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Press Release · March 13, 2001

Current U.S. Trade Agenda – High Stakes for California

Current efforts by the United States to ease international trade barriers will affect California more than most other states, according to a study released today by the Public Policy Institute of California (PPIC).

In particular, the outcome of U.S. negotiations with Pacific Rim countries could benefit California’s economy because the state’s trade is far more concentrated in the Pacific Rim region, especially in Asia. In fact, five of California’s top 10 trading partners are Asian countries: Japan, Taiwan, Singapore, South Korea, and Hong Kong are the destination of almost one-third of California’s exports.

According to the study, California’s Vested Interest in U.S. Trade Liberalization Initiatives, current trade negotiations with the Asia-Pacific Economic Cooperation (APEC) Forum are the most critical to California’s export business. “Trade with APEC nations accounts for 70 percent of all California exports,” says Jon Haveman, author of the study and an economist at the Federal Trade Commission’s Bureau of Economics. “As a result, an agreement to eliminate tariffs among APEC-member countries could have a profound effect on California’s economy.”

Other key findings:

  • Past reductions in trade barriers have provided a greater boost to California’s export market than they have in other states.
  • California producers are more likely to export than producers elsewhere in the United States.
  • 54 percent of California exports are electronic equipment and industrial machinery.
  • If successful, the current U.S. trade liberalization agenda – which includes APEC – could eliminate 90 percent of the tariffs now facing California exports.

Please call Victoria Pike Bond at 415/291-4412 or Abby Cook at 415/291-4436 for assistance or further information.

The Public Policy Institute of California is a private, nonprofit organization dedicated to objective, nonpartisan research on economic, social, and political issues that affect the lives of Californians. The Institute was established in 1994 with an endowment from William R. Hewlett.