Newspaper article The Christian Science Monitor

After GATT, Business in California Is Sifting the Agreement for Details State's Traders Hope to Boost Current $104-Billion Export Tally

Newspaper article The Christian Science Monitor

After GATT, Business in California Is Sifting the Agreement for Details State's Traders Hope to Boost Current $104-Billion Export Tally

Article excerpt

CALIFORNIA almond growers envision more of their nuts showing up in German candy bars and Japanese cereal. San Francisco-based Levi Strauss & Co. sees more Europeans and Asians clad in denim.

But Bernard Lax, head of a Los Angeles apparel firm, worries about cheap sportswear coming into this country from the Far East.

A week after approval of the largest trading pact in world history, the impact of the agreement is just beginning to sink in among companies and consumers alike.

Everyone from pear growers in the Central Valley to chip makers in Silicon Valley have been going over the treaty's fine print.

The results are prompting some firms to rub their hands in anticipation of developing new markets overseas while others fret about competition from low-wage countries.

The impact of the 117-nation accord will be acutely felt in California. As the country's largest trading state, California offers a window on what the General Agreement on Tariffs and Trade (GATT) will mean.

Overall, the state is expected to benefit from the accord that lowers tariffs, quotas, and other trade impediments over the next 15 years. But there are some losers, and those that do stand to gain will not experience a boom overnight.

"California has a lot of industries that will benefit," says Joseph Wahed, chief economist for Wells Fargo Bank. "But it will come slowly."

Much of the optimism here surrounds the state's status as a trading colossus. Last year California exported $69 billion in goods - 15.4 percent of the United States total - and more than $35 billion in services. Even in the midst of a job-robbing recession, foreign trade has been one of the few bright spots in the state's economy. It has accounted for more than half California's total economic growth in recent years.

State economists variously estimate that the accord will generate 100,000 to 400,000 new jobs in the state over the next 15 years.

"The upshot is it's positive," says Lee Grissom, a state planner. "But there are still critical components of the California economy oriented toward the future" that do not receive a boost early on or were left out altogether.

The state's service sector, one of the world's most developed, should reap gains. This includes accounting, legal, and counseling services.

The outlook for another big area - financial services - is less buoyant. US negotiators dropped a proposal to open international financial markets and let US banks, stockbrokers, and other institutions go after foreign consumers. …

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