1. Trade Response to Global Downturns Marney Cox Chief Economist SANDAG March 2010 Marney Cox Chief Economist SANDAG March 2010

2. US Trade Growth Outpacing GDP (Cumulative Growth Rate 1992-2008 current $)

3. 3 Global Recession’s Impact on Trade (findings from World Bank Report, August 2009)  Elasticity of Trade Value to GDP is near 4.0  Trade values fall more than volumes  Mean recovery time to previous peak 4 years  Impacts vary across industries Least severe: consumer products—food and beverages Most severe: durable commodities—iron and steel  Following crisis deficit or surplus conditions return

4. US GDP-Measuring the Decline (Index Q-O-Q Change from start of recession) Start of Recession Quarters

5. US Real Exports-Measuring the Impact (Index Q-O-Q Change from start of recession) Start of Recession Quarters

6. US Real Imports-Measuring the Impact (Index Q-O-Q Change from start of recession) Start of Recession Quarters

7. What’s Ahead?

8. US Continues to Shed Jobs (Index M-O-M Change from start of recession ) Start of Recession Months

9. US Household Credit Debt Outstanding (Billions $)

10. US Savings Rate Rising (Monthly, SAAR)

11. Shape of Recovery & Role of Trade  V, U, W…Nike swoosh…gradual & slow  Orthodox view…trade recovery is slow  Value of trade falls more than volume  Commodity and asset prices under pressure  Majority of trade is intermediate goods  Falling prices can increase trade volume

12. 12 SD Economic Opportunity is Knocking at California’s Southern Door  Mexico is CA largest export market  Otay Mesa is CA/MX busiest trade border crossing  1.5 million trucks per year $36B in trade  95% of regional freight movement is carried by truck

13. SD Value of Trade Has Nearly Tripled (San Diego Customs District, $Millions)

14. SD Trade Growth Outpacing GRP (Cumulative Growth Rate 1992-2008 current $)

15. SD Otay Mesa Commercial POE Current ”Congested” Conditions 4.36 million working hours of delay annually

16. $1,256 $2,069 SD Border Delays Reduce Trade…and (Delay range: autos 45 min.-2hrs. Trucks 2hrs.-6hrs.) $0 $4,000 $8,000 $12,000 $16,000 Exports to MexicoImports from Mexico $9,382 $13,793 Output (in millions) Lost Export Opportunities = 13% Lost Import Opportunities = 15%

17. …Economic Growth (Border Delay Annual Impact to United States & Mexico) 73,900 JOBS LOST = $8.63 Billion in OUTPUT LOST = 23 Super Bowls 4 ½ Google Companies

18. SD SR11 Project Study Area

19. SD SR11 Project Progress » Toll Legislation Approved – SB 1486 (Ducheny) » U.S. Presidential Permit Approved » Exchange of Diplomatic Notes with Mexico » Tier I Program EIS/EIR Approved » Scoping Document: Project Study Report » Transportation Border Congestion Relief Program (TBCRP) Designation

20. Programmed Funding Available: State (STIP)Tier II Env./Eng.$13.0 M Federal (SAFETEA-LU)Tier II Env./Eng.$.8 M State (Prop. 1B TCIF)Construction$75.0 M Total $88.8 M Remaining Funds Needed: (Toll Funds/Other): $526.2 - 626.2 M SD SR11 Estimated Project Budget: $615-$715 Million

21. Develop Financial Strategy2009 Tier II Environmental Doc.2010 Design/Right of Way2011 Begin Construction2012-13 Open New Trade Gateway2014-15 SD SR11 Project Schedule

22. Trade Response to Global Downturns Marney Cox Chief Economist SANDAG March 2010 Marney Cox Chief Economist SANDAG March 2010