California is one of the 10 largest economies in the world with a gross state product of over $1.7 trillion. International related commerce accounts for approximately one-quarter of the state’s economy. Although trade is a nationally determined policy issue, its impact on California is immense. In 2007, California exported to 222 foreign markets. Trade offers the opportunity to expand the role of California’s exports. In its broadest terms, trade can literally feed the world and raise the living standards of those around us.

Global Trade Facts

According to the most recent statistics released by the World Trade Organization (WTO), 2006 witnessed robust growth in the world economy and vigorous trade expansion.  Global gross domestic product (GDP) growth accelerated to 3.7 percent, the second best performance since 2000.  All major regions recorded GDP growth in excess of population growth.

Economic growth in the least developed countries continued to exceed 6 percent for the third year in a row. A large part of the 2006 stronger global economy was attributable to the continued recovery in Europe.  The U.S. economy maintained its overall expansion.  In Japan somewhat faster economic growth was achieved.  China and India continued to report outstandingly high economic and trade growth.

Strong economic fundamentals in many key economies contributed to stronger investor confidence worldwide.  The more favorable investment climate also reflected a sharp rise in global foreign direct investment (FDI) flows in 2006. 

In 2006, world merchandise exports grew by 8 percent, compared to 6.5 percent in the preceding year. 

U.S. Trade Facts

According to the U.S. Department of Commerce, the United States is the world’s largest economy and the largest market.  In 2007, U.S. exports of goods and services grew by 12.2 percent from $1 trillion to $1.6 trillion, while U.S. imports increased 5.9 percent to 2.3 trillion.  Although trade contributed 25 percent of the U.S. economic growth in 2007, the annual trade deficit declined for the first time since 2001.

Exports comprised 12.3 percent of U.S. GDP in the fourth quarter of 2007.  Historically, exports were only 9.6 percent of U.S. GDP in 2002 and 5.1 percent of U.S. GDP in 1967.  The largest export markets for U.S. goods in 2007 were Canada ($248.9 billion, up 7.9 percent), Mexico ($136.5 billion, up 1.9 percent), China ($65.2 billion, up 18.2 percent), and Japan ($62.7 billion, up 5.1 percent).

California Trade Statistics

The U.S. Department of Commerce reported that, in 2007, California exports amounted to over $134 billion. This is an increase from the 2006 total of nearly $127 billion. California maintained its perennial position as a top exporting state.

Exports from California accounted for 12 percent of total U.S. exports in 2007. California's top trading partners are Mexico, Canada, Japan, China and South Korea. California trade and exports translate into high-paying jobs for over one million Californians.

The state leads the nation in export-related jobs. According to the California Business, Transportation & Housing Agency, about one in seven jobs in California is related to trade, with every million dollar increase in trade equaling eleven new jobs.

According to the U.S. Department of Commerce, Bureau of Economic Analysis, in 2005, foreign-controlled companies employed 542,600 California workers, the most of any state. Major sources of foreign investment in California in 2005 were the United Kingdom, Japan, Switzerland, France, and Germany. Foreign investment in California was responsible for 4.2 percent of the state's total private-industry employment in 2005.

About 23 percent, or 123,900 of these workers, were in the manufacturing sector, and these foreign-controlled companies accounted for 8.2 percent of total manufacturing employment in California in 2005.

Top Export Sectors

California is the number one exporter in the nation of computers, electronic products, and sales of food and kindred products. Computers and electronic products are California's top export, accounting for 36 percent of all the state's exports.

California exports of transportation equipment, machinery manufactures and chemicals also grew in 2007.

Mexico
Mexico continues to be California’s number one export market. California exports to Mexico totalled $18.3 billion in 2007. Mexico purchases 14 percent of all California exports.

California’s exports to Mexico are driven by computers and electronic products, which account for 24 percent of all California exports to Mexico. Key exports to Mexico showing growth in 2007 include transportation equipment and fabricated metal products.

Canada
Canada moved up to become California's second largest export market, purchasing 12 percent of all California exports.

Computers and electronic products remained California’s largest exports, accounting for 29 percent of all California exports to Canada. Exports of machinery and chemicals from California to Canada grew in 2007 to total more than $1.7 billion; with transportation equipment and agricultural products continuing to be strong export sectors as well.

Asia-Pacific
California is the largest exporting state to Asia. In 2007, California exported over $55 billion in goods to the region, 41 percent of all California exports and nearly 20 percent of all U.S. exports to Asia.

Japan
California exports to Japan, the world’s third largest economy, totalled $13.4 billion in 2007. Computers and electronic products accounted for 28 percent of total exports.

Japan is the number one source for overall foreign direct investment in California, driven somewhat by the high value of Japanese owned commercial property.

Greater China
California exports to Mainland China totaled $10.5 billion in 2007, an increase from the previous year. Exports to Taiwan and Hong Kong also grew in 2007. Growth in exports of transportation equipment and metal manufacturing goods contributed to the increase in total California exports.

European Union
California exports to the European Union increased slightly in 2007 to total $26.7 billion. California is the top exporting state to Europe. Computers, electronic products and transportation equipment are our leading export sectors to the region. European Union countries purchase nearly 20 percent of all California exports.

Export Totals from California (In $ U.S. millions)