2010 in Review: Trade Takes a Turn for the Better

In 2010, the trade winds started out soft and breezy but gained some gusto as the year progressed.

A sluggish economy and stalled trade policies at the beginning of the year didn’t help the industry. But after months of incertitude, consumers rediscovered their wallets and returned to the malls to send ships laden with Asian-made goods to Southern California’s ports.

And the Obama administration surprised everyone by putting the finishing touches on the U.S.-Korean Free Trade Agreement, which is expected to be approved soon by Congress and its Korean counterpart.

Here are some trade highlights from this year:

bull; The shipping industry in 2009 suffered one of its slowest years, losing some $15 billion and idling about 10 percent of the nearly 5,000 cargo-container vessels in the global fleet. As demand ramped up in 2010, container lines were slow to pull up anchors in order to increase profits and shipping rates. As a result, shipping times slowed and rates went up to send cargo across the ocean from Asia to California.

bull; The twin ports in Los Angeles and Long Beach, which handle about 43 percent of all ocean cargo arriving in the United States, were the beneficial recipients of the trade upturn this year. The Port of Long Beach is tracking a 25 percent increase in cargo-container activity through November, compared with the same period last year, with 5.74 million 20-foot containers. At the Port of Los Angeles, traffic is up nearly 17 percent this year to 7.2 million 20-foot containers.

bull; China is now providing the United States with 40 percent of all the textiles and apparel imported into this country. Yet China is no longer the cheap and quick place it was to source goods. Wages at Chinese apparel factories have gone up by at least 25 percent this year, and many employees are opting to work in other industries or closer at home. Consequently, a labor shortage is causing apparel orders to be delayed by as much as one month.

bull; A long, drawn-out dispute between Brazil and the United States over U.S. cotton subsidies was partially resolved this year. Brazil was threatening the United States with $830 million in tariffs and other retaliatory measures on U.S. goods because the United States was providing generous subsidies to U.S. cotton farmers. In June, Brazil gave the United States two years to reform its cotton program. Also, the agreement calls for the United States to set up an annual fund of nearly $150 million to provide technical assistance and capacity building for Brazil’s cotton industry.

bull; It was a roller coaster ride this year for the U.S.-Korea Free Trade Agreement. It was an on-again, off-again affair even after President Obama traveled to South Korea in November for a meeting of the Group of 20 nations. Everyone was sure a deal would be struck then, but autos and beef remained the two sticking points in the accord. However, in early December, South Korea budged, loosening up terms for importing U.S.-made automobiles. The Congresses in both countries are expected to vote on the trade accord in early 2011.

bull; At the end of the year, the U.S. House of Representatives voted to renew for 18 months trade benefits set to expire for Andean nations and about 130 other developing countries.—Deborah Belgum