If the nationwide downturn has some bite to it, the international trade industry in Los Angeles could be one of the first sectors to feel the impact, according to local economists.

Last week, UCLA forecasters joined a growing list of experts predicting that the longest economic expansion in U.S. history will come to a close next year. The outlook is for a short and shallow recession, probably during the second and third quarters of 2001.

However, if the dollar weakens against other currencies, either because the Federal Reserve Bank lowers interest rates too aggressively or foreign investors pull out of U.S. markets, the huge flow of imported goods arriving at the local ports could slow significantly.

Since international trade has been one of the fastest-growing sectors of the L.A. economy, any substantial drop-off of imports through the ports would be widely felt. Not only would importers and distributors see business declines, truckers, warehouse operators, business services providers, and Realtors, all of whom have been benefiting from the boom in international trade, would feel the impact.

“We still see trade as a plus for the local economy, but if a national recession is going to impact the trade balance, we are going to be affected by it,” said Tom Lieser, senior economist with the UCLA Anderson Forecast.

Lieser and other economists believe L.A. may pass through a relatively benign national recession without much of a hitch. But there are some wild cards that could turn a national soft landing into something more painful, in which case L.A. would feel the pinch.

One of the unknowns is what the Federal Reserve Board will do if and when the economy starts to sputter.

Edward Leamer, director of the UCLA Anderson Forecast, expects the Fed will aggressively step in next year and lower interest rates in order to alleviate the current credit crunch and stimulate the economy.

“We probably will see a 100-basis-points drop in interest rates over the year,” said Leamer. “That’s going to result in a higher rate of inflation and a weaker dollar.”

A weaker dollar, however, would mean imported goods will become more expensive for U.S. consumers, and that is likely to put the brakes on the large volume of consumer goods arriving in the ports of Long Beach and Los Angeles.

In addition, if gross domestic product growth tapers off and perhaps even turns negative, U.S. consumers would feel even less inclined to continue their splurging on imported electronic goods and clothing.

Although a weaker U.S. dollar in theory is supposed to stimulate exports, it is far from certain that businesses in the rest of the world would invest in American-made high-tech equipment if they see the market for their own products shrink.

Asian countries in particular have been exporting their way out of the recession caused by the collapse of the financial markets in those countries, and it’s doubtful those countries could sustain their expansion without U.S. consumer demand.

“The size of the U.S. economy is so large that a recession here is likely to have some global impact,” said Lieser.