L.A.-Long Beach Region Keeps Trade Crown, but Just Barely

By STEPHEN GREGORY

March 3, 1999 12 AM PT

SPECIAL TO THE TIMES

Trade through the Los Angeles-Long Beach customs region fell in 1998 for the first time in 16 years, jeopardizing the district’s position as the nation’s top entry and exit point for international commerce as rival New York eroded L.A.’s supremacy, according to figures released Tuesday by the Commerce Department.

The Los Angeles Customs District, which includes the ports of Long Beach and Los Angeles, Los Angeles International Airport, Port Hueneme and McCarran Airport in Las Vegas, posted a combined $181.5 billion in imports and exports last year, topping the New York Customs District, which took in $180.3 billion, by less than 1%.

But New York’s dollar figures last year grew by more than 5% over 1997, while the numbers for Los Angeles actually fell by more than 2% from $185.9 billion in 1997.

The drop in dollar volume of L.A.-Long Beach traffic was the district’s first since 1982, and economic turmoil in Asia, the region’s largest trading partner, was mostly to blame.

International trade, which accounts for nearly half a million local jobs, is an increasingly critical element of Southern California’s economy, underscoring the importance of the region’s role in the global economy.

Still, 1998 marked the L.A. district’s fourth year in a row at the top spot, which it has occupied since surpassing New York in 1994.

“It’s significant because L.A. is truly a gateway now for the U.S. in terms of penetrating foreign markets,” said Jim Paul, trade manager with the World Trade Center Assn. of Los Angeles and Long Beach.

Local trade officials, however, weren’t always so cocky.

At certain points last year, said Jack Kyser, chief economist at the Los Angeles Economic Development Corp., fears abounded that the Asian crisis would cause Los Angeles to fall behind New York. “We were watching their numbers and actually holding our breath,” he said.

Strong import levels through the ports of Los Angeles and Long Beach, however, helped cement the local district’s lead.

Long Beach, the nation’s busiest port, posted a 16% increase in imports last year over 1997, while Los Angeles logged a 17% jump. Weaker currencies in Asia opened a floodgate of imports to the U.S. last year as foreign manufacturers tried to cash in on the strong U.S. dollar.

But while exports were down at both ports by at least 9% last year--largely due to weak appetites in Asia for more costly U.S. goods--Paul said those figures could actually have been worse if not for a local increase in exports to Latin America, especially Argentina and Chile.

“In the long term, the Asia crisis has been somewhat of a benefit,” Paul said. “It has forced a lot of companies to look elsewhere for new markets and not keep all their eggs in one basket in Asia.”

Both Paul and Kyser expect exports to Asia to improve this year as some battered economies recover.

Still, Kyser predicts that exports this year will actually fall 5% compared with last year unless Japan’s economy improves significantly.

That decrease, however, should be made up by a 7.5% rise in imports, Kyser said.

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Global Gateway

The Los Angeles area continues its reign in 1998 as the leading U.S. entry and exit point for foreign trade, in billions.

Los Angeles: $181.5

New York: $180.3

Detroit: $145.7

San Francisco: $98.4

Laredo, Texas: $84.6

Seattle: $74.8