1. International Trade and its Regional Impact Dr. David J. Molina University of North Texas

2. International Trade and its Regional Impact Late House Speaker Tip O’Neill was known to say “All politics is local” Well it is not difficult to make the argument that all international trade activity is local (and in particular exports and inflow of FDI) Wheat Trade Embargo under President Cater Lockheed’s contracts with Saudi Arabia are very important to Ft Worth, Texas

3. At the National Level Among the many measurements two commonly used are: –Measure of Trade Openness ratio of Exports over Gross Domestic Product –Trade Exposure ratio of the Sum of Exports and Imports over Gross Domestic Product

4. At the State Level We have estimates of State Exports and GSP Exports at the State and Local level determined by either –Origin of Movement –Export Location –Customs Districts Imports

5. Measure of Trade Openness State Ratio of Exports to GSP Export data from International Trade Administration GSP – BEA Total Exports

6. 7 24 10 9 25 11 6 9 26 11 5 9 26 10 6 8 24 12 7 6 22 15 8 0 5 10 15 20 25 30 Number of States 200020012002200320042005 Year Number of States with Varying Degree of Trade Openness (Annual Percentage of Exports to National GSP) Less 3%3% to 6% 6% to 9%Over 9% 8.01%7.27% 6.67% 6.64% 7.02% 7.29%

7. Top 5 States with Top Level of Trade Openness and Greatest Trade Exports STATE% of Exp to GSP STATEExp in $Billions Vermont18.33%Texas128.8 Washington14.33%California116.8 Texas13.11%New York50.5 Louisiana11.56%Washington37.9 Kentucky10.61%Michigan37.6 Sources: Trade Statics, BEA and computations by author

8. Bottom 5 States with least Trade Openness and least trade exports STATE % of Exp to GSP STATE Exp in $Billions Rhode Island2.90%Hawaii1.03 Wyoming2.44% South Dakota 0.94 Montana2.38%D.C.0.83 Hawaii1.91%Montana0.71 D.C.1.00%Wyoming0.67 Sources: Trade Statics, BEA and computations by author

11. Regional Trade Openness 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% New England Mid EastGreat LakesPlainsSouth EastSouth West Rocky Mountain Far West Region Percent 2000 2001 2002 2003 2004 2005

12. Trade Openness in the South West 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% ArizonaNew MexicoOklahomaTexas State Percent 2000 2001 2002 2003 2004 2005

13. Trade Openness With NAFTA 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% New England MideastGreat Lakes PlainsSouth East South West Rocky Mountain Far West Region Percent 2000 2001 2002 2003 2004 2005

14. Trade Openness With NAFTA in the South West 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% ArizonaNew MexicoOklahomaTexas Percent 200020012002200320042005 State

18. Trade Openness With Mexico 200020012002200320042005 New England 0.240.190.200.230.240.23 Mid Atlantic 0.28 0.250.220.250.26 Great Lakes 0.710.740.690.660.720.73 Plains 0.370.400.410.430.470.54 South Atlantic 0.380.340.300.310.330.31 East South Central 0.720.610.600.570.660.79 West South Central 0.720.650.69 0.740.81 Mountain 0.200.180.170.210.240.26 Pacific 0.250.300.200.240.340.38 Border 3.152.712.592.422.502.52 Non-Texas Border 1.491.321.231.111.201.19 Texas 6.575.465.325.025.065.10

19. Trade Openness With Mexico 1988-19962000-2005 Percentage Change New England0.170.2230.05 MidAtlantic0.190.2633.24 Geat Lakes0.400.7176.56 Plains0.290.4351.52 South Atlantic0.190.3371.01 East South Central0.210.66206.33 West South Central0.460.7155.25 Mountain0.130.2163.67 Pacific0.220.2929.93 Border1.822.6545.85 Border w/o Texas0.801.2657.78 Texas4.025.4234.86

20. Measure of State Trade Exposure Ratio of Exports plus Imports to GSP Export and Import Foreign Trade Data from CENSUS by Customs District GSP – BEA

21. Trade Exposure in US and Texas 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% U.S. TotalTexas Nation/State Percent 2000 2002 2003 2004

22. Issues with the construction of The measurement of Trade Openness at the State Level National GSP is not equal to GDP –DIFFERENCE: EXCLUDES: compensation of Federal civilian and military personnel stationed abroad and government consumption of fixed capital for military structures located abroad and for military equipment except domestically located office equipment GSP and GDP often have different revision schedules.

23. Issues with the construction of The measurement of Trade Openness at the State Level Export Data –Unallocated data decreasing but it still remains about 4% –Only OM remains –Using North American Industry Classification System (NAICS) percentage of Texas manufactured exports is 90% of GSP-manufacturing production