Dan Richey, an Indian River citrus packer and distributor, is hoping for more grapefruit on Korean tables, and Doral appliance dealer Hector Marulanda would be happy to see his sales of refrigerators and stoves pick up in Colombia.
Florida cattle ranchers, who sell their calves to feedlots in the Midwest, Texas and Oklahoma where they’re fattened up and eventually turned into steaks and hamburgers, expect to benefit from more sales to South Korea. And South Florida flower importers say they’ll save about $2 million a month in duties they now pay on blooms brought in from Colombia.
Florida businesses — both large and small — are poised to take advantage of the potential for increased sales if free trade agreements with South Korea, Colombia and Panama win Congressional approval. After lengthy delays, the Obama administration sent the three trade pacts to Congress last Monday. They’re scheduled for a vote Wednesday.
“President Obama and the business community have made the case to move for passage as quickly as possible,’’ Francisco Sánchez, U.S. undersecretary for international trade, said last week as he made a quick stopover in Miami en route to the Americas Competitiveness Forum in the Dominican Republic. “All three have the votes for passage.’’
The agreements would phase out duties on all products the three countries trade with the United States, and President Barack Obama has touted them as job creators. The administration calculates that the agreement with South Korea alone will generate $11 million in additional trade and create 50,000 jobs.
Although Korean farmers took to the streets of Seoul last week to demonstrate against the trade pact with their country, it is the free trade agreement with Colombia that is facing the most opposition in the United States. Organized labor and human rights advocates complain that Colombia is still one of the most dangerous places in the world for union activists. Despite an action plan approved by the U.S. and Colombia that sets a timetable for specific reforms, they say more needs to be done to protect unionists.
Organized labor will continue to fight the trade deals until the last minute, said Amaya Tune, a spokeswoman for the AFL-CIO. More than 100 union members blanketed Capitol Hill last Tuesday in an effort to persuade members of Congress to vote against the deals.
As a sweetener, the administration insisted that renewal of Trade Adjustment Assistance, a program that offers training and other benefits to workers displaced by foreign competition, move to Congress along with the trade pacts.
But Tune said it wasn’t enough to win union support and wouldn’t be needed if the trade pacts truly created jobs.
Still, the trade deals have bipartisan support and are likely to sail through Congress. Both Florida’s senators, Democrat Bill Nelson and Republican Marco Rubio, support the agreements as do most House members from Florida.
Fabio A. Andrade, founder and president of the Americas Community Center in Weston, is counting on quick passage. He’s already scheduled a series of seminars beginning in mid-November to explain the opportunities the pacts offer to small businesses.
Andrade — who is the local manager for Aires, an airline that flies daily between Fort Lauderdale and Bogotá— is also expecting air traffic to pick up with passage of the Colombia deal. “Definitely,’’ he said. “Now people will be looking at Colombia for business opportunities.’’
Marulanda — owner and president of Impel Appliances Gallery, which sells high-end Sub-Zero and Wolf brands — also anticipates more business. Colombian duties of between 17 and 35 percent on his products make it hard to compete now. “I sell about 10 pieces a month in Colombia,’’ Marulanda said. “With the FTA, we’ll sell hundreds.’’
Bill Johnson, director of the Port of Miami, figures the port will benefit from all three agreements — especially with the $2 billion in infrastructure improvements under way at the port.
“In the short term, Colombia has the greatest potential for growth,’’ he said. “In the longer term, we would expect some very nice growth from South Korea.’’ Panama is a smaller market, but with the expansion of the Panama Canal, it will become more of a trans-shipment hub, Johnson said, and “there could be very interesting long-term impact from a free-trade agreement.’’
The Obama administration calculates that every $1 billion in new merchandise exports generates more than 6,000 jobs at home and that every $1 billion in new service exports generates about 4,500 jobs.
Johnson said that will mean additional jobs for truckers, customs brokers and freight forwarders, shippers, stevedores, farmers and a wide range of companies involved in international commerce.
But none of those new jobs will come immediately.
Because changes have been made in all three agreements, especially the Colombia and Panama pacts, once they’re approved by the U.S. Congress, they’ll have to go back to legislatures in the three countries for ratification. Then there will be a delay as the framework for implementing the agreements is put in place.
The whole process could take 18 months, said Christine Boldt, executive vice president of the Association of Floral Importers of Florida. That’s why local flower importers are happy an interim measure has been attached to the Colombia FTA that would immediately eliminate duties on Colombian flowers, retroactive to February.
But duties on all products won’t be wiped out over night. The 54 percent Korean tariff on frozen orange juice will go away as soon as the FTA is implemented, for example, but the 30 percent duty on grapefruit will be reduced in five equal installments over five years. For some products, it will take 10 years before all tariffs are eliminated.
Even without the Korea FTA in place, Florida has been courting South Korea’s 49-million consumers. This past spring, the Florida Department of Agriculture and the Department of Citrus held a grapefruit promotion at Korean supermarket chains E-Mart and Hyundai, handing out slices of fresh fruit to shoppers.
“Korea is definitely an up-and-coming market for our exports. Our growers are very interested,’’ said Nancy Brown, international marketing manager at the Department of Citrus. Last season, Florida exported 235,000 cartons of grapefruit to South Korea, making it a top market.
In the early 1990s, South Korea was a booming market for Florida grapefruit exports, said Richey, president of Riverfront Citrus Packing in Vero Beach. But Korean farmers, he said, used the scare over Alar, a chemical once used on U.S.-grown apples, to keep grapefruit out of the market and retain more shelf space for local fruit. “We never even used Alar; it has no use for citrus,’’ he said.Slowly over the last few years, Richey said, Riverfront has begun to rebuild its Korean grapefruit business. “Any reduction in tariffs with the FTA will be a great benefit for us in terms of market access,” he said.
The Florida Cattlemen’s Association also has designs on the South Korean market. “The Korea market is huge; it’s already the fourth largest in terms of value for U.S. beef and pork exports,’’ said Jim Handley, executive vice president of the association. While Florida doesn’t directly export beef, “any time a market opens up, it trickles down to us,’’ said Handley.