(May 22, 2009) As we celebrate the nationally observed World Trade Week, May 17-23, the importance of international trade to the U.S. economy is clear, as are the benefits of a healthy export market.

“Trade is a major element of our economy already,” notes U.S. Trade Representative Ron Kirk. “Exports accounted for a record 13 percent of our gross domestic product last year. In the three years leading up to the global recession, export expansion accounted for almost half—47 percent—of America’s overall GDP growth.”

In 2008, California exports totaled $145 billion, according to the U.S. Department of Commerce. This was an increase from the $134 billion in 2007.

Exports from California accounted for nearly 12 percent of total U.S. exports, with Mexico, Canada, Japan, China and South Korea being the state’s top trading partners. California maintained its perennial position as a top exporting state, exporting to 229 foreign markets.

Trade Agreements Help

Because roughly 95 percent of the potential customers for U.S. goods and services live outside our borders, increasing exports will continue to generate critical economic growth.

Agreements like the proposed U.S.-Panama Free Trade Agreement (FTA), U.S.-Colombia FTA and U.S.-Korea FTA ensure that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans.

All these agreements are critical elements of the U.S. strategy to liberalize trade through multilateral, regional and bilateral initiatives. Passage of these FTAs will mean the elimination of billions of dollars in tariffs for U.S. exports, as well as increased market visibility, and will benefit California and the United States as a whole.

Significant increases can be seen in the bilateral trade between the United States and the countries with which FTAs were enacted in 2006 and 2007:

The U.S.-Morocco FTA went into effect at the beginning of 2006. U.S. exports to Morocco rose from $1.34 billion in 2007 to $1.52 billion in 2008, an increase of more than 13 percent. In 2008, California exported more than $90 million to Morocco, almost double the amount exported in 2007. California’s main exports to Morocco are computers and electronic products.

The U.S.-Oman FTA took effect on September 26, 2006. In 2008, bilateral trade between the United States and Oman totaled more than $2.2 billion. U.S. goods exports to Oman rose to $1.4 billion in 2008, a 28 percent increase from 2007. California exports to Oman were more than $70 million in 2008.

The U.S.-Bahrain Free Trade Agreement was signed on August 1, 2006. Two-way trade between the United States and Bahrain topped $1.37 billion in 2008. U.S. goods exports were $829 million, a 40 percent increase from 2007, including vehicles, machinery, aircraft, toys and other manufactured products. California exports to Bahrain in 2008 were more than $58 million.

Just the anticipation of the U.S.-Peru FTA, signed in December 2007, caused a spike in bilateral trade with Peru. Total trade in 2007 between Peru and the United States was more than $9 billion. In 2008, the United States exported $6.2 billion worth of goods to Peru, a 51 percent increase from 2007 and a 110 percent increase from 2006. According to the U.S. Department of Commerce, in 2008, California exported $241 million to Peru, making it the state’s 46th largest trading partner.

International Commerce

The numbers underscore the continuing importance of maintaining the health of international commerce for California and the nation.

While the U.S. House of Representatives considers the FTAs with Panama, Colombia and South Korea, the California Chamber of Commerce and other supporters of the agreements will continue to fight for their approval and upholding the nation’s international obligations.

Addressing a global audience, President Barack Obama stated, “We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation. Once and for all, we have learned that the success of the American economy is inextricably linked to the global economy. There is no line between action that restores growth within our borders and action that supports it beyond.”

The CalChamber supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.

Susan Corrales-Diaz, chair of the California Chamber of Commerce Council for International Trade, is president of Systems Integrated in Orange.