Trade Response to Global Downturns

1
Trade Responseto Global Downturns

• Marney Cox
• Chief Economist
• SANDAG
• March 2010

2
US Trade Growth Outpacing GDP(Cumulative Growth
Rate 1992-2008 current )
3
Global Recessions Impact on Trade(findings from
World Bank Report, August 2009)

• Elasticity of Trade Value to GDP is near 4.0
• Trade values fall more than volumes
• Mean recovery time to previous peak 4 years
• Impacts vary across industries
• Least severe consumer productsfood and
  beverages
• Most severe durable commoditiesiron and steel
• Following crisis deficit or surplus conditions
  return

4
US GDP-Measuring the Decline(Index Q-O-Q Change
from start of recession)
Start of Recession
Quarters
5
US Real Exports-Measuring the Impact(Index Q-O-Q
Change from start of recession)
Start of Recession
Quarters
6
US Real Imports-Measuring the Impact(Index Q-O-Q
Change from start of recession)
Start of Recession
Quarters
7
Whats Ahead?
8
US Continues to Shed Jobs (Index M-O-M Change
from start of recession)
Start of Recession
Months
9
US Household Credit Debt Outstanding(Billions )
10
US Savings Rate Rising(Monthly, SAAR)
11
Shape of Recovery Role of Trade

• V, U, WNike swooshgradual slow
• Orthodox viewtrade recovery is slow
• Value of trade falls more than volume
• Commodity and asset prices under pressure
• Majority of trade is intermediate goods
• Falling prices can increase trade volume

12
SD Economic Opportunity is Knocking at
Californias Southern Door

• Mexico is CA largest export market
• Otay Mesa is CA/MX busiest trade border crossing
• 1.5 million trucks per year 36B in trade
• 95 of regional freight movement is carried by
  truck

13
SD Value of Trade Has Nearly Tripled
(San Diego Customs District, Millions)
14
SD Trade Growth Outpacing GRP(Cumulative Growth
Rate 1992-2008 current )
15
SD Otay Mesa Commercial POECurrent Congested
Conditions

4.36 million working hours of delay annually
16
SD Border Delays Reduce Tradeand (Delay range
autos 45 min.-2hrs. Trucks 2hrs.-6hrs.)
16,000
12,000
Output (in millions)
8,000
13,793
9,382
4,000
0
Exports to Mexico
Imports from Mexico
17
Economic Growth (Border Delay Annual Impact to
United States Mexico)
8.63 Billion in OUTPUT LOST
23 Super Bowls
73,900 JOBS LOST
4½ Google Companies
18
SD SR11 Project Study Area
19
SD SR11 Project Progress

• Toll Legislation Approved SB 1486 (Ducheny)
• U.S. Presidential Permit Approved
• Exchange of Diplomatic Notes with Mexico
• Tier I Program EIS/EIR Approved
• Scoping Document Project Study Report
• Transportation Border Congestion Relief Program
  (TBCRP) Designation

20
SD SR11 Estimated Project Budget 615-715
Million
Programmed Funding Available State (STIP) Tier
II Env./Eng. 13.0 M Federal (SAFETEA-LU) Tier
II Env./Eng. .8 M State (Prop. 1B
TCIF) Construction 75.0 M Total 88.8 M
Remaining Funds Needed(Toll Funds/Other)
526.2 - 626.2 M
21
SD SR11 Project Schedule
Develop Financial Strategy 2009 Tier II
Environmental Doc. 2010 Design/Right of
Way 2011 Begin Construction 2012-13 Open New
Trade Gateway 2014-15
22
Trade Responseto Global Downturns

• Marney Cox
• Chief Economist
• SANDAG
• March 2010