As America’s trade with the Far East – principally China – expanded massively during the 1980s and 1990s, California reaped the benefits as the gateway for both exports and imports.
With trade emerging as a major component of the state’s very diverse economy, traffic and payrolls blossomed at its major ports.
California now is mired in its worst recession since the Great Depression, and international trade has been seriously damaged. Imports and exports through the state’s air and sea ports, the most recent Department of Commerce data show, are running at least one-fifth below last year’s already depressed levels.
Exports in September were the lowest since 2005, notes Jock O’Connell, a University of California trade analyst.
Economists who chart the state’s future assume that, if and when recovery occurs, California will once again reap the benefits of international trade. But will it?
It’s entirely possible that California will never again see the level of international commerce that it experienced during mid-decade.
The flow of international cargo is changing in ways that may bypass California, and the state’s politicians seem bent on making shipping increasingly expensive.
East Coast ports have been expanding their ability to handle waterborne shipments directly to and from Asia, without cargoes having to be transshipped by rail or truck. The route will grow even more viable in a half- decade, when a much- expanded Panama Canal begins handling much- bigger container ships.
Vancouver, British Columbia, has also boosted its cargo capacity and is offering Asian shippers direct access to the Midwest, a hotly competitive market.
Meanwhile, California politicians, especially those representing the Los Angeles-Long Beach port complex, have largely adopted the posture that ports are a nuisance, creating noise and air pollution. They have championed new fees to offset the impacts.
Just last week, Sen. Dean Florez, a Democrat who represents the San Joaquin Valley but wants to become lieutenant governor, staged a hearing at the Port of Los Angeles to air local complaints about effects of port traffic.
While paying lip service to the ports’ importance, Florez declared that it’s important “to ensure that those profits do not come at the expense of the health of surrounding communities.”
Los Angeles Mayor Antonio Villaraigosa, meanwhile, is carrying water for the Teamsters union, trying to force independent truckers to become employees and join the union under the rubric of fighting pollution.
The politicians seemingly don’t understand that California ports are in a highly competitive global market. Even a minor differential in costs, a few dollars per container, can send business and jobs away.
We simply cannot assume that we will prosper because we’re Californians. Those days are gone forever.