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Florida business leaders peg economic recovery on international trade

A forklift driver delivers scaffolding to a container ship at Tampa Port Authority’s Hookers Point. Economists say international trade holds the potential to be the biggest growth sector in Florida.

Bloomberg News

A forklift driver delivers scaffolding to a container ship at Tampa Port Authority’s Hookers Point. Economists say international trade holds the potential to be the biggest growth sector in Florida.

A group of Florida business leaders on Wednesday launched a campaign to double state exports in the next five years, singling out international trade as a key catalyst for the state's economic recovery.

"As important as agriculture and construction and tourism have been and always will be, the truth is our economy has changed and we're never going back to the economy we used to have," Mark Wilson, president and CEO of the Florida Chamber of Commerce, said in a conference call with reporters.

Manuel Mencia, senior vice president of international trade and business development for Enterprise Florida, backed him up.

"This is a sector that holds the potential not only to lead Florida out of the recession, but to be the growth sector in Florida, certainly for the next decade and years to come," Mencia said.

The campaign was underscored by the release of a chamber-funded report analyzing the potential payoff of greater investment in international trade and suggesting ways to promote more trade.

The study was conducted by Tony Villamil, an economic adviser with the Washington Economics Group near Miami. Villamil was an economic development adviser for Jeb Bush when Bush was governor.

Among recommendations discussed Wednesday:

• Developing a comprehensive federal policy agenda for Florida. One key agenda item is promoting congressional passage of free-trade agreements with Colombia, Panama and South Korea.

• Giving more "trade capacity grants" to economic development organizations in Florida to spur investment.

• Spending more on international marketing.

• Focusing attention on Florida's No. 1 export market, Brazil, followed by emerging markets in Asia and Latin America that are coming out of the recession in relatively good condition.

The campaign comes with one built-in advantage: The state already has a huge and growing presence in international trade.

One in every six jobs in Florida is tied to international business, Villamel says. With more than 42,000 export companies, Florida boasts the second-largest concentration of exporters in the United States.

The state also is the third-largest exporter of high-tech products and growing faster than the rest of the country. Between 2003 and 2008, Florida's high-tech exports rose 81 percent, more than three times as fast as the U.S. average growth in that sector.

Wilson, who is slated to join a trade mission to Colombia this summer, said the more Florida increases its international trade, the better it will weather the next economic storm.

Florida companies involved in international trade are not only more resilient to an economic downturn, but the jobs pay 30 percent higher wages on average and trade companies tend to grow 30 percent faster, he said.

"As we transition from a low-cost state to a high-cost state, trade (offers) one of the most explosive, quickest returns."

Opportunities abroad

A report from the Florida Chamber of Commerce identifies increased international trade opportunities between Florida and five countries in particular:

Brazil

Already Florida's top export market, Brazil emerged early from the global recession with its economy growing almost 2 percent in the second quarter of 2009. A source of both foreign investment and international visitors to Florida, Brazil is expected to grow its economy 4 to 5 percent annually over the next five years.

Mexico

Mexico's economy is forecast to grow 4 percent this year, and longer term growth prospects are strong. Mexican companies have continued to aggressively expand abroad, including operations in Florida.

Colombia

Although the Colombia-U.S. Free Trade Agreement has yet to be ratified by Congress, Colombia has enjoyed preferential access to the U.S. market through the Andean Trade Preference Act. The country's agro-industry, mining and energy sector meshes well with Florida's corporate structure.

China

Huge trade opportunities abound as China's economy grows an anticipated 10 percent this year and 9.7 percent next year. Florida is well-positioned as a springboard for Chinese companies eager to tap Latin American markets.

India

Other than fertilizer exports, India has been a largely untapped market. Its economy is expected to expand a strong 7 to 8 percent in 2010 and 2011. Collaboration opportunities with Florida are particularly strong in IT, biopharma, aerospace/defense and emerging Indian industries like tourism/hospitality.

Fast facts

Florida's international exposure

42,000: Classified as exporters in Florida, second-most among U.S. states

1.3 million: Jobs in Florida tied to international activities

275,000: Florida jobs at foreign-owned firms

2,500: Foreign-owned subsidiaries operating in Florida

$39 billion: Estimated foreign direct investment in Florida in 2008

Source: Florida Chamber of Commerce

Florida business leaders peg economic recovery on international trade 05/19/10 [Last modified: Monday, May 24, 2010 7:15pm]

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