10 Jul 2012
- Written by Bob Gelfand
LANCC REPORT-The Los Angeles Neighborhood Council Coalition (LANCC) met on Saturday and took up the weighty question that has plagued the Mayor and the City Council for the past 4 years. Can we create jobs and business growth in the region? If so, how?
As described previously in CityWatch, we chose to consider the subject of international trade as a potential incubator of new jobs. The approach we took was to invite an expert from the Port of Los Angeles and a representative from one of our fastest growing trading partners, the Republic of Korea.
The South Korean government was represented by one of our neighborhood council board presidents, Derek Waleko, who also works for the local office of the Korean governmental agency known as Kotra. Kotra promotes exports to the US and other countries.
The Port of LA was represented by Jim MacLellan, who led off with a discussion of just how large the trade sector is, not only locally but for the American economy as a whole. The numbers are staggering. The throughput of the ports of Los Angeles and Long Beach plus the Los Angeles Airport result in combined imports and exports that total approximately one-third of a trillion dollars per year.
Not only that, but imports and exports are projected to grow over the next several years, with a resulting net increase in local income that will sum to several billions of dollars.
The projected growth is at least partly due to one big change. The United States and Korea have just initiated a free trade agreement that will substantially reduce Korean tariffs on American products including agricultural items.
It should be noted that agricultural products have traditionally been a sticking point in most trade negotiations, not only with the Far East, but with Europe as well. Farming and politics are intertwined pretty much everywhere.
But somehow, the current administration and the Koreans have settled on a pact that will reduce tariffs to nearly zero within the next 3 years, and have already reduced them partially as of today.
Let's run that statement by one more time -- the FTA between the US and Korea went into effect on March 25, 2012. It's remarkable how little play this got in either the local or national press, but it's a big deal, as our Vice President would put it.
Now, the sale of American beef to Korean consumers is a growth sector. Traditional California products such as citrus are exportable.
Here's how the Los Angeles economy can take advantage, according to MacLellan. The reduction in Korean tariffs will open opportunities for local businesses who are able to get into the export trade. There are some technical details that you have to understand to be a successful exporter. There are rules and there are documents.
The port has therefore created a short course in how to get into the export market. MacLellan and his colleagues will train you if you are willing to invest 3 hours of your time. In fact, there is a training program that you can take without charge on August 23 at the Harbor BusinessSource at 455 West 6th Street, San Pedro.
The port is also inviting neighborhood councils to host one of these training programs. Whether you are in the valley or on the coast, you can get this program brought to your end of town.
The other side of the trade equation involves imports. Kotra, as a representative of the Korean government, is designed to promote their exports, which therefore become our imports. We asked their representative the following question: If imports are projected to increase, how can our local economy benefit in the form of local business expansion and jobs for Los Angeles residents?
Part of the answer involves the goods movement industry, including dockworkers, truckers, warehousing, and railroads. It also involves the importers who buy products from overseas and sell them at Target, Walmart, and thousands of other stores. As imports increase, all of these sectors benefit. Jobs will increase in that sector.
We asked how the remainder of our local economy can get into the act. We in San Pedro know full well that the unionized longshore industry and the warehousing businesses will do well. It's the rest of us that we were asking about.
The answer on the import side of the equation is not nearly so simple. There is business to be carried out and there will be new jobs created, but we will have to develop our skills and learn the proper ways of doing things.
One of our audience participants was Jennifer Frank, who runs her own business known as Mentors International. As she explained to me, just the security requirements alone will result in numerous additional jobs.
That's because in the post-911 world, everything that comes into the United States is subject to documentation requirements, possible inspections, and various kinds of rules.
That means that shipping companies and warehouses on both sides of the Pacific have to live up to new standards and this will mean new hires all along the transportation routes.
I asked the final, and ultimately more complicated question, using the idea of green growth as an example.
We know that South Korean manufacturers in Gwangju are ramping up their production of solar panels with the intent of selling them to us. How can we ensure that members of the laborers union and local construction firms can get a piece of this action as Los Angeles factories and homes become solar?
Is there some neat formula that we can pull out that will predict future prosperity based on a new trading partner relationship?
Importantly, are there products we can make here and export to the other side of the Pacific so that we can be a more equal partner in this growing industry? That is a big part of the puzzle.
There doesn't seem to be a simple answer to this question, but there were some intriguing thoughts percolating through our heads as we tried and will continue to try to solve this puzzle.
Tags: LANCC, LA Neighborhood Council Coalition, jobs, International Trade, Port of LA, Koreatown, South Korea
Vol 10 Issue 55
Pub: July 10, 2012