# Presentation: 550529

## International Trade and its Regional Impact

- Dr. David J. Molina
- University of North Texas

## 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*

## 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

## 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

## Measure of Trade Openness State

- Ratio of Exports to GSP
- Export data from International Trade Administration
- GSP – BEA
- Total Exports

## Year

**7**

**24**

**10**

**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**

**2000**

**2001**

**2002**

**2003**

**2004**

**2005**

**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%***

## Slide 7

| Top 5 States with Top Level of Trade Openness and Greatest Trade Exports  |  |  |  |
| --- | --- | --- | --- |
| STATE  | % of Exp
 to GSP  | STATE | Exp in $Billions  |
| Vermont | 18.33% | Texas | 128.8 |
| Washington | 14.33% | California | 116.8 |
| Texas | 13.11% | New York | 50.5 |
| Louisiana | 11.56% | Washington | 37.9 |
| Kentucky | 10.61% | Michigan | 37.6 |
| Sources: Trade Statics, BEA and computations by author |  |  |  |

## Slide 8

| Bottom 5 States with least Trade Openness 
and least trade exports  |  |  |  |
| --- | --- | --- | --- |
| STATE  | % of Exp
 to GSP  | STATE | Exp in $Billions  |
| Rhode Island | 2.90% | Hawaii | 1.03 |
| Wyoming | 2.44% | South Dakota | 0.94 |
| Montana | 2.38% | D.C. | 0.83 |
| Hawaii | 1.91% | Montana | 0.71 |
| D.C. | 1.00% | Wyoming | 0.67 |
| Sources: Trade Statics, BEA and computations by author |  |  |  |

## Slide 9

## Slide 10

## Regional Trade Openness

**Regional Trade Openness**

*0.00%*

*2.00%*

*4.00%*

*6.00%*

*8.00%*

*10.00%*

*12.00%*

*14.00%*

**New**
** ****England**

**Mid East**

**Great Lakes**

**Plains**

**South East**

**South**
** ****West**

**Rocky**
** ****Mountain**

**Far West**

**Region**

**Percent**

**2000**

**2001**

**2002**

**2003**

**2004**

**2005**

## Trade Openness in the South West

**Trade Openness in the South West**

**0.00%**

**2.00%**

**4.00%**

**6.00%**

**8.00%**

**10.00%**

**12.00%**

**14.00%**

**16.00%**

**Arizona**

**New Mexico**

**Oklahoma**

**Texas**

**State**

**Percent**

**2000**

**2001**

**2002**

**2003**

**2004**

**2005**

## Trade Openness With NAFTA

**Trade Openness With NAFTA**

***0.00%***

***1.00%***

***2.00%***

***3.00%***

***4.00%***

***5.00%***

***6.00%***

***7.00%***

**New**
** ****England**

***Mideast***

***Great***
*** ******Lakes***

**Plains**

***South***
***East***

**South**
**West**

**Rocky**
**Mountain**

**Far West**

**Region**

**Percent**

**2000**

**2001**

**2002**

**2003**

**2004**

**2005**

## Trade Openness With NAFTA in the South West

**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%***

**Arizona**

***New Mexico***

***Oklahoma***

***Texas***

**Percent**

**2000**

**2001**

**2002**

**2003**

**2004**

**2005**

**State**

## Slide 15

## Slide 16

## Slide 17

## Slide 18

## Slide 19

## 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

## Trade Exposure in US and Texas

**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. Total***

***Texas   ******                   ***

**Nation/State**

**Percent**

**2000**

**2002**

**2003**

**2004**

## 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.

## 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