Trade: exports contribute greatly to economy: the Pacific Rim, especially Asian markets, is the primary destination for Alaska's export shipments.

• Author: Wolf, Greg
• Position: Large domestic markets for manufacturing, high-tech, agricultural sectors

Alaska is one of the most trade-oriented states in America. While many states enjoy sizable domestic markets for their manufacturing, high-tech or agricultural industries, Alaska is dependent on the export of its natural resources to overseas customers for much of its economic well-being.

The Pacific Rim, especially Asian markets, is the primary destination for Alaska's export shipments. Japan, Alaska's long standing No. 1 trading partner, and Korea, for many years the state's second-largest market, together accounted for more than 60 percent of Alaska's $2.5 billion worldwide exports in 2002. Canada and China ranked third and fourth, respectively.

A few examples highlight the importance of the Asian markets: the only natural gas leaving Alaska is the LNG exports to Japan, the only coal that has ever been commercially exported from Alaska has been the Usibelli Coal Mine shipments to Korea, and the lion's share of the seafood, fertilizer and forest products sales from Alaska is to Asian customers.

There are several reasons for the strong concentration of exports to Asia. First, many Asian nations are resource poor, while Alaska is resource rich. In other words, we have what they need. Second, Alaska offers relative geographic proximity versus alternative supply sources. Alaska is a neighbor on the Pacific Rim and there are convenient shipping routes by surface and air. Finally, and often overlooked, as part of the United States, Alaska offers political stability, a comfort for countries that rely heavily on imports to meet their energy and food requirements.

This year, so far, Alaska's exports are on the upswing. For the first six months of 2003, the state's worldwide exports increased 13 percent over the same period last year. A continuing recovery of Asian markets since the 1997-98 financial crisis, strong economic growth in Korea (5 percent to 6 percent gross domestic product growth) and China (7 percent to 8 percent GDP growth), as well as a general rise in commodity values, are among the factors leading to this increase. Seafood continues to be the state's top export commodity, followed by energy products (LNG, refined fuels), fertilizers and forest products. Other significant exports include precious metals (primarily gold) and minerals (mainly zinc and lead). For the full year ending December 2003, we project that Alaska's worldwide exports will grow to $2.6 billion.

Japan, Korea and Canada have been mainstay markets for Alaska's...