Alaska is one of America's most trade-oriented states. While many states have significant domestic markets for their manufactured goods, technologies and agricultural products, Alaska is heavily dependent on overseas markets for its natural resource and service sector exports.
At just more than $3.1 billion in total exports last year, in absolute terms, Alaska's ranks 41st among the states. On a per-capita basis, however, Alaska ranks fourth, and if you consider exports as a percentage of gross state product (the sum of all goods and services produced in a state in a given year), Alaska ranks eighth. Clearly, Alaska's export industries play a vital role in the state's economy and are very important to the state's overall economic well-being.
From a trade and business perspective, what happens in Asia matters greatly to Alaska and the rest of the United States, especially the West Coast states. In 2004, approximately 25 percent of America's total merchandise exports went to Asia-Pacific countries. For West Coast states, however, the concentration of exports to Asia-Pacific was much higher, ranging from 30 percent for California, 40 percent for Washington, and up to 65 percent in the case of Alaska.
These numbers highlight the importance of Asia-Pacific trade to these states, including the jobs, revenues and investments that accompany these business ties. It also highlights the fact that the Alaskan and U.S. economy are very much integrated and linked with those of the Asia-Pacific nations and that we are a significant economic participant in the region. As one analyst recently noted, "Sometimes forgotten is that the United States has a coastline nearly as long as China's and that the U.S. is just as much a Pacific nation as Japan, China and South Korea."
Last month, Alaskans were afforded an important opportunity to express their views and provide information on trade opportunities and challenges between Alaska and countries in the Asia-Pacific region. The venue was a special field hearing, held in Anchorage, by a subcommittee of the Senate Foreign Relations Committee. U.S. Sen. Lisa Murkowski, who chairs the Subcommittee on East Asian and Pacific Affairs, conducted the hearing.
A mix of private and public sector executives presented testimony. While describing some of the challenges they face, the witnesses spoke mainly of the opportunities that this fast-growing region of the world offers, most especially with China, the world's largest emerging market. For Alaska, China's rapid rise to economic prominence has led to a sharp increase in exports to that country. Since 2001, Alaskan exports have grown by more than 100 percent and the trend is continuing.
During the hearing, it was noted that Alaska is a resource exporting state. In 2004, the state's major export commodity was seafood, followed by minerals, energy, forest products and precious metals. Indeed, Alaska's economy and its exports are driven by the development of its natural resources. One of our strengths as a resource exporter is that what we sell to the world are not discretionary products like designer watches or the latest electronic gadget. Rather, what we sell are the essential "building blocks" necessary for economic growth and modernization: wood to build homes; energy for power plants that keep the lights on; and seafood to provide sustenance. Growing and industrializing economies, like those found in Asia-Pacific, create valuable markets for the state's exports.
While stressing the importance of the state's major trading partners, such as Japan, Korea and Canada, Murkowski also indicated the need for Alaska to look further into the region for new trade opportunities. She suggested that we consider markets in Southeast Asia as potential new customers for the state's exports. As a step in this direction, World Trade Center Alaska will be leading a trade mission to Singapore and India next spring with an eye on identifying opportunities and to make contacts.
Murkowski is to be commended for bringing this hearing to Anchorage. By doing so, she focused attention on America's economic relations with Asia and enabled Alaskans to be heard on a topic that means so much to our own economic well-being and future.
Greg Wolf is the executive director of the World Trade Center Alaska. He can be reached at (907) 278-7234 or by e-mail at greg@wtcak.org.
