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Free trade agreements hold promise for Florida

Angele Steece arranges flowers Thursday for a wedding and a dinner at Grymes Cannon Designs in South Tampa. The business pays a tariff of up to 6.8 percent on flowers from Colombia.

SKIP O’ROURKE | Times

Angele Steece arranges flowers Thursday for a wedding and a dinner at Grymes Cannon Designs in South Tampa. The business pays a tariff of up to 6.8 percent on flowers from Colombia.

Importer Grymes Cannon eagerly awaits the end of paying a tariff on Colombian flowers that adds 4 cents to the cost of each stem he sells at his South Tampa floral arrangement business.

In St. Petersburg, Carlos Ramos will stop paying the tariff — around 15 percent— each time his underground surveying crews bring a specialized pipe into Panama for work on the multibillion-dollar canal expansion.

Fort Pierce grapefruit grower Mike Garavaglia predicts increasing sales to South Koreans with a taste for his tart fruit. The reason: A 30 percent tariff will be phased out over the next five years.

Florida is among the states most likely to get a boost from free trade agreements with South Korea, Colombia and Panama that President Barack Obama signed into law Friday. The deal was one of the few major measures approved in Congress recently with support from Republicans and Democrats.

The agreements will create 20,000 new jobs in the state and generate more than $1.5 billion in international trade opportunities, according to the Florida Chamber of Commerce.

Nationally, the deal with South Korea will carry the biggest punch. South Korea is the world's 15th-largest economy and the new trade agreement has the potential to create as many as 280,000 American jobs, according to a recent estimate by the U.S. International Trade Commission.

But the Latin America agreements hold the most promise short-term for Florida. Colombia is the state's second largest trading partner, with more than $7.5 billion in imports and exports last year. Only Brazil was bigger, with nearly $16 billion.

Miami and Fort Lauderdale have deep ties with Latin America and would reap the vast majority of increased trade with Colombia and Panama. South Florida airports and seaports offer regular connections for passengers and cargo.

"Miami and Port Everglades (in Fort Lauderdale) have the established ocean services, so they'll get the immediate benefit," said Tampa port director Richard Wainio. "We may not see big numbers through Tampa." Two vessels connect Tampa and Panama, one weekly and another monthly. None sail directly to Colombia.

The agreements would eventually eliminate duties on products the three countries trade with the United States. The deals drew fire in the United States and abroad.

South Korean farmers marched in Seoul this month to protest the lifting of agricultural tariffs. Some Democrats and U.S. labor unions argued the deals would help some companies by lowering the cost of their exports. But a flood of cheaper products imported into the United States could lead to layoffs of American workers, they said.

The nonpartisan Economic Strategy Institute points out that South Korea is a major exporter of textiles, steel and semiconductors.

"The truth is, I think this is going to cost us jobs," Clyde Prestowitz, the institute's founder and a former Reagan administration official, told the Washington Post.

"You can see how various American companies can benefit," he said. "It's hard to see how the United States benefits."

One industry that expects a quick boost is South Florida's huge fresh flower business. Flowers entered the country duty-free from Colombia until February when an Andean trade preferences agreement expired. Since then, importers had to pay duties up to 6.8 percent.

Cannon, the Tampa importer, does most of his business selling flowers grown in Colombia and Ecuador to U.S. wholesalers. Ecuador slapped on a tariff equal to Colombia's, he said.

Cannon was able to pass on duty charges to wholesalers. But he also uses some of the blooms for Grymes Cannon Designs, his business that sells fancy wedding and special event arrangements. Cannon had to raise prices.

"The wholesaler felt it, the retailer felt it, everyone in the industry felt it," Cannon said.

Renewal of the Andean trade preferences agreement was attached to the free trade deal. It stipulated that the tariff will end 15 days after Obama signs the free trade agreement, said Christine Boldt, executive vice president of the Association of Floral Importers of Florida.

Putting the overall agreements into effect usually takes 12 to 18 months, she said. One reason: The deals have been changed since they were negotiated and must return to legislatures of the three countries for ratification.

Information from the Miami Herald and Washington Post was used in this report. Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

Free trade agreements hold promise for Florida 10/22/11 [Last modified: Friday, October 21, 2011 9:36pm]

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