A signed and sealed Free Trade Area of the Americas pact could mean more than the spread of goods and markets throughout the Western Hemisphere.
It also could mean big bucks for Florida.
Enterprise Florida, the state's economic development agency, has predicted that, if FTAA becomes a reality and Miami is its headquarters, the state's economy will receive a boost of $13.6 billion.
The FTAA, which involves 34 of the 35 nations in the Americas and the Caribbean (Cuba is the exception), is scheduled to be implemented by 2005. The next major meeting in the agreement talks is a ministerial gathering in Miami set for Thursday and Friday. From 20,000 to 100,000 protesters opposing the worldwide push for global trade agreements are expected in Miami beginning today.
If Miami lands the secretariat, spillover into tourism and real estate in Palm Beach County and the Treasure Coast is inevitable, said Al Zucaro, president of the West Palm Beach-based World Trade Center Palm Beach and the Treasure Coast.
"We are only 66 miles up the road from where this is going to be in downtown Miami," Zucaro said. "I buy into the belief that thousands of people would be spending considerable amounts of time in our marketplace. They don't necessarily have to be located on Brickell Avenue or in North Miami."
More difficult to foresee is how the free trade agreement itself, no matter where the secretariat is located, might impact area businesses.
The state's citrus and sugar cane growers oppose the FTAA, largely because of Brazil, the world's largest producer of oranges and sugar cane. Tariffs protect the citrus juice industry in Florida, and sugar has the benefit of quotas that limit imports.
Growers believe that, if the barriers are removed under FTAA, their industries will be largely overwhelmed by cheaper products from the South American nation.
At first glance, an end to tariffs and other cumbersome trade restrictions could be a boon for other types of businesses, such as manufacturers who export.
According to Harris Directory statistics, of the approximately 18,000 manufacturers in Florida, 1,135 are in Palm Beach County, with 139 of them exporting; 194 are in Martin County, with 20 exporting; 326 are in Indian River, Okeechobee and St. Lucie counties combined, with just six exporting. Those figures do not include companies that might distribute goods made elsewhere for export.
Companies based here have mixed opinions as to whether expanded free trade with Latin America will boost their business.
Sharon Rinehimer, vice president for international business development at RGF Environmental Group in Riviera Beach, says passage of the FTAA could open markets such as Brazil for her company, which makes industrial water-treatment and food-purification systems.
"It would definitely help us," Rinehimer said. "One reason we don't trade with Brazil is that they get equipment cheaper from Germany. A lot of countries complain about import duties being high on our equipment."
She recalls one bid the company lost out on that would have resulted in "several hundred thousands of dollars" worth of business.
"We were dealing with the biggest chicken processor in Brazil, which exports to the Middle East. They were looking at our equipment. They did something cheaper," said Rinehimer, whose company makes about 500 environmental products.
After the implementation of the North American Free Trade Agreement, which opened trade among the United States, Canada and Mexico in 1995, RGF gained more business through distributors in Canada and Mexico, she said
But at Sign-A-Rama, a West Palm Beach-based sign company with franchisees in 25 countries, international director Tony Foley said NAFTA didn't make a difference for him, and he doesn't think FTAA will, either.
"We analyzed where is the next best area to go into. South America is in the toilet right now," Foley said. "We've turned our sights to Europe."
At the Port of Palm Beach, business with the Americas and the Caribbean has been improved by the Caribbean Basin Initiative, enacted in 1983.
Most of the port's outside trade is done with Caribbean nations, and that's not likely to change with the FTAA, said Richard Wainio, the port's executive director.
"You have to keep in mind the limitations of the port here. We are not able to handle the larger container vessels," he said. "If you are talking about moving large quantities of goods from South Florida and goods from Brazil, they move on vessels we cannot serve.
"The bottom line is, we support free trade. The more international trade there is, the more business potentially you have for the port," he said.
John Pugsley, operations director for Riviera Beach-based K-Rain Manufacturing Corp., believes the head start the Caribbean nations have gained through the Caribbean Basin Initiative will work to their advantage.
Four years ago, K-Rain moved its parts assembly operations to the Dominican Republic and two years ago opened its own facility there, where it employs 200.
Gear-driven sprinkler parts made by a variety of plastic injection molding companies in South Florida are shipped to the Dominican city of Santiago for assembly. They are sent back to Riviera Beach for packing and distribution. The advantage to assembling in the Dominican Republic is cheaper labor.
"Labor is a one-to-10 advantage," Pugsley said. "The minimum wage down there is $1.10 an hour."
Pugsley said K-Rain had to find a way to cut costs as its competitors, including California-based irrigation industry giants Rain-Bird, Toro and Hunter, began manufacturing in Mexico and China. At the same time, the company, which employs 60 people in Riviera Beach, wanted to preserve some South Florida jobs and maintain growth.
The World Trade Center's Zucaro sums up the FTAA potential for area businesses:
"I see it as a growth opportunity for our manufacturers," he said. "The breakdown of tariffs and restrictions would give our manufacturers greater pause to consider new marketplaces. It is a positive."
susan_salisbury@pbpost.com
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