Los límites de la moral: pecado y atractivo en la transgresión La respuesta

Even with all the challenges that it faces, the Los Angeles area’s international trade industry has the potential to expand its business in coming years. So, where are the opportunities?

Korea-U.S. Free Trade Agreement: Having gone into effect on March 15, 2012, this agreement is a boon to LACD trade activity (particularly over the long term) as the majority of two-way trade container traffic with South Korea comes through the Ports of Los Angeles and Long Beach.

National Export Initiative (NEI): The potential for increased export flows out of the local ports over the next two years is substantial. Southern California is well positioned to expand exports, perhaps more than any other region in the U.S. As demonstrated in the Brookings Institution “Export Nation” report, the Los Angeles Metro Area is already the largest exporting region in the U.S.

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Global Cities Initiative/L.A. Regional Export Plan: The Brookings Institution and JPMorgan Chase & Co. are leading this project across the country. The three

Challenges and Opportunities

core objectives of the Los Angeles export plan include securing and increasing quality jobs in the region driven by export growth, supporting the National Export Initiative, and fostering a more globally-fluent export-oriented business culture in the region, particularly focusing on small- to medium-sized enterprises. China: China’s rapid economic growth will continue to benefit the LACD in the coming years, especially as the size of the Chinese middle class increases. Since China joined the World Trade Organization in 2001, trade flows through the Ports of Los Angeles and Long Beach have jumped dramatically. The effect of the rise of the Chinese middle class is already evident in the composition of LACD exports to China, which are shifting more towards consumer goods and services. This is extremely significant because even if China’s economy experiences a substantial slowdown in the coming years in the form of a reduction in manufacturing and exports, consumer goods exported from the LACD to China will not be seriously affected. The services side presents the best opportunity for growth as royalties from motion pictures, tourism, and education have all been strong performers and will continue on a robust growth path. Other Developing Asian Nations: The LACD’s top developing Asian trading partners are all projected to experience high economic growth rates (especially Southeast Asia) in the coming years. This bodes well for the local ports. These nations are beginning to establish significant middle classes that will demand more U.S. consumer goods. In addition, because of labor cost concerns, U.S. importers have begun to diversify a bit more. Vietnam is a perfect example, having moved up two spots to become the LACD’s sixth largest trading partner. Other trading partners with huge potential are Indonesia, which is currently the LACD’s tenth largest trading partner, India (12th largest trading partner) and the Philippines, (13th largest trading partner). All three of these countries are expected to witness some of the strongest economic and income growth rates in the world over the next four decades. It was not too long ago when none of these economies were even on the radar.

Large Local Market: Nearly 21 million people live in the six Southern California counties, plus there is easy access to fast growing markets in Arizona and Nevada. There are nearly 500,000 business establishments in the region, employing over seven million people. Direct access to such a large consumer market is something that no other U.S. port can offer.

Growth of Latin America: The growth of Brazil and Mexico in particular, present attractive trade opportunities. Other nations in Latin America are also beginning to establish larger middle classes that will increase demand for U.S. goods and services. In addition, U.S. importers have begun to diversify more based on cost issues.

Challenges and Opportunities

LAEDC Kyser Center for Economic Research 45 International Trade Outlook

Panama Canal Expansion: While the expansion of the Panama Canal presents a challenge to the San Pedro Bay ports, it also presents a great opportunity to increase two-way trade with Brazil, other nations in Latin America, and with Europe and Africa as well.

Los Angeles as Gateway and Hub: Los Angeles County is America’s gateway to Asia. Los Angeles County also has the potential to become a viable alternative to Miami as a gateway to Latin America. Both Asia and Latin America are now key components of the global economic growth engine. Latin America has gained prominence as a hot spot for global expansion and investment. As a result, Asian companies are increasingly using their operations in U.S. cities as an entry point to Latin American markets. Asian companies want to facilitate exports to Latin America by getting closer to the Latin American consumer just as they have done with American consumers. They can do this by establishing operations in these countries or alternatively, by leveraging existing operations or establishing new operations in the U.S.

Excellent Transportation Infrastructure: In addition to the seaports (there are three in the five-county Los Angeles region including Port Hueneme in Ventura County), two international airports serve the area. The region has excellent highway and rail connections to the Midwest, Southwest, and Southeast regions of the U.S. Improved rail capacity (all double-tracked) will be critical as businesses “back East” seek the lowest all-in logistics and transportation costs to and from Asia. In addition, the region has warehouse and distribution facilities in the Inland Empire (over 500 million square feet) that attract discretionary cargo destined for other parts of the U.S.

Port Capacity: With major terminal expansions at the two ports coming online in five to ten years, there should be no concern about future capacity.

Rail Capacity: The “Colton Crossing” bottleneck project is nearly complete and will resolve the serious delay issues of the past.

Green Ports: The two ports have been leaders in environmental remediation, and are on their way to becoming the “greenest” ports in the world. It was difficult to attain this status, but it is now a competitive advantage. Other ports will ultimately have to follow the same path.

Statistical Appendix