International trade now accounts for 40 percent of all jobs in Washington and is the largest single driver of the state’s economy, according to a report to be released Tuesday morning.
As an Asian gateway to the United States, Washington state has been cashing in big-time on its close ties to China, which now ranks as the state’s top trading partner, followed by Canada, Japan and South Korea.
Exports to China have increased a whopping 230 percent since 2004, while imports flowing through the state’s ports on their way to other U.S. destinations have resulted in thousands of new jobs, according to a report by two pro-trade groups, the Washington Council on International Trade and the Trade Development Alliance of Greater Seattle.
And the report said the state is getting the benefit of only “the tip of the iceberg” when it comes to trading with China, given its huge size and market.
“At the end of the day, we are inextricably linked right now to China, in a wide variety of ways,” said Eric Schinfeld, president of the Washington Council on International Trade. “If there are going to be imports, we would like as many of them as possible. We want that global supply train to come through Washington state as much as possible.”
Overall, the report said, 1.1 million of the state’s 2.8 million jobs are now trade-related, one of the highest rates in the nation. And it said that trade is creating jobs across nearly every sector of the economy, from aerospace and agriculture to technology and tourism.
According to the report, Washington state exports in 2011 hit $64 billion, twice as much as the average state. Led by transportation, computer and farm exports, the amount of merchandise and commodities sold to foreign countries has doubled in the past 15 years, the report said.
“It’s producing a lot of jobs in a difficult economy, and it has the opportunity to grow them even more,” said Sam Kaplan, president of the Trade Development Alliance of Greater Seattle. He said the public may be surprised to learn how many jobs in the state are tied to trade but added that it’s a conservative estimate: “We tried to be careful in what we counted. But for those of us in the international game, it’s not that surprising.”
Schinfeld said the state has been lucky to have big-name global companies make Washington state their home, including Boeing, Microsoft, Amazon, Starbucks and Costco. And, he said, the state has a big advantage in trade with its close proximity to both Asia and Canada.
But the report said the state is failing to get its message out to a broader audience.
“While many individual companies have well-known global brands, from Starbucks to Boeing, the world still does not know much about Washington state,” the report said. Calling the state “an excellent platform from which to operate globally,” the report said: “We must market that excellence.”
The report called it “remarkable” that Washington state has achieved such a large percentage of jobs tied to international trade -- 40 percent -- without a coordinated effort.
“That is a number that we’ve reached mostly by happenstance,” Schinfeld said. “It’s also a promise of what could be. … If we actually were trying, it could be 50 or 60 percent, if we actually were coordinated.”
To create tens of thousands of additional jobs and boost the state’s fortunes even more, the report recommended adopting a new “international competitive strategy” in response to growing threats that it said ultimately could limit the state’s ability to benefit from trade.
Among them: declining public support for international trade, the possible diversion of more trade traffic from the West Coast due to the widening of the Panama Canal, and Washington’s No. 38 ranking among states in graduating students with degrees in science, technology, engineering and math.
The report suggested that the state begin a trade communications campaign to publicize the benefits of trade to the public and conducting yearly “international orientations” for lawmakers and political candidates. It called for creating “a more positive environment for trade” to avoid the risk of having the public vote against elected officials who back pro-trade positions.
“While the stories of those who have lost out from trade have been amply told, we have not put a public face on those who have benefitted from trade,” the report said. “The winners’ stories are too often forgotten, and their compelling stories left on the cutting-room floor.”
While the report recommended no specific level of spending, Schinfeld said it will also be important for the state to spend to keep its transportation system up to date and attractive to shippers.
And he said that while the state does a good job of attracting the best and brightest students from around the world – most of them coming from China, South Korea, Vietnam, and Hong Kong ---- it won’t work as a long-time strategy and that the state must do more to educate its local workforce. Currently, more than 13 percent of the state’s population is foreign-born, the report said.
“They want to come here because there are great jobs here, with places like Microsoft and Amazon and Boeing, and they want to come here because this is beautiful amazing place to live, but we can’t rely on that,” Schinfeld said.
In 2010, the report, said, Washington state recorded a 32 percent increase in international visitors, the highest increase in the nation, compared to a U.S. growth rate of 11 percent. But the report said that due to recent budget cuts, Washington is now the only state that does not fund tourist promotion. It recommended that state lawmakers start spending again to lure more foreign tourists.