Washington State is the most trade dependent state in America. The per capita exports of $7,408 are the highest in the nation. Washington State's geographical location has a lot to do with it success in trade. The state is at an equal distance from both Europe and Asia. It borders Canada to the north and the Pacific Ocean to the west. Washington's deep-water ports and international airports offer ideal distribution. Washington State is responsible for 7 percent of the nation's exports. An impressive amount, considering Washington has only 2 percent of the nation's population. The exports total for 1999 was $40.2 billion. One out of every three jobs in Washington State is somehow related to international trade. In 1996 there was an estimated $22.8 billion in business investment in Washington State. This includes international investment, new business, and expansion of existing businesses and U.S. business relocation.

CS Question #1: Why is the location of Washington State so significant to its success in international trade?

Transportation goods are at the heart of Washington State's trade. This includes the highly developed aerospace industry located in the state. Transportation equipment accounts for $28.2 billion of export trade. Non-transportation exports account for $12.1 billion. These goods originate from the natural resources of the state. The forestry, fishing and agriculture industries are main producers. Much of the export data considers only durable goods. Software and computer technology services are not always considered as durable goods. It is estimated that Washington States service exports total about $7 billion. Almost half that, about $3.5 billion originates in software exports. Washington State is a diversified economy that, though dominated by transportation equipment manufacturing, includes service industries and natural resources. The top five public companies in Washington State give an illustration of this:

1. The Boeing Company (aircraft manufacturer), $45.8 billion yearly revenue, 237,000 employees
2. Costco Cos. Inc. (membership retail chain), $21.9 billion yearly revenue, 60,000 employees
3. Microsoft Corp. (software), $11.35 billion yearly revenue, 22,276 employees
4. Weyerhaeuser Co. (forest product manufacturer), $11.2 billion yearly revenue, 39,700 employees
5. Washington Mutual Inc. (regional finance), $7.2 billion yearly revenue, 5,410 employees

CS Question #2: Did it surprise you that Boeing and Costco outrank Microsoft in terms of revenue and employees in Washington State? Why do you think this is? Their web sites are linked at the top of this sheet for more information. (Hint: consider the following factors: competition, consumer needs, government contracts and how much each company's activities are specifically concentrated in Washington State.)

Europe is Washington State's biggest export market, accounting for $14.6 billion. Asia is the second largest export market, accounting for $14.5 billion. The largest single nation export market is $5.9 billion in Japan. Latin America $4.4 billion, Canada $4.4 billion, the Middle East $4.3 billion and the Pacific $1.2 billion were all large export markets. Washington State and its businesses are involved with many trade organizations. The international trade business community of Washington State is extensively influenced by and/or participates in the following:

• Asia Pacific Economic Cooperation (APEC) forum promotes open trade and economic interaction among nations on the Pacific Rim. The Pacific Rim includes all nations and island nations bordering or in the Pacific Ocean. Most economically significant among these nations are: Japan, Taiwan, Singapore, Hong Kong and South Korea and the West Coast of the United States. The location along the pacific makes these nations ideal trading partners. Washington State is located in the Pacific Rim and APEC is a very valuable resource to the state.
• North American Free Trade Agreement (NAFTA) is a signed trade agreement between the United States, Canada and Mexico. Its purpose is to gradually eliminate tariffs and trade barriers on goods and services passing between the borders of these nations. Washington State is dependent on Canada as an important export market. Further, while direct trade with Mexico is not as significant, Washington State does rely somewhat on Mexico's access to Latin America.
• European Union (EU) is an organization of 15 Western European nations. Its objectives are to eliminate trade barriers among its members and to adopt the use of a single currency. The 15 EU members are Germany, France, the United Kingdom, Ireland, Spain, Portugal, Italy, Greece, Luxembourg, Austria, Belgium, the Netherlands, Denmark, Sweden and Finland. Because Washington's highest export market is Europe; the EU is a significant resource.

CS Question #3: Is it necessary for Washington State to be involved in international trade organizations? Why or why not?

Washington State has an international trade division. This division has many programs to support venture partnership, market research, communication among nations and international trade. Among these programs are:

• The European Program focuses on the aerospace, high technology and software industries. A field office in Paris promotes Washington State business and makes valuable contacts.
• The Japan Program works with the Japan External Trade Organization (JETRO) to assist Washington State businesses wishing to enter the Japanese market. Focus is on direct investments and partnerships.
• The Korea Program focuses on gaining export opportunities in Korea for Washington State businesses. The program aims to assist, promote and help coordinate export possibilities.
• The Southeast Asia Program reaches out to China, Hong Kong and Taiwan for the purpose of market development. The program is a resource for access, regulation, distribution and pricing for Washington State business desiring to export to Southeast Asia.

Washington State places high importance on sustaining and growing their international trade based economy. This commitment is clearly shown by the forethought and aggressiveness of these programs.

CS Question #4: Do you think these programs would be beneficial to a Washington State business that is beginning to engage in international trade? Why or why not?

Further Thought:

1. Make a recommendation to Washington State's international trade division for a new program to support growth in international trade.
2. Do you think Washington State should work on further diversifying its industries? Why or why not?
3. Explain how Washington State would be affected by a trade embargo with Japan.