Link to Owner Dr. Robert B. Pamplin Jr.



Southeast Asia markets are becoming increasingly important; increase included strong growth in China and Canada despite trade tensions with those countries.

PHOTOS COURTESY: PORT OF PORTLAND - Cathay Pacific Airways in 2016 launched cargo service at Portland International Airport to meet growing trade demand for commodities from the Pacific Northwest and the United States to various parts of Asia.

A pair of recent economic reports show that Oregon's export market continues to hit record highs even amid an uncertain climate of "protectionist policies" such as tariffs, trade quotas and other restrictions.

The Port of Portland reported in April that, despite the uncertain trade environment, Oregon saw a 1.8% increase in exports in 2018 compared with 2017. The state exported $22.3 billion in goods last year, and the increase included strong growth in China and Canada despite trade tensions with those countries.

"Oregon's record trade numbers reflect our state's diverse manufacturing base, and the lasting partnerships we've built across the Pacific Rim," Chris Harder, director of Business Oregon, said in a statement. "We're particularly pleased to see the growth not limited to one industry or destination country, but spread throughout, increasing revenue for exporters across the state of Oregon."

China received $4.7 billion in Oregon exports, a 20% jump from the previous year. Only about one-third of Oregon exports to China are subject to a proposed or enacted tariff increase, with electrical and industrial machinery — items not subject to tariffs — seeing some of the largest gains in trade.

Exports to Canada, which totaled $3.2 billion in 2018, saw more than 35% growth from 2017, rebounding in the past 18 months due to heavy manufacturing exports. Machinery, transportation equipment and metals have historically accounted for half of all exports to Canada, a good sign for the state as transportation equipment exports experienced a 69% increase last year, the Port of Portland stated.

"It's great news for Oregon's economy that exports continue to grow," said Josh Lehner, senior economist with the Oregon Office of Economic Analysis. "Last year's gains are especially welcoming given the current global environment where the strong U.S. dollar, slower international growth and increased trade tensions all work against U.S. exports."

COURTESY: PORT OF PORTLAND - Cathay Pacific Airways provides shippers with greater choice and flexibility when connecting to Cathay Pacific's international cargo network through its Hong Kong hub.

The Port of Portland noted that Oregon exports remained stable in 2018 in part because of the strong relationships the state and its partners have built with countries over the years.

"In a trade-dependent state like ours, we rely on strong trading partnerships to help Oregon farmers feed the world and local businesses continue to grow," said Curtis Robinhold, the port's executive director. "With small or medium-sized businesses making up nearly 90% of all exporters in Oregon, it is promising to see trade activity expand, contributing to a more equitable and prosperous region for all."

Oregon's agricultural exports grew by nearly 4% in 2018. Japan's exports represented a 20% jump last year, with most of the growth coming from agriculture and aerospace products and parts. Japan is Oregon's largest food and agricultural export market, followed by Korea, Canada and China.

"Food and agricultural exports remain critical in supporting communities across the state," Alexis Taylor, director of the Oregon Department of Agriculture, said about the $98 billion economic impact. "We will continue to prioritize these vital trade relationships and pursue new international markets. Our industry and economy depend on it."

The Port of Portland pointed out that Oregon's exports include sending commercial trucks to Australia, and that it ships goods through its four marine terminals, and through an air international cargo partnership with Cathay Pacific.

The "2019 Value of Jobs Oregon's State of Trade" report produced by the Portland Business Alliance, Pacific Northwest International Trade Association and the Value of Jobs coalition showed that Oregon produced and exported $28 billion in goods and services in 2017.

With research conducted by ECONorthwest, the report noted that international trade supports 505,700 jobs, or one in five, with the average annual wage at $58,730. That's 11% higher than the state average. Exports directly support 103,540 jobs in Oregon and the highest share are in Washington County, where more than 41,000 employees represent 11% of the workforce. In total, exports make up 12% of Oregon's gross domestic product.

Oregon exports more goods than it imports, making it one of just 12 states that have a trade surplus. Much of the growth is driven by the state's high-tech, manufacturing and agricultural sectors. Other exports manufactured here include knives, recreational vehicles, industrial machinery and commercial transportation equipment.

The report highlighted that Oregon exports 80% of its agricultural products, which include blueberries, cherries, hazelnuts, wheat, potatoes, Tillamook cheese, grasses and hay, outside the state and 40% internationally. Agriculture is the state's fastest growing industry by value and is driven by expanding demand for Oregon products in Asia and Canada.

State successfully courting foreign markets

Another 26% of Oregon exports, or $7.6 billion, were in services such as intellectual property licenses and consulting services such as financial, engineering and marketing services provided by Oregon firms abroad. This also involved management services for companies that have global operations.

Information and technologies royalties made up 9% of the total export value in 2017. The largest subsector in this category includes computer and electronic royalties, which were primarily licenses and intellectual property, accounting for 5.9% of export value and involving companies such as Puppet and Urban Airship. Educational and medical services add to the state's export value, primarily because of foreign students studying at Oregon universities and paying out-of-state tuition.

Oregon trades with nearly 150 countries and its top trading partners include China, Canada, Japan, South Korea, Vietnam and Malaysia. Since 2010, the value of goods exported from Oregon has increased for nine out of 10 of its top trading partners. Due in part to its geographic location, Oregon has developed such deep commercial ties with Asian markets, particularly around the high-tech industry, that the only time in recent decades that Oregon has grown slower than the U.S. was after the Asian financial crisis in the late 1990s, according to the Oregon Office of Economic Analysis.

Vietnam, the report pointed out, is an increasingly important market for Oregon exports and to its commercial supply chains. Columbia Sportswear, Nike and Intel all have significant investments in Vietnam, and Oregon has developed stronger academic and cultural ties through the Vietnam-Oregon Initiative. Vietnam's growing middle class also is fueling demand for consumer goods such as cereals, fruit and vegetables, and athletic wear, another factor in Oregon's exports to Vietnam increasing by 432% since 2010.

The report cautioned that the threat of "protectionist policies" such as tariffs, trade quotes and other restrictions could negatively impact Oregon's trade sector by causing the loss of market access for products, forcing some companies to lay off workers or close entirely. Small companies serving supply-chain, trade logistics and transportation needs could lose business. In addition, Oregon consumers would have fewer choices, causing prices to rise and impacting the affordability of basic goods.

Melody Finnemore is a contract writer who regularly contributes to the Business Tribune. She can be reached at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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