SIDEBAR TO COSTCO
After years of double-digit expansion, international trade growth in Southern California slowed to a trickle in 1996, according to a pair of studies released last week.
Last year, the Los Angeles Customs District which includes the ports of L.A. and Long Beach, L.A. International Airport, Port Hueneme and the Las Vegas airport saw its dollar volume grow to $170.1 billion, up 3.6 percent from the previous year and the slowest rate of growth since 1982.
By comparison, trade grew by 12.5 percent in 1995 and by 13.5 percent in 1994.
Both of the reports one by the Economic Development Corp. of L.A. County, the other commissioned by the L.A. Area Chamber of Commerce attributed the slower growth rate to weakened exports due to the strong U.S. dollar and disappointing performance of several Asian economies.
But the two studies differed considerably on their forecasts for the future.
The LAEDC report released on Tuesday predicts that 1997 will be a “tumultous” year for international trade, pointing to a number of thorny political issues which lie ahead.
Among those issues is growing uncertainty about China, the region’s second-largest trading partner after Japan, whose most-favored-nation status comes up for renewal this year.
The LAEDC study also expressed concerns about anti-free trade sentiments that could affect the U.S. government’s review this year of the North American Free Trade Agreement. Local flashpoints include opposition to the LAX Master Plan for expansion and disputes over the efforts to build a shipping terminal for the China Ocean Shipping Co.
The report acknowledged that international trade is a crucial component of the regional economy, directly accounting for 377,600 jobs.
Nonetheless, it warned that “the days of double digit gains are probably over, and Los Angeles will have to fend off some vigorous challenges to its international trade base.”
The Chamber of Commerce study, completed by Recon Research Corporation and released on Thursday to mark the opening of World Trade Week, was more upbeat.
Despite slower-than-usual growth in 1996, the economies of the region’s Pacific Rim trading partners, which account for 85 percent of international trade through the region, will begin to bounce back in 1997, the study said.
In particular, Japan’s economy has returned to respectable growth levels after four years of below average performance. With a corresponding boom in the economies of Latin America, the region’s trading activity will grow 5 percent to 6 percent next year, according to the report.
The study also pointed to the large number of infrastructure improvement projects under way in Southern California including expansion of LAX’s cargo facilities; the Alameda Corridor; the $600 million Pier 300/400 project at the Port of L.A.; and L.A. Export Terminal, a huge coal and petroleum coke export terminal on Terminal Island.