The Bay Area has an opportunity to shape California's physical and economic landscape for decades to come. A report published this month by Jon D. Haveman and David Hummels called "California's Global Gateways: Trends and Issues'' outlines this opportunity. Haveman and Hummels are with the nonprofit Public Policy Institute of California which was co-founded in 1994 by the late William Hewlett, co-founder of Hewlett-Packard Co. The Institute is dedicated to improving public policy in California through independent, objective, non-partisan research on major economic, social, and political issues.

The Institute's study emphasizes California's need to leverage the current service we offer which subsidizes economic activity in other states. Haveman and Hummels clearly express our need to decrease the congestion on rail lines that link the ports of Los Angeles and Long Beach with America's interior and jammed Bay Area highways which slow down truckers near the Port of Oakland. If we do, shippers will not have to look for other U.S. gateways.

San Francisco Chronicle's, David Armstrong writes:

...California's international trade could soar to three times its current level by 2020, but only if the state's congested seaports, airports, highways and railroad lines are significantly expanded and upgraded, concludes a report released today by a San Francisco think tank...

Whatever steps the state takes will matter because its international trade, which hit $92.2 billion in exports in 2002 according to state government statistics, is key to its economy. Indeed, California, along with New York, Texas, Washington and Michigan, is one of the nation's most active trading states, and its transportation infrastructure reflects its status.

California has three of the nation's seven largest container ports -- Los Angeles, Long Beach and Oakland -- and two of the three busiest air cargo airports: Los Angeles International Airport and San Francisco International Airport.

Thanks to its location on the Pacific Rim, California is well positioned to handle this country's burgeoning trade with Asia, which surged from just 8 percent of U.S. trade in 1970 to 40 percent in 2002. Moreover, "Trade with Asia is expected to provide almost three-fourths of the trade growth through California,'' Haveman and Hummels predict.

The Golden State ships agricultural goods, computers and machinery to Asia, especially the fast-growing markets in China, and brings in apparel, electronic gear, shoes, toys and other goods, much of it destined for other parts of the United States. For a decade, California, which also trades actively with Mexico and Canada, has been the nation's top exporting state or very close to it.

About The Authors

Dr. Jon D. Haveman is an International Economic Development and Trade Policy Expert and Research Fellow with The Public Policy Institute of California. Haveman is currently researching regional trading arrangements and the influence of international trade on domestic labor markets. His other areas of expertise include applied econometrics and the distribution of income and poverty. Haveman is in the process of putting together an ftp site that will contain data that are commonly used by researchers in studies of empirical international trade. In addition, Professor Haveman teaches international trade and labor economics at Purdue University. He has taught several courses at both the undergraduate and graduate level in each subject.

Dr. David Hummels is an Associate Professor of Economics at Purdue University's Krannert School of Management in West Lafayette, Indiana. He is also a Faculty Research Fellow of the National Bureau of Economic Research. Hummels has worked as a consultant to the International Monetary Fund, the World Bank, the Inter-American Development Bank, and the Public Policy Institute of California. Previously he has been an Assistant Professor of Economics at the University of Chicago’s Graduate School of Business and a Visiting Scholar at the International Monetary Fund and the Federal Reserve Bank of Minneapolis.

Hummels’ research focuses on empirical investigations in international trade, with a special focus on models of product differentiation in trade and the effects of transportation and infrastructure on trade and economic development. His most recent work focuses on the effect of disruptions to international commerce, such as those caused by the 9/11 attacks, and the west coast port lockout.

Hummels received his Ph.D. in Economics from the University of Michigan in 1995.

For the full text of Armstrong's story, go to: SFGate.com.

For the full text of the Report, go to: PPIC.org

A hard copy of the report costs $12. Or you can download a PDF of the report for free.

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