Even with record trade, doubling exports a tall challege for South Florida

South Florida is poised to set a new record for exports in 2010 and again in 2011, thanks to surging economies in Latin America, home to many of the area’s top trade partners.

BECKER_PeterQuinter

Peter Quinter, leading international trade attorney, spoke at the WorldCity event.

But even so, it will be tough for South Florida to meet President Obama’s goal to double exports within five years, participants said at WorldCity’s Trade Connections on Dec. 15.

Some obstacles to doubling sales abroad: Insufficient attention in Tallahassee to funding seaport expansion. A mindset among many people not engaged in international trade that it is bad and leads to U.S. jobs being sent overseas. Too little focus in schools on geography, languages and international business. And too few loans and programs to help small companies master the ropes to sell in multiple countries.

“Our Florida Legislature is starting to pay attention to ports, but its focus has been road building,” lamented Eric Olafson, manager for cargo development at the Port of Miami.

First, the good news:

South Florida posted record trade in goods for the first 10 months of 2010, according to the latest available data: $78.2 billion, up from $64.2 billion a year earlier. That’s largely because of the economic boom in Latin America, especially Brazil, the area’s No. 1 trade partner.

Trade with Brazil through October topped $11 billion, up from $8.9 billion a year earlier. Brazilians snapped up more cell-phones, medical devices, aircraft parts and other high-tech items shipped from South Florida, according to U.S. Census data analyzed by WorldCity.

Now, the tough news:

Even at current growth rates, and coming off a big drop in trade in 2009, it will still be “virtually impossible” to meet the Obama administration’s goal to double exports in five years from either South Florida or the country as a whole, said WorldCity President Ken Roberts.

For exports to really soar, Roberts said, South Florida and the nation need:

  • Greater awareness by small- and mid-sized enterprises of the opportunities for their products overseas.
  • Passage of pending U.S. free trade agreements with South Korea, Colombia and Panama, which will open doors for greater U.S. sales, and
  • Increased investment in U.S. infrastructure, including seaports and airports.

“Why does it take 15 years to build a new runway in South Florida?,” asked Peter Quinter, an international trade attorney at law firm Becker & Poliakoff, referring to repeated delays for expansion at Fort Lauderdale-Hollywood International Airport. “Other countries are leapfrogging us in building infrastructure,” he said, citing China and Malaysia as examples.

raul

Raul Pedraza, local logistics veteran, serves on President Obama’s Export Council

To encourage exports, President Obama has named an Export Council, with one South Florida member: Miami’s Raul Pedraza.

The Cuban-American entrepreneur decades back founded what became Eagle Global Logistics, grew it to top $3 billion in annual sales with a partner, sold it and now is nurturing a similar business, Magno International.

He formerly served as president of the National Bonded Warehouse and Cargo Association and also, the Florida Customs Brokers and Forwarders Association.

Pedraza said the Council is hot on exports, because doubling U.S. sales abroad in five years could create 2.5 million jobs in the United States – everything from making more Xerox machines to building more seaports or inspecting more cargo on entry.

“We have to get past the mindset that free trade agreements … are bad words,” Pedraza said. “People think they’re going to out-source my job, but really they will in-source your job and bring more jobs to the United States,” the former Army veteran said during the meeting.

One way to change the anti-trade mindset: Encourage Americans to travel overseas more and learn more about other countries, including more languages, participants said.

“Where we’re missing the boat is education,” Pedraza said. “I would never have become who I am without great Spanish,” he said, noting that many younger U.S. Latinos lack the Spanish language skills required to operate professionally in booming Latin America.

Also key to boost exports: cutting government red-tape, especially for export licenses now required by a host of departments from Commerce to Treasury , said Quinter, the international trade lawyer.

The President’s Export Council is working to slash red-tape and reduce export licensing: “There’s a lot of stuff you can buy at Radio Shack that today requires an export license,” Pedraza conceded. One positive step: The Council asked the Defense Department to review what items really need a license and expects to slash today’s list by 80 percent, he said.

Still, small- and mid-sized businesses find it hard to finance export training, research and trips abroad to meet potential buyers, said Maria Dreyfus-Ulvert, a trade specialist with Miami-Dade County’s Office of Economic Development and International Trade.

Washington’s Export-Import Bank is supposed to help U.S. businesses to sell more overseas, but “the paperwork is too much,” said Anita Aedo, managing director of ExpoCredit.

“Access to capital for small and medium-sized enterprises is a big, big issue,” Pedraza conceded. He urged U.S. banks to leave the “fear mode” and “open up the coffers pretty soon.”

Trade Connections is one of six event series organized by WorldCity to bring together executives on international business topics. The trade series is sponsored by Miami International Airport, shipping company Seaboard Marine, the Port of Miami and law firm Becker & Poliakoff. The next meeting is set for Feb. 18.