Foreign Trade Issues in California’s Economic Growth

The main objective of this research paper is to investigate how significant the global trade factor is in the overall growth of the California’s state economy. The paper seeks to outline how trade impacts on the employment levels and how its variance may shift employment and output rates among a state’s industrial sector. In addition to this, the research also looks into the options that the local firms and policy makers have in the face of very competitive global markets and how trade affects their occupational segmentation and the statistical distribution of their wages and employment modalities.

Other specific objectives of this study are:

  • To investigate whether trade flows and fluctuations affect a state’s decisions on production processes and locations.
  • To investigates on the effects of foreign trade on the growth if the general inequality in relative wages and the demand for alternative types of labor.
  • To find out how the state government can assist in the revival of foreign trade and what options policy makers may indulge in for the general good of California’s economy.

Literature Review

The increment of California’s exports in the near past is closely attributed to the economic expansion of a few countries namely China, Canada, and Mexico which is California’s main export beneficiary accounting for about a half of the state’s exports. Trade agreements like the NAFTA and the GATT (General Agreement on Tariffs and Trade) have continued to boost both the export prospects for California’s producers and the overall import competition opportunities. (Kroll 13)The Proposed Asia-Pacific Economic Cooperation Forum (APEC) also envisions a further increase in foreign trade between California and its main trade partners. As a result of the recent decline in aggregate trade (mainly exports) from California, there is an emergence of an impressing transition in the entire trade industry. (Shatz 197) Some particular industrial sectors are clearly feeling the impact as they have began experiencing serious job displacements as a result of trade decline, while other fields go through significant shifts in their labor force mix. (Kroll 19)

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