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China, Japan, South Korea rank as region’s Top Three trading partners

LOS ANGELES – 06/20/07 – International trade activity in Southern California is building to record levels in 2007 despite slower growth in the US economy, according to a new study compiled by the Los Angeles Economic Development Corp. and released by the World Trade Center – Los Angeles-Long Beach (WTCLA-LB).

According to the report – International Trade Trends & Impacts – “the  total number of containers handled at the Ports of Los Angeles and Long Beach should increase by 9.2% to 17.2 million TEUs (twenty-foot container equivalent units).”

By way of comparison, the two ports handled 9.5 million TEUs in 2000.

The total value of two-way trade at the Los Angeles Customs District in 2007 should grow by 13.9% to $375.1 billion.

“Exports out of the Customs district should continue to grow rapidly, rising by 15%, due to the weakness in the US dollar combined with favorable economic conditions in the region’s major trading partners,” said the report.

The ports of Los Angeles and Long Beach, it said, retained their number one ranking among the nation’s ports in number of containers handled during 2006, while the adjacent ports ranked fifth globally in container activity.

At the same time, the Los Angeles Customs District retained its first place ranking in the US in total two-way trade value.

Last year, Los Angeles recorded a 12.1% increase to $329.4 billion. New York remained in second place with a 10.3% gain to $295.0 billion.

China continued to widen its lead as the Los Angeles Customs District’s top trading partner last year with a 15.6% increase to $126.0 billion in two-way trade.

Japan remained in second place in this measure with a 9.1% gain to $50.7 billion with South Korea ranked third, recording a 15.6% increase to a two-way trade total of $20.7 billion.

The largest export commodity out of the Los Angeles Customs District in 2006 was “electrical apparatus,” with a value of $12.1 billion. The top import commodity was electronic machinery with a value of $34.3 billion.

International trade continued to be a reliable employment generator for the Los Angeles five-county area, adding 35,000 good quality jobs in 2006, the study said.

But, it said, “despite all this good news, international trade [activity] in Southern California continues to face a daunting array of challenges that could crimp its growth potential.”

For example, international trade has been fiercely criticized about its environmental impacts due to its heavy use of diesel power.

“Several mitigation efforts are underway, but there needs to be better communication about them to the region’s population,” the report said, adding that land-side transportation capacity is under extreme pressure, but paying for projects to alleviate them will be expensive.

Container fees have been proposed, but there has been a “push-back” by various groups.

Port and transportation workers are waiting for implementation of the much-delayed Transportation Worker’s Identification Credential (TWIC), while concerns grow over both its cost and possible impact on port truckers.

Another issue on the horizon is the current labor contract between West Coast shippers and the longshoreman’s union, which is scheduled to expire in June 2008.

“The industry has to not only communicate more effectively with local residents, they have to start telling the story nationally that almost everybody in the nation depends on Southern California’s international trade [activity],” the report concluded.

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