We can start with this: Venezuela continues to be something of a mess.
It’s a mess for any of South Florida’s roughly 1,400 multinationals still trying to conduct business there, particularly as they try to get cash out, and it’s a mess for any of those in the import-export trade community trying to navigate a difficult system in difficult times.
The cellphone will be a metaphor for this mess, as I will show in just a moment.
But first, as bad as things are, Venezuela remains South Florida’s eighth most important trade partner, accounting for slightly less than $1.5 billion of trade through the first five months of the year, according to WorldCity analysis of U.S. Census Bureau data. It is Port Everglades’ third most important trade partner — gasoline and other refined petroleum products enter there.
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This is the eighth in a series of analyses of South Florida’s top 10 trade partners. Previous columns have focused on Brazil, Colombia, China, the Dominican Republic, Chile, Honduras and Peru, respectively.
U.S. rank: One year ago at this time, Venezuela was the United States’ 19th most important trade partner, with $16.93 billion in two-way trade. This year, it has fallen 10 positions to rank No. 29, its trade having fallen 37.51 percent at a time when U.S. trade with the world is down 4.44 percent.
Granted, some of this is outside of Venezuela’s control, the South American nation the victim of rising U.S. production of oil and natural gas and a resultant downward pressure on oil and gasoline prices. But a fair amount of it is self-inflicted, the result of the policies of former President Hugo Chávez and his successor and the current president, Nicolás Maduro.
In fact, Venezuela’s U.S. trade has fallen more over the past five years — $7.25 billion — than any nation in the world except Nigeria, another oil producer. Only one nation trade that is ranked above Venezuela has seen its trade fall over the same five-year period — everyone else is in the black. That one nation is Vladimir Putin’s Russia. Russia, ranked No. 28, has seen its trade fall $862.48 million through the first five months of the year, when compared to the same period five years ago.
Over the past decade, even Russia’s U.S. trade has grown. But not Venezuela, which along with Nigeria are the only two nations in the world where trade has fallen more than $4 billion.
South Florida trade: The South Florida picture is actually a little brighter. But first the bad news: In 2008, Venezuela ranked as South Florida’s third most important trade partner through May, with $2.42 billion in two-way trade. Today, it ranks No. 8.
Over the past five years, only Switzerland and Costa Rica have seen their trade fall more than Venezuela’s, with the former resulting from a cooling in the gold trade and the latter resulting from Intel’s decision to shift some production from Costa Rica to Malaysia and some distribution to Houston from South Florida.
Over the past decade, only the Netherlands’ trade has fallen more than Venezuela’s through the first five months of the year, down $70.45 million and $63.76 million, respectively. During this same 10-year period, South Florida’s trade with the world has increased $19.56 billion.
And now, what will have to pass as the good news: South Florida’s trade with Venezuela is down a mere 11.66 percent when compared to the same five-month stretch of 2014. That’s small potatoes compared to the U.S. decline of 37.51 percent.
Importance to South Florida: Venezuela remains important to South Florida, of course. Through the first five months of the year, it accounted for 3.30 percent of all South Florida trade with the world. That might not sound like much, but bear in mind that No. 1 Brazil is the only trade partner in double digits and that South Florida’s $45.47 billion in trade through May is split among 222 nations of the world, all the way down to $2,550 with the small Pacific island nation of Tokelau.
Although Venezuela is important to South Florida, it is, not surprisingly, less important. In 2007, it accounted for 7.22 percent of all South Florida trade through the first five months of the year, wielding far greater importance. It fell below 7 percent the next year, below 6 percent in 2010, and below 5 percent in 2011. It has been below 4 percent since last year.
South Florida competition: Considering Venezuela is a Latin American nation, South Florida is less important, relatively speaking, to it. Although South Florida ranks as the No. 1 gateway for U.S. trade with many Latin American nations and No. 2 with most of the rest, it ranks No. 4 with Venezuela, trailing No. 1 Houston, No. 2 New Orleans and No. 3 Port Arthur, Texas — all oil importers, of course. And those three oil-importing Customs districts are getting walloped when it comes to trade with Venezuela, down 29.21 percent, 42.89 percent and 51.59 percent, respectively.
South Florida exports to Venezuela: Interestingly enough, South Florida exports to Venezuela are actually up this year, at a time when exports to the world are down. With overall exports off 4.19 percent, outbound shipments headed to Venezuela are up 2.82 percent to $1.09 billion. The good news is that the new No. 1 export is motor vehicles. The bad news is that South Florida cellphone exports have fallen from $353.19 million in 2011 to $20.30 million. That’s a country whose people are hurting.
South Florida imports from Venezuela: Refined petroleum — gasoline, jet fuel and other products — accounts for more than 75 percent of the value of all Venezuelan imports into South Florida. In May 2011, that total was $810.33 million. This year, the total is $323.54 million. Political ineptitude aside, this crushing decline of oil and gas import revenues into the United States — in South Florida and elsewhere — is having a devastating impact on Venezuela.
Surplus/deficit: South Florida had a $672.08 million trade surplus with Venezuela through May of this year. It peaked in 2008 at $2.04 billion after having topped $1 billion four of the previous five years.
Coming next: Costa Rica is, like Venezuela, a grim picture, from a trade point of view. The storyline, however, is far different, one of the rapid changes wrought by globalization.
Reach Ken Roberts, president of World City, at firstname.lastname@example.org
Venezuela trade in a downward spiral
Port Arthur, Texas
New York City
Source: WorldCity analysis of U.S. Census Bureau data
*Low-value shipments are those under a certain dollar-value threshold. They are not assigned to a specific Customs district.