California Gets the Short End of the Stick
Faulty trade figures make Texas US' Number One Export State
SACRAMENTO - 02/23/04 - Texas is the country's Number One export state, supplanting California for the first time ever, according to the comprehensive 2003 trade statistics issued recently by the US Census Bureau's Foreign Trade Division.
But, says one Sacramento-based international trade consultant, the statistics are flawed.
"The so-called state of origin statistics don't necessarily indicate where the goods were produced," says Jock O'Connell, a long-time trade analyst, writer, and?business columnist for the Sacramento Bee.
For example, O'Connell told the CalTrade Report, "Texas is reportedly the nation's foremost exporting state, with $98.8 billion in merchandise exports last year in comparison to California's $93.5 billion."
But, he said, "Texas standing is an unfortunate artifact of the way export statistics are collected. It is a method that effectively attributes exported merchandise not to where they were manufactured or grown but to where they began the last leg of their journey abroad."
The Texas figures are inflated by the fact that most US trade with Mexico, which has grown substantially in the decade since NAFTA, is routed through Texas, O'Connell said.
"For a variety of reasons, including a chronic lack of secure warehousing space south of the border, goods en route to either the indigenous Mexican market or (more likely) to the foreign-owned maquiladora sector, are held temporarily in warehouses or distribution centers just north of the border."
Then, once ready for shipment, these goods are often misidentified as exports of the State of Texas, he said.
Texas, which otherwise accounts for 7.5% of America's economic output, is reportedly the source of more than 40% of all US exports to Mexico. That is more than two and one-half times California's share.
"But," O'Connell said, "California's economy is substantially larger than Texas's. Measured by gross state product, California stood at $1.36 trillion in 2001, while Texas's GSP was $764 billion GSP," adding that 2001 is the last year for which gross state product figures are available.
"What is more remarkable is that Texas's total worldwide merchandise exports in 2001 [$94.995 billion] was only slightly larger than its entire output of manufactured goods [$93.754 billion] that year," he said.
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