Florida businesses are celebrating the approval of the free-trade agreements with Colombia, Panama and South Korea, hoping they boost both the state's exports and its image as the gateway to Latin American business opportunities.
The agreements approved last week will eliminate tariffs on U.S. products, help protect intellectual property and improve access for American investors in those countries. Experts say they could boost the nation's exports by $13 billion and the Obama administration says it will add at least 70,000 new jobs for Americans. Working out the final details with the other countries could still take several months.
While much of the national attention has focused on the South Korea deal, in Florida the immediate focus is on the Colombian.
About 16 percent of Florida's economy is based on international business, and at $4.5 billion, Colombia is the state's fourth-largest export market after Brazil, Switzerland and Venezuela.
Joseph Reagan Jr., a vice president for the Baltimore-based Wexford Science and Technology, said the timing of the deal is excellent, as his company seeks to fill its new Miami Life Science & Technology Park. The biotech center was inaugurated last month in Miami's downtown health district.
"A lot of the growth in biotech and life sciences is going to happen in Latin America as their economies grow," Reagan said, noting that biotech firms are also increasingly looking to conduct clinical trials in Latin America. "The free trade agreements are bound to increase traffic through Miami, and we hope to grab the appropriate piece of that for the life sciences."
Among the park's new tenants is Andago, the Spain-based information technology company that is developing an internet-based medical records program with Google. More than a dozen other biotech, intellectual property law and transport firms, have also recently moved in, most with an eye on Latin America, he said.
Meanwhile, Goya Foods is opening a new, state-of-the-art distribution center in Miami next week, which will focus in part on ramping up distribution to Colombia and Central America.
Joe Perez, a senior vice president for the Secaucus, N.J.-based company, said Goya planned the new center before the deal was reached based on growing demand, but the trade agreements provided further incentives.
"First off, we import many raw good from Colombia: blocks of brown sugar, cookies, crackers, beans and chocolate. Second, is our ability to get our product into Colombia," he said.
He called Colombia "a growing market with huge potential. Its population has reached about 39 million, it has a sizeable middle class and a string of urban centers.
"Florida is a natural departure point," he added.
The trade agreements' most immediate affect will actually be on imports, not exports. That's because Congress also retroactively renewed a decade old Andean trade deal signed during the height of the Colombian drug war to promote legitimate industries. That deal waived duties on many agricultural products like cut flowers, about 90 percent of which the U.S. imports. The majority -- about seven cargo jet loads daily -- come through Miami International Airport.
The Andean deal, which had to be renewed every two years, expired in February, jacking up the cost for importers. The Colombia Free Trade agreement will make the duty-free provision permanent.
"This provides sustainability for our business, because now we have the duty-free status forever. We can plan better," said Daniel Sabogal, president of Fantasy Farms, a Miami-based flower importer and distributor. "Now we can focus on growing our businesses."
Lee Sandler, chair of the Florida Chamber of Commerce's International Committee, says in the long run the South Korea deal may still be the bigger prize for Florida. The agreement with the world's 13th largest economy is the biggest since the North American Free Trade Agreement with Mexico and Canada in 1994.
"Korea, it's had higher barriers in the past. It's a bigger economy and it's a more advanced economy. If you look at the service sector and the goods sector, it's just a bigger package," he said. But, Sandler said, the Latin American connection will remain key.
"We're already doing businesses with Korean companies' managers for products with distribution in Latin America," he said. "Once they like doing business with you, they'll likely like to create new business, and that's what we're hoping for."
Source: www.businessweek.com
The agreements approved last week will eliminate tariffs on U.S. products, help protect intellectual property and improve access for American investors in those countries. Experts say they could boost the nation's exports by $13 billion and the Obama administration says it will add at least 70,000 new jobs for Americans. Working out the final details with the other countries could still take several months.
While much of the national attention has focused on the South Korea deal, in Florida the immediate focus is on the Colombian.
About 16 percent of Florida's economy is based on international business, and at $4.5 billion, Colombia is the state's fourth-largest export market after Brazil, Switzerland and Venezuela.
Joseph Reagan Jr., a vice president for the Baltimore-based Wexford Science and Technology, said the timing of the deal is excellent, as his company seeks to fill its new Miami Life Science & Technology Park. The biotech center was inaugurated last month in Miami's downtown health district.
"A lot of the growth in biotech and life sciences is going to happen in Latin America as their economies grow," Reagan said, noting that biotech firms are also increasingly looking to conduct clinical trials in Latin America. "The free trade agreements are bound to increase traffic through Miami, and we hope to grab the appropriate piece of that for the life sciences."
Among the park's new tenants is Andago, the Spain-based information technology company that is developing an internet-based medical records program with Google. More than a dozen other biotech, intellectual property law and transport firms, have also recently moved in, most with an eye on Latin America, he said.
Meanwhile, Goya Foods is opening a new, state-of-the-art distribution center in Miami next week, which will focus in part on ramping up distribution to Colombia and Central America.
Joe Perez, a senior vice president for the Secaucus, N.J.-based company, said Goya planned the new center before the deal was reached based on growing demand, but the trade agreements provided further incentives.
"First off, we import many raw good from Colombia: blocks of brown sugar, cookies, crackers, beans and chocolate. Second, is our ability to get our product into Colombia," he said.
He called Colombia "a growing market with huge potential. Its population has reached about 39 million, it has a sizeable middle class and a string of urban centers.
"Florida is a natural departure point," he added.
The trade agreements' most immediate affect will actually be on imports, not exports. That's because Congress also retroactively renewed a decade old Andean trade deal signed during the height of the Colombian drug war to promote legitimate industries. That deal waived duties on many agricultural products like cut flowers, about 90 percent of which the U.S. imports. The majority -- about seven cargo jet loads daily -- come through Miami International Airport.
The Andean deal, which had to be renewed every two years, expired in February, jacking up the cost for importers. The Colombia Free Trade agreement will make the duty-free provision permanent.
"This provides sustainability for our business, because now we have the duty-free status forever. We can plan better," said Daniel Sabogal, president of Fantasy Farms, a Miami-based flower importer and distributor. "Now we can focus on growing our businesses."
Lee Sandler, chair of the Florida Chamber of Commerce's International Committee, says in the long run the South Korea deal may still be the bigger prize for Florida. The agreement with the world's 13th largest economy is the biggest since the North American Free Trade Agreement with Mexico and Canada in 1994.
"Korea, it's had higher barriers in the past. It's a bigger economy and it's a more advanced economy. If you look at the service sector and the goods sector, it's just a bigger package," he said. But, Sandler said, the Latin American connection will remain key.
"We're already doing businesses with Korean companies' managers for products with distribution in Latin America," he said. "Once they like doing business with you, they'll likely like to create new business, and that's what we're hoping for."
Source: www.businessweek.com
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